Business principles to live by: What transformative leaders do in hard times
During my 30-year career in strategy and operational finance, I’ve seen some of the most interesting companies through some of the most interesting times. My experience at Amazon, Electronic Arts, NBC, Delta Airlines, and now LiveRamp provides some perspective on the fundamentals we can rely on to stay constant at this unprecedented moment in human history.
What transformative leaders do in hard times
What did the leadership at these corporations—representing a few of the most notable, transformative business successes of the digital age—all have in common? Whether it was riding the wave of e-commerce or defining digital transformation, our executives knew that enabling innovation and change required a steadfast commitment to a few immutable financial rules that would serve them in good economic times and bad.
Always plan for the worst. Never get caught on the back foot underestimating the scope of a potential downturn. Businesses can always add budget back but putting the organization through an unexpected rebudgeting cycle is not an ideal use of time and resources when both need to be strategically applied.
Never stop investing. Business leaders should never hold back on making investments that drive long-term growth. In fact, difficult circumstances can force bets in areas based on intuition and backed by data.
In early 2005, Amazon launched Amazon Prime amid scrutiny after a tough holiday season. After reviewing shopping behavior data, the leadership knew customers preferred the convenience of fast shipping and wanted a simpler approach to selecting delivery options. They developed Prime to match and exceed those expectations. The new value proposition drove significant demand, and ultimately ensured Amazon’s dominance in the category.
Downturns can also be the right moment to invest in partnership building. Say a large retailer with deep customer insights has a plan to safely and easily share SKU transaction-level data with CPG partners. This means they can produce goods more efficiently to adequately respond to returning growth in consumer demand.
Today many are predicting high post-pandemic demand for travel. Airlines and travel providers can start to look ahead, developing insights into which routes will take off first and, with these early signals, work with hotel chains and car rental partners to better prepare. More and more companies are leveraging a “safe haven” that enables secure, permission-enabled data sharing, so you can safely collaborate with one or multiple partners to extract valuable insights.
Stay focused on the things that matter. Long before the “Mad Men” era, advertisers believed in the power of marketing and advertising, but struggled to understand how much of it was effective. With the role of technology and recent advancements in addressable channels, including mobile, search, and even TV, ad spend can be fine-tuned for performance with amazing granularity.
During a recession, it’s especially important to optimize the impact of every marketing and advertising dollar. Marketers should be asking themselves if their investments are addressable, accountable, and measurable. Those who negotiate based on business outcomes rather than traditional reach and awareness metrics can ensure media dollars are working harder than ever before. Machine learning and artificial intelligence can help analyze and translate insights into faster signals, leading to much less waste.
Lastly, start with the end in mind. Ask yourself, “when we get to the end of this, what do I want my employees and investors to say about our company, how we acted, and what we stood for during hard times? How did we take advantage of insights and technology to protect our business and accelerate our recovery?”
Most importantly, what would your customers say about you? As Jeff Bezos said, “I want [Prime] to draw a moat around our best customers. We’re not going to take our best customers for granted.” The most immutable principle, whether in times of tumult or not, is that deepening those critical customer relationships is the ultimate key to long-term ROI.
Even when facing the most challenging of economic periods, these fundamental business principles can keep businesses steady and moving forward.
Warren Jenson, President & CFO, LiveRamp
Tel: (866) 352-3267
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LiveRamp is the data collaboration platform of choice for the world’s most innovative companies. A groundbreaking leader in consumer privacy, data ethics, and foundational identity, LiveRamp is setting the new standard for building a connected customer view with unmatched clarity and context while protecting precious brand and consumer trust.
LiveRamp offers complete flexibility to collaborate wherever data lives to support the widest range of data collaboration use cases—within organisations, between brands, and across its premier global network of top-quality partners.