The current crisis doesn’t look like anything that’s happened before.
But there are still lessons to be learned from the past. While “time has dulled the pain,” Bryan Wiener, former CEO of 360i and Comscore remembers the 2008 financial crisis well. It was an “incredibly scary time,” Wiener said on the first edition of the Digiday+ Talks series, where industry leaders share how businesses can adapt to the new reality.
During the wide-ranging talk, held virtually exclusively for Digiday+ members, Wiener explained which skills –decisiveness, focus and communication — will make any leader, regardless of how experienced, ready to adapt their companies and come out of the coronavirus pandemic stronger than ever.
With the negatives come some positives. Following the last economic crisis, Wiener said that digital agency 360i was transformed and grew its value eight times from the previous three years. “The opportunity we created out of that crisis was the best change to the company,” he said.
Three key qualities successful leaders need while facing a crisis.
Using different frame working tools and waterfall analyses, determine whether the cuts you make are temporary or will cause structural changes.
- Be decisive in going over the balance sheet. Prioritize the changes that are temporary (not matching 401k contributions or pay cuts) instead of structural (layoffs) because these are less likely to cause lasting damage to the company. It won’t be as easy to replace talent once this is over.
- Be focused in simplifying all areas of your business and eliminate all non-essential tasks on a tactical level.
- Be a great communicator. “You can’t succeed in [adapting] your business if your team isn’t behind you,” Wiener said.
When making structural changes, agencies are better positioned to make those changes than media or technology companies.
From a structural standpoint, the changes an agency has to make to its staff during a time of economic crisis are more isolated impacts to production, versus media and tech companies, whose layoffs and furloughs impact the entire output.
- At agencies, most costs are tied to people, therefore, cuts to staff have to be considered, however those people are tied to individual clients. Therefore, laying off people tied to clients that are shrinking their spend makes sense and will not impact other clients.
- Because of this, agencies are able to shrink down to a fraction of their size while saying operational.
- Media and tech companies that have to cut 25% of their staff will see an impact across the company’s productivity and therefore will impact its audience and clients.
Cutting marketing budgets is the easiest thing to do, but could be the most detrimental.
The marketing budget is often the first thing a CFO will cut to zero, as it is not crucial to immediate survival and it does not impact many jobs. Reducing all of that spend, however, is a significant mistake.
- The caveat to this is that by removing that conversation will consumers, it can end up destroying any demand that there is out there for the business. Then, a competitor can swoop in and take any available business.
- By losing out of that prospective new business, in the end, your company will end up having to cut more.
- Be strategic in where you refocus your marketing. “You almost always have to reduce marketing spend, but most companies don’t put the thought into it,” Wiener said.
Digiday+ members can access full video of the Talk and Bryan Wiener’s slides below: