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The minimum viable business
We’re all accustomed to an environment in which the core objective of a business is to grow. Now we need to adjust to a world in which the core objective is to survive. To do that, we need to be clear about what makes a “minimum viable business”—the essential economic activity it needs to keep in place, so that when the time comes, it can grow again.
The logical assumption would be to wait—wait until there’s enough certainty about the shape of the wider economic downturn caused by the COVID-19 crisis. Falling death and infection rates in some countries are paving the way for some cautious reductions in the level of lockdown. Some governments are starting to map out how a “managed release” could happen. All that helps decision makers: A small amount of certainty goes a long way in these times.
The only real certainty we’re getting is that the crisis won’t have a clear-cut end. Things will be likely to change, possibly dramatically and at shockingly short notice, for the foreseeable future. A sudden surge of infections might close a city down; links in fragile supply chains may bring factories in other countries to a grinding halt; employees may be able to go to an office one day, only to find themselves banned from it the next.
If we wait, we could wait forever. We should instead go back to square one, take a blank sheet of paper, and think of what it will take to operate to some degree during an indeterminate period of significant upheaval. The objective of a minimum viable business is to survive at a level from which future growth will happen, but it starts with the assumption that you keep things as small as you can while still doing something.
In designing our minimum viable business, we should ask:
- What is our business? We need to be utterly clear and precise about what we’re here to do, about what, at its most fundamental, makes us special and how we succeed.
- What should we do to maximise revenue? We can only afford to defrost the products and/or services that are essential to our business. Are you a café that people used to come to because of the quality of your coffee? Just make coffee.
- How can we change our processes and use technology to ensure cost-effective scalability? The ability to act on changing conditions almost instantly will depend on imagination and technology.
- What impact will this have on our workforce and how will we manage this? To date, this crisis has been conspicuous in that employers, helped by government salary protection initiatives, have sought to keep staff rather than lay them off. No one would want that sense of social responsibility to change, but we will need to consider the capabilities required in a “minimum viable” environment and ensure that the people who we’ll depend on can work when we need them to.
- How can we mitigate and manage the inevitable risks? That some hospitals have been subject to cybersecurity attacks is a salutary reminder of the hidden dangers of an environment in which there’s no time for due process. It means we need to be clear about what the most important risks are, and which we’re prepared to run.
None of this is new: The rocket science will lie in consultants’ ability to ignore the status quo, to start with a completely blank sheet of paper, to be prepared to consider anything, and to question everything.