My Covid-19 spring cleaning list

The coronavirus pandemic creates an opportunity for many brands to reassess their business strategies, and they should take it because it won’t come again.

I’ve had a corn on my right foot for about a year. It’s an evil little bastard. You’d hardly notice it, nestled there in the middle of my foot. But, on a regular basis, it gets angry and starts to cause me immense pain. It’s like having a little gremlin hanging onto your ankle and occasionally stabbing you in the base of your foot with a knitting needle.

I’ve wanted to blitz the fucker for months. I’ve spent hours looking at ‘foot porn’ videos on YouTube, in which a young chiropodist whips out a scalpel and dispatches a humongous corn the size of a squirrel in three minutes. I’ve ordered enough corn plasters and foot scalpels to service a Roman legion. And I’ve bought half a dozen pumice stones and hung them, like a podiatric rosary, around my showerhead.

But I’ve done precisely nothing to my corn with any of these things. The problem is time. And travel. And work. And all the other assorted bullshit that stops busy people like me, or you, doing anything that involves a few minutes of daily attention. I’ve had too much to do and too many different places to be in. So, the little gremlin with the knitting needle has continued to enjoy himself down there.

And then came Covid-19. Suddenly there was no travel. I started tidying my home office. Gardening. Fixing gutters. I had time. And very quickly I turned my attention downwards to my corny little friend. I researched and then ordered really good corn plasters. I applied them scrupulously for 10 days straight.

I’ve had a corn on my right foot for about a year. It’s an evil little bastard. You’d hardly notice it, nestled there in the middle of my foot. But, on a regular basis, it gets angry and starts to cause me immense pain. It’s like having a little gremlin hanging onto your ankle and occasionally stabbing you in the base of your foot with a knitting needle.

I’ve wanted to blitz the fucker for months. I’ve spent hours looking at ‘foot porn’ videos on YouTube, in which a young chiropodist whips out a scalpel and dispatches a humongous corn the size of a squirrel in three minutes. I’ve ordered enough corn plasters and foot scalpels to service a Roman legion. And I’ve bought half a dozen pumice stones and hung them, like a podiatric rosary, around my showerhead.

But I’ve done precisely nothing to my corn with any of these things. The problem is time. And travel. And work. And all the other assorted bullshit that stops busy people like me, or you, doing anything that involves a few minutes of daily attention. I’ve had too much to do and too many different places to be in. So, the little gremlin with the knitting needle has continued to enjoy himself down there.

And then came Covid-19. Suddenly there was no travel. I started tidying my home office. Gardening. Fixing gutters. I had time. And very quickly I turned my attention downwards to my corny little friend. I researched and then ordered really good corn plasters. I applied them scrupulously for 10 days straight.

And on the 11th day, as my usual evening benediction was taking place, I removed the plaster and, with it, every last speck of the corn too. I am corn-free and have the soles of a 15-year-old choirboy to prove it.

It looks sensational. Really. If you saw my right foot you’d want to spontaneously kiss it. And it’s all thanks to coronavirus and the time it gave me to focus on fixes. Without it, I would still be limping around with my foot gremlin, scaring small children with occasional profanities.

And the same is true, right now, of businesses. Make no mistake, this is a tough time for almost everyone. But there are three valuable upsides to the coronavirus lockdown.

First, there is a long-enforced pause in the tactical minutiae of daily business that allows you to see the big picture. Second, the virus presents you with the time to remedy some of the long-standing issues that your moment of reflection has subsequently revealed. And finally, the pause in trading enables you to fix those issues once and for all, before the wheels of commerce grind into motion again.

If you are a young, corn-free marketer who has yet to see proper big businesses at a very senior level, this won’t make any sense. Yet. You still see companies as always-efficient capitalist machines that are unencumbered by ancient baggage.

But they are not. Even the most successful company is riddled with the unnecessary complications and costs of former periods and earlier strategies.

Like middle-aged ex-marketing professors with foot trouble, companies pay the price for being busy and relatively successful, and it starts to hurt them a bit. Not enough to stop and change, but enough to restrict future movement and success. And the fact that a company is still busy and successful and big means that no-one has the time or the guts or the motivation to fix the issues.

Until now. Coronavirus will wipe out a giant swathe of businesses in the months to come. But for those that remain and know that they will endure, there is now a tantalising opportunity to cut the strings of decades of unwanted stuff and streamline the business like never before.

To fantastically misquote Nietzsche, if coronavirus does not kill your business, it could allow you to make it a lot fucking stronger. And it’s now or (too late, here comes the customer again) never.

The good news about coronavirus is that it presents a time of customer pause, financial scrutiny and strategic clarity.

I am not saying that coronavirus will change everything so that you have to reinvent your business. That’s the opposite of what I think. Coronavirus is not going to change anything once it ends, aside from providing companies with a strategic time-out to do the things that they should have done but could not do because there was too much shit going on.

If foot ailments are the downside of middle age, the upside is suddenly having C-suite friends. Unimportant managers you helped load into a taxi after a massive night out in a dodgy part of Buenos Aires are now the CEOs and CMOs of some of the biggest companies in the world. And in recent days, I’ve been talking to a handful of them because all of us have more time to talk and, frankly, we are enjoying it.

And all the smart ones are currently engaged in a once-in-a-lifetime spring cleaning that they will never get the chance to do again. I can’t name names or my old friends will become new enemies. But you, like them, should consider the months ahead a chance to review some, or perhaps all, of the following. Here is your Covid-19 spring cleaning list.

1. Brand portfolio

Every company has too many brands. Add up decades of acquisition, extension, innovation and experimentation, and you usually arrive at a brand portfolio that is so large none of the leadership team can actually list all the brands they are meant to manage. And they keep creating more.

McKinsey used to have this awesome chart it would produce, at massive cost, showing a client’s brand portfolio on two axes. On the X axis were all the brands that the client company owned, from the biggest to the smallest. On the Y was each brand’s profit (note, not revenue) contribution to the business in the last financial year as a percentage of the company’s total profit.

It was a fucking killer slide, because you’d get the first three brands doing 75% then 45% and then 15% of profits, and then a long painful hinterland of dozens of brands doing the empirical equivalent of the Birdie Dance. The biggest three brands added up to more than 100% because the rest were either making bugger all or losing money.

You did not even need to discuss the chart. You just put it up there and went out for a cigarette while people packed up their desks, apologised and left the building.

Companies love creating brands. They never kill any. And when I worked with companies to kill some of them, they would always propose some little loser brand that everyone hated. My standard line was to explain that they were answering the wrong question. I didn’t want to know which brands they wanted to kill, I wanted them to imagine they were starting the business again in a parallel dimension. Which ones would they keep?

They always knew too. But rarely did anyone have the guts to get the corporate machete out and do the deed. I worked with a few killers, but not enough. The brand portfolio became the justification for its own existence: we can’t kill brands because we can’t kill brands.

The good news about coronavirus is that it presents a time of customer pause, financial scrutiny and strategic clarity. The perfect window to tighten the brand portfolio once and for all. A killer’s moon.

2. Product mix

It’s the same story for products, so I will keep this one brief. Just as companies have too many brands, they also have too many products. Most companies are doing 80% of their profits with 20% of their products. That prompts the question why anyone would be fucking around with the 80% of products that make just 20% of profits?

The short, simple answer is they are looking at the wrong chart. The one with “sales revenue” in the title. If you like sales revenue you will want as many products as possible. If you like profit, you’ll be ripping through the product mix like there is no tomorrow.

Coronavirus again presents companies with a golden moment to review the product portfolio and make the hard calls. By the time consumers start buying again the pointless SKUs will not only be gone, none of the customers will even remember they ever existed. You will have the focus and improved margins to do so much better as a result. And much needed room to, you know it, launch new products.

3. Channels of distribution

There is no area of greater inertia and dangerous legacy thinking than distribution channels. Companies have too many distributors, which creates umpteen problems at point of sale.

They have built up a retail network that also makes no sense to anyone. But because deals have been done, stores opened and territories created, no-one dare suggest that channels can and should be trimmed back.

There is always a recurring fear that, because we are dealing with the sharpest side of the marketing machine, the place where products are sold, any change in the distribution systems might impact sales. Suggest cutting advertising and the rest of the company kisses you like a long-lost brother; recommend a reduction in distributors or retail infrastructure and you are persona non grata.

Because deals have been done, stores opened and territories created, no-one dare suggest that channels can and should be trimmed back.

The simple truth of distribution is that it should always – as the great Insead professor Erin Anderson used to always observe – reflect the business strategy of the company behind it. If you are a simple, direct brand you should operate a simple, direct distribution system. But sales and salespeople get in the way of that.

Again, as Covid-19 causes the lowest tide in recorded retail history, there is a chance to revisit distribution strategy now and make the important changes.

4. Marketing budgets

The biggest scandal in marketing is the way that budgets are set each year. Most marketing departments are ‘given’ their marketing budget after the finance team has a) worked out how much money the company will make next year and b) applied a totally bogus percentage of sales to that number. It’s total nonsense but impossible to stop, because the cycle of the business and the power of financial precedent are impossible to depose.

Until now. With most firms not expecting to start advertising again until September or later, a once-in-a-lifetime opportunity emerges to take time to think about marketing budgets more deeply and avoid the traditional cyclical nonsense of top-down advertising-to-sales ratios.

It’s normally very hard to get a company to consider zero-based budgeting because it’s such a total shift in approach for them. But coronavirus has created a temporary zero base for many companies.

They have had to stop spending marketing money and, in many cases, also stopped receiving any sales revenues too. That means the budget clock has stopped. You have a rare opportunity to see marketing as an investment, and make a new case for marketing money based on what it can do for the business, rather than on what we spent last year.

And while you are budgeting, think about the 60/40 rule too. For many companies, the addiction to short-term performance marketing means little if any money is invested in longer-term emotional brand-building. But with so many businesses seeing no immediate sales potential out there for many more weeks, there is an existential opportunity to pause all short term ROI-based marketing spend but maintain longer-term branding investments.

Those long-term investments will work better with so many competitors pulling back and, when the recession ends, they will have created a significant head of steam as consumers head back to the shops.

Most companies are going to cut their marketing budgets for the rest of 2020. Many will cease their marketing spend completely. But the smart ones will – at the very least – spend a bit of money to keep their brand salient and out there in market.

The early bird does not get the worm. The one that was up all night using an integrated mix of codified messages has already attracted all the worms and is now scooping them up in its fat little beak.

There are many more options to consider as the coronavirus spring cleaning takes hold. But as I look down at my gleaming, Brad Pitt-like lower appendage, I can only impel you to act and act now. You have a unique window to think, decide and do. One that will, hopefully, never arise again.