We can see the world in many ways. If we look at it from a win-loss perspective, then we can see a world of opportunities or a world of risks. What is the consequence? We will have an offensive or defensive approach in our decisions and actions both personal and business.
In crisis situations, we will act automatically according to the perspectives adopted between the two. The results will be different, so this article highlights the benefits of the offensive approach which means: betting on potential, determination to seize opportunities, transformation, and lifelong learning.
1. The characteristics of the defensive and offensive approach
Defensive – Mitigating the highest risks is crucial from an operational point of view as well as from a cash flow point of view. This is a continuous effort. Short-term liquidity and solvency actions are essential.
On the defensive, there is a need for a strong unifying vision, robust governance and corporate culture, which guarantees that resource management is well done.
Skepticism about the value of new digital trends and overly cautious concern about spending leads to lost opportunities to the advantage of competition.
Offensive – Paves the way for the next phase. Industries that have been in the status quo for a decade are now wide open to transformation. Companies that move quickly and decisively will win.
Profitability for digital conservative companies is only 9% compared to 26% for digital transformation-focused management companies.
Offensive company leaders focus not on risk but on potential, have advanced knowledge of new technologies, are open and allocate significant budgets for technology investments.
2. The difference between a defensive and offensive approach
While the defensive approach is aimed at protecting revenue, defining budgeting, implementing cash protection measures and stabilizing operations in the distribution and manufacturing chain, the offensive approach looks at developing a strategy to gain a competitive advantage and plan for pivoting or developing new products, services, markets or business models.
In the case of the defensive approach these immediate measures are followed by monitoring the comparative reality with the scenarios made and adjusting them, divestments and operational adaptation while in the case of the offensive approach making a business pivoting plan, targeting investments to growth areas, developing new products/services, markets or business models.
|The defensive approach
1. Income protection
2. Defining re-budgeting and implementing cash protection measures
3. Stabilization of operations (distribution chain, manufacturing)
In a month:
1. Reality monitoring vs. scenarios and adjustment accordingly
2. Ongoing re-budgeting and divestments
3. 3. Bringing operations back to normal for the next 18 months
|The offensive approach
1. Develop a strategy on how to beat your competitors
2. Planning the pivoting or development of new products/services, markets or business models
In a month:
1. Making a business pivot plan
2. Establishing investments in growth areas
3. Development of new products/services, markets or business models
3. The defensive vs. offensive leadership
Defensive attitude weakens learning agility and affects the mentality of personal and professional development. Agility in learning includes practices such as improvement efforts, questioning the normal way of doing things and evaluating everyone’s experiences.
Defensive leaders are deficient in communication, adaptability, ability to achieve business goals and self-awareness.
Defensive attitude often hides the reality of what you do, making both your goals and transparency within your team opaque.
Offensive leaders know their colleagues, know their customers, learn and update continuously, cultivate cooperation, are creative, make clear decisions, and invest in team development and preparation.
Research indicates that leaders who learn and act agilely are more successful, both in contributing to the company’s revenue and in the overall performance of employees and managers.