Viewpoint

The Case Against Future-Proofing Your Business

KEVIN COUPE

FOUNDER, MORNINGNEWSBEAT.COM

When we avoid grappling with change, we embrace complacency.

The other day I was having a conversation with someone in the industry, who wanted me to make a presentation to her company about how to “future-proof” the business. It isn’t usually the best way to land a gig, but I told her that I couldn’t do that, because a) it really isn’t possible, and b) it isn’t a good idea. I explained: When you water-proof the basement of your house, the goal is to keep all the precipitation out. The tighter the better.

Businesses shouldn’t be future-proofed, I argued, because the last thing you want to do is keep all the influences out. If we’re going to stay with the house metaphor, in a business what you want to do is build it so the windows and doors are as big as possible so you can see everything going on around you…and then, you want to throw open the windows and doors so you can feel the sun and the breeze and yes, even the rain and harsh winds when they come. Because that way, you’re in touch with what is going on around you. You don’t keep reality out – you embrace it, you use it to build your strategies and tactics, and you revel in the fact that you are better connected to your environment than any of your competition. That’s particularly important these days, I think, because we’re coming off a year in which the impulse shared by most people and companies is to batter down the hatches and protect yourself from what’s going on around you with masks and gloves and visors and, if you’re a retailer, plexiglass and directed traffic flows and regulated occupancy. We know that our people are stressed out – they’ve been on the front lines throughout the pandemic, and public health experts tell us that anxiety levels and even suicide are surging. What this all adds up to is companies that are in survival mode – not any sort of expansionist or experimental mode. And I get that. For much of the pandemic, retailers didn’t have to do anything different – if they could bring merchandise in through the back door, all they had to do was open up the front doors and business would be brisk. Maybe the best it ever had been. I’d argue that this kind of complacency is dangerous. I’ve been saying almost from the beginning of the pandemic that this was a significant enough event, with market-altering repercussions, that it was critical that companies figure out how they would be fundamentally different coming out of the pandemic than they were going in. The world, after all, would be different… think about living in a new reality, not a new normal, mostly because I have no idea what normal even means anymore. And so retailers would have to be different, too.

Clearly all sorts of trends have been accelerated by the pandemic – think e-commerce – and an end to the pandemic’s more restrictive impositions is likely to cause some return to previous behaviors, I’m not sure retailers can expect old shopper behaviors to return.

Shoppers may want to return to the store to buy their fresh foods, but that’s because there is a tangible advantage to doing so. But going to the store to buy cereal, cookies, laundry detergent and the like – things for which there is absolutely no advantage to going into the store? I’m dubious. I think that many people have new learned behaviors, and there’s no reason to think they’ll toss away habits learned during the pandemic that actually made their lives easier and better.

Which means that retailers need to start thinking seriously about how to structure their e-commerce offerings – whether they be focused on click-and-collect or delivery, and figure out how best to make those functions reflect their own brand identity. They need to adopt automatic replenishment systems that will allow them to compete with programs like Amazon’s Subscribe & Save, and that will provide them with a fresh foundation on which to build relationships with shoppers.

The one thing they cannot do is assume that the consumers who found them and stayed with them during the pandemic will continue to do so. There will be lots of competitors looking to steal them away, and even a resurgent restaurant industry that will be doing everything possible to reclaim lost loyalties and discretionary dollars. There was an enormous opportunity during the pandemic that almost nobody took advantage of, and I think it illustrates how retailers need to think.

Every retailer that I know has data that allows them to easily identify who their best shoppers are. But during the worst weeks of the pandemic – when people would’ve donated a kidney for some wipes or paper towels or toilet paper or pasta or sanitizer or any of the things that ended up being in such short supply because of supply chain issues – I cannot find one retailer that reached out to its best shoppers to say, “We know that you’ve always been incredibly loyal to us over the years, and now we want to be loyal to you. We’re getting in some paper towels (or wipes or toilet paper or pasta or sanitizer or whatever) tomorrow and if you’d like, we’d be happy to put some aside for you. You can pick it up, or we’ll

deliver it. But we want you to know what when we say we value your business, it is more than just words.” Such actions would’ve created lifetime customers.

But I cannot find anyone who did it. Now, the moment has passed. Except…as I write this, there are all sorts of Covid-19 variants that public health officials are worried about, and there are concerns that the worst moments of the pandemic could be in front of us if things go badly. In which case, get out your data files. It will be like opening your doors and windows and connecting with a world that will determine your success or failure. ■

“Businesses shouldn’t be future-proofed,

I argued, because the last thing you want to do is keep all the influences out.”

iStock

CAPITOL INSIDER

It sure is great to have 2020 behind us!

LOUIE BROWN

IN THE SACRAMENTO OFFICE OF KAHN, SOARES AND CONWAY, LLP

2021’s legislative session is shaping up to also be

Brown defined by Covid-19-induced procedural chaos.

Unfortunately, the beginning of 2021 doesn’t look a whole lot different, especially as we start to focus on the new legislative session. Policy and politics is a people business. It’s handshakes and kissing babies. It’s one-onone meetings. And, with all that taken away, we are learning to do business differently – just like many others. We were three months into the session when the pandemic shut everything down in 2020. This means bills had already been introduced and we had started the budget and policy committee hearing process. As a lobbyist, it is not easy to find authors for bills, even when you can walk from office to office and talk with staff directly. Doing the same virtually, especially with the complex issues we deal with in the grocery industry, is downright frustrating! With that being said, even under Covid-19 circumstances, we anticipate the number of bills introduced in 2021 will be similar to most other years, somewhere around 2,500.

There will be a higher-than-average number of spot bills introduced, primarily because the more complex issues take more time. Virtual communication adds to this complexity. With the Assembly planning to limit the number of bills sent to the Senate, there will also probably be a higher-thanaverage number of bills converted to twoyear bills. The reason the Assembly is limiting bills is to prevent some of the acrimony we saw in 2020. When the Senate returned from the unplanned Covid-19 recess, most senators dropped several of their bills at the request of leadership. The Assembly didn’t do the same, which forced the hand of many Senate Committee Chairs to limit the number of bill hearings and deny hearings to assembly members. While this is standard practice in DC and many other legislatures, it doesn’t happen here and wasn’t taken well. For at least the first set of policy committee hearings, testimony will be primarily provided via telephone or videoconference for main witnesses, and telephone only for those wishing to give “me too” testimony. Since this is the same process used for the last half of the 2020 session, most of the kinks should be worked out.

However, even if everything goes smooth with the technology, this process will present the opportunity for people to load up the lines on controversial matters, causing extremely long hearings. This doesn’t bode well for the process since there are only two rooms on each side of the Legislature where hearings can take place, due to social distancing requirements. Add the need to schedule budget hearings, and we could quite possibly see hearings taking place over some weekends.

While this chaotic process doesn’t always lead one to believe that it’s well-structured, the deadlines are not easy to move and are usually adhered to. If we go the entire session under Covid-19 protocols, we could see yet another wild end of the session.

For two years in a row, we have seen the unexpected. In 2019, an anti-vaccine advocate threw a menstrual cup onto the Senate Floor. In 2020, the entire Republican caucus, except for one member, was exposed to Covid-19 and banned from being in the Capitol for the last week of session This year, I yearn for a good old fashion end-of-session, filled with boring political speeches, interhouse battles, long days and sleepless nights. Let’s hope the latter half of 2021 moves us back to our old normal. ■

GOVERNMENT RELATIONS

A year unlike any other

KELLY ASH

VICE PRESIDENT CGA GOVERNMENT RELATIONS

Resilience was the key to 2020 and is likely to continue to be vital in 2021.

The term resilient has been thrown around a lot lately, but in 2020 grocers were the epitome of the word. CGA members weathered storm after storm through 2020 and continually regrouped and focused on how to do the best for their communities. It is an honor to be in this role and to be able to have a front row seat.

While grocers showed resilience by withstanding a pandemic and constantly changing health concerns, they also endured through many different pieces of legislation, regulatory guidance, executive orders, and local ordinances.

The pandemic-dominated year of 2020 started off with several executive orders on issues from temporary supplemental paid leave to workers’ compensation changes and plastic bags. Then the Legislature came back into session and completely changed their focus from a regular year of bills to all budget and Covid-19 specific legislation. As if this wasn’t enough of a challenge, local governments worked on ordinances from delivery hours to their own supplemental paid leave and beyond. March started with a statewide shutdown and introduced panic stockpiling on items like toilet paper and bottled water. Grocers had executive orders flying at them fast to handle trucking weight loads, social distancing requirements, capacity limitations, reusable items being banned from inside the stores, and more.

One main executive order that later turned into legislation was temporary supplemental paid leave. CGA worked with members and labor advocates, at the request of Gov. Gavin Newsom, to craft language for the first temporary supplemental paid leave in the state. While it was a time of give-andtake, CGA members engaged to ensure it was the most reasonable order it could be. Looking back, this was a smart move because the Legislature based their bill on this very executive order.

When legislators came back to work after a Covid-19 related pause, we saw bills relating to workers’ compensation, supplemental paid leave, expanded family leave, further health and safety standards specific to Covid-19 protocols, and much more. One thing was sure, legislators were trying to find a way to impact the pandemic during a very contentious election year. This was good and not so good. The desperation for legislators to make a positive impact for their constituents during Covid-19 led to many, and often duplicative, bills that weren’t well thought through or researched for their unintended consequences. CGA members stood up and ensured that policymakers knew when their bills were unreasonable or where the problems existed and how they could be fixed. Nothing was a sure bet in 2020, and we are seeing that linger well into 2021. However, the Association’s members have continued to do the best they can to work through these new bills, orders, and ordinances that have been placed on them and our team has continued to advocate for our members to attempt to help government understand the real-life impacts of their proposals and decisions. CGA continues to stand up for our members and their communities by educating government officials, the media, and the public about the real implications of government decisions. Maintaining resiliency throughout this year will be key to impacting legislation, orders, regulations, and ordinances while officials are still reeling from the effects of this pandemic. ■