Hindsight 2020! What doesn’t kill you

Hindsight 2020! What doesn’t kill you

Hindsight 2020! What doesn’t kill you

“You can’t connect the dots looking forward; you can only connect them looking backwards” – Steve Jobs

In January 2020, we had no idea what was ahead of us; however, we benefited from the hindsight in December. In this article, I will summarize the lessons I learned while managing my business through 2020!

Before getting to the topic of business, let’s pay our homage to those who lost the battle against the virus. May all the departed souls rest in peace.

We, who are fortunate to live through this pandemic, should be grateful for the thousands of COVID Warriors who worked tirelessly to keep us safe. We should also thank our immune system, which defended us against the deadly virus. In the future, the presence of new antibodies (either naturally occurring or by vaccination) will make our immunity stronger and hopefully increase our defense against the virus.

What Doesn’t kill you, makes you stronger !

This aphorism of the 19th century, by German philosopher Friedrich Nietzsche, is so relevant even today. 

Let us now shift our focus and apply the analogy of immunity and antibodies to business situations to see if there are any parallels in the business world.

From my own experience of navigating ‘Forms+Surface India’ through this crisis, I learned that four immunity boosters are a must for a small organization to survive a prolonged economic recession (Economic Pandemic).

  1. Focus on the balance sheet
  2. Geographical diversification
  3. Stake holder relationships
  4. Adaptability


Focus on Balance Sheet:

While blood sugar is necessary for the human body to function, excess of it leads to diabetes, which is a primary cause of many other diseases as it weakens our immune system.

Similarly, while some leverage is healthy, excessive leverage is akin to having diabetes, leading to weak immunity. Historically, excessive leverage, or debt, has been one of the biggest reasons for business failures and bankruptcies.

Also, if cash is oxygen, then the fixed cost is a constant consumer of it. We need a dual strategy of keeping consumption low and having some reserves handy if the supply of fresh oxygen (cash flows) stops, as happened during the April-June period this year.

At F+S India, we learned our lessons after the demonetization exercise of 2016 and built an emergency cash reserve of approximately three months of equivalent expenses. It was idle cash and impacted our return ratios in 2017, 18, and 19. However, it proved to be our lifeline in 2020. Thankfully, we survived the current pandemic without any adverse impact on our employees or vendors.

As entrepreneurs, we are driven by P&L and growth in good times; however, balance sheet quality decides our survival during a crisis.

Multiple Revenue Streams:

Similar to how the virus impacted different people with different intensities, the impact on business wasn’t uniform. Some segments and/or geographical areas were more impacted than others.

While large conglomerates can have business segment-level diversification to increase their immunity, small businesses don’t have such a luxury. The only option for us, therefore, is to diversify geographically as much as we can.

For example, in May ’20, when most of India’s customers were still closed, one customer from East Asia placed a reasonably large order. This order helped us run our manufacturing operations as soon as governmental permission was received. Geographical diversification of our customer base spread across multiple countries helped us reduce our risk.

Diversification can be a lifesaver for the business!

Stakeholder Relationships:

This is a no-brainer as it is akin to maintaining good hygiene.
Support from various stakeholders during a crisis is positively correlated with the health of relationships during good times.

Loyal customers and vendors, patient investors, a motivated team, and a supportive government or society are crucial for survival during a crisis. None of this is possible without healthy relationships (hygiene) during good times.

We wouldn’t have completed the large Asia order mentioned above if our staff had not joined work during the peak of the pandemic in Pune and if the local administration wasn’t kind enough to permit us to operate.

Everything and everyone counts!


I want to equate this with the importance of yoga for the human body. Yoga (or exercise in any form) is known to have a positive impact on our immunity. Similarly, businesses that are flexible enough to adapt to the new normal have weathered this pandemic better than others.

Even in good times, generally speaking, people with better fitness have relatively less trouble as they age. As companies also have a lifecycle, adaptability to new technologies and business models can help us prolong a business’s life.

“It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.” Charles Darwin

Survival is a pre-requisite:

History suggests that every crisis leads to a reduction in the number of players and, therefore, the consolidation of the industry. Surviving players then get a larger pie of the growing cake.

For example, Amazon Inc. a relatively small company in the year 2000, survived the Dotcom crisis when dozens of other e-commerce companies died. The rest is history.

Closer home, India had about 12+ telecom players about a decade ago. Bharti Airtel survived multiple disruptions in the telecom industry from 2010 onwards and will now share the growing market with only two other players.

Survival is a pre-requisite to growth!

Anti-bodies to fight next crisis:

The next logical question is; what additional antibodies resulting from this crisis will protect our business in the coming years?

This can be different for different people. However, to me, this antibody is ‘Higher Trust.

Customers will trust our business more. Employees will have higher trust in the company, vendors will give us priority treatment, and investors will know that their invested capital is in safe hands. Living through 2020, I realize that making our business robust is not enough. We need to make it ‘Antifragile.’ Mr. Nassim Nicholas Taleb described it so beautifully.

“Anti-fragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the anti-fragile gets better”

2020 is a reminder that we can’t connect the dots looking forward. We can’t predict the future; we can only prepare for it. Let’s use this crisis to get better and be ready for the next crisis, whenever it comes!

Thank You!

Category: Life

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