Amazon, Disney, & J.Crew: Lessons for Your Church During This Time of Crisis
We’re all in the same boat but facing different storms.
This has been a difficult season for every business, organization, and church as they deal with the impacts of both the Coronavirus and the extenuating economic crisis left in its wake.
No doubt your church is thinking about next steps and trying to wrestle through what comes next, including the process around opening your church back up and how to deal with the financial implications that your church is facing.
Getting your church fully online took a lot of work, but now there are 1,001 other decisions that you need to make.
A helpful place to look for leadership advice is outside of your immediate circle. Oftentimes you can find unique and novel solutions simply by learning from what different organizations are doing in their sectors.
Amazon, Disney, and J.Crew are three widely recognized global brands. Each of them are going through their own metamorphosis because of the Coronavirus crisis. These three companies provide some unique lessons that you and I can think about in the context of our churches. They provide a framework for how we might lead differently or ask questions about our current leadership.
We’ve just passed through an earnings season where many companies are reporting publicly (often for the first time) the impacts that this virus has had on their businesses. The lessons that we glean from these examples can be valuable for our leadership both in the present and for the future. So let’s take a look at these three companies and pull out some lessons that you could apply to your church.
Amazon: Investing For The Future
Amazon is a multinational conglomerate company with over 750,000 employees. You probably know them for their online shopping, but they’re also involved in cloud computing, digital streaming, artificial intelligence, and a number of other initiatives. They are one of the “Big Four” tech companies along with Google, Apple, and Microsoft.
Amazon truly is one of the most influential economic and cultural forces in the world.
In a recent earnings call, Jeff Bezos, the CEO of Amazon, spoke with great candor. In fact, at one point in the call, he actually told Wall Street that everyone should “take a seat” because this is going to be a bumpy ride.
Amazon has pledged at least $4 billion to confront the immediate impacts of the Coronavirus and economic crisis that they’re facing. They’re investing in people by hiring over 175,000 new employees, most of whom were hired in the month of April! The company needed to invest over $300 million in setting up COVID-19 testing facilities both to ensure the safety of their workforce and to not compromise the supply chain. They’ve also had a tremendous shift in the product mix, forcing changes throughout their entire operation. Plus, they’re doubling down on a number of investments for the future by capitalizing on the current crisis to push agendas that they’ve been working on for a long time. These initiatives include delivering the lowest prices online in any given category and speeding up their delivery timeframes. There’s a number of lessons that our churches can learn from Amazon in this moment.
- Personal protective equipment will need to have a budget line in your church’s finances. // Until we come to the point where a vaccine is widely available and accessible, our churches will need to provide safety precautions for people as they come into our facilities. Our kids’ environments will need to be protected. Our staff and volunteers will need to be socially distanced in one way or another. Your church is probably going to need to invest in personal protective equipment and resources to ensure that your team and people are safe and healthy.
- Change your service mix. // Part of what’s breathtaking about what’s happened with Amazon is how quickly they’re pivoted on how and what they deliver. Responding to their market, they’ve made a massive shift into online food delivery. Their grocery delivery capacity went up 60% and they nearly doubled all in-store pick-ups at their Whole Foods chain. Turning on a dime, they have changed what people get through their services because their customers have demanded that shift. In this moment, it would be good for you to listen very carefully to your community, not run the same play you did eight weeks ago. Try to understand how your people and community have changed and how what you are offering has to change as well. In the midst of the crisis a few weeks ago, I pointed out to some friends how much children’s educational materials were selling on Amazon. In fact, they took up 15 of the top 50 spots, almost unheard of in the history of book sales. At that moment, churches needed to be responding with great kids ministry curriculums to pass on to families. What has changed in your community in the last six to eight weeks that you need to respond to?
- You should be thinking long term. // One thing I’ve always admired about Amazon is their ability to focus on the long run. For decades now, they have been focusing on delivering items more quickly at a lower price. You and I have a timeless message that makes a generational impact on people’s lives. How can we be doubling down now on the life change that is happening in our communities? What do we need to be doing to ensure that the people that come to our churches are impacted by the message of Jesus and are moving forward? What issues or felt needs are causing new people to regularly connect with your church? How do we invest in those needs and connections now for the long haul?
The Walt Disney Company: Bob Iger Was Wrong (In the Best Ways)
Disney is an American multinational, mass media and entertainment conglomerate. Originally founded in 1923 as a simple cartoon studio, Disney has globally expanded into a media juggernaut. Disney’s businesses range from studio production to television, theme parks, direct to consumer, cable television, and so much more.
Disney sits in a favorable spot of not only being a massive company but also a brand that is often associated with family values and wholesome content.
Disney has been under incredible pressure these days. Their core businesses have been greatly impacted. During a recent earnings call, it was reported that the company experienced a 58% drop in operating income from their theme parks and cruise business, which represents nearly 40% in their overall operation. When we think of Disney, many of us think about going to a great theme park and engaging in person with the Disney universe. For the first time in its history, that part of Disney’s business is closed and suffering. At the same time, their direct to consumer product, Disney+, has shown incredible growth.
When Disney+ was first launched last year, Bob Iger, Disney’s CEO at the time, predicted that within five years they would be at 50 million subscribers. Well, in the month of April 2020, Disney+ passed the 58 million subscriber mark. It turns out that Bob was wrong in such a great way.
What’s happening at Disney is a bit of a mixed story. Their core operations are still under a tremendous amount of pressure that is raising many questions and concerns: When will they be able to get back to producing new great movies? When will they be able to open their theme parks again? When will the cruise lines be able to travel? However, their direct to consumer business is buoying their performance and showing strong potential for the long run. In fact, their pivot into Disney+ is potentially the smartest thing that the company has done in at least a generation. Here are some lessons that you and I can pick out from Disney in these days.
- Develop more direct connections with people. // A fascinating part of the Disney+ story is the fact that Disney is moving away from a relationship where they have a mediator between them and their consumers. They used to make television shows for networks that would ultimately be passed on through cable providers that “owned” the direct relationship with individual customers. Disney would make hit movies that would then be distributed through distributors that they owned, but the final product would be offered by movie theaters that had those valuable direct consumer relationships that Disney couldn’t engage with. The amazing thing about Disney+ is not just the revenue it’s generating but the fact that it’s generating that revenue directly from people. You and I don’t need to be thinking about the masses of people that attend our services or the large audiences in our auditoriums. We need to be thinking about our people as individuals and how we can deliver customized experiences as we move forward, rather than trying to herd people into experiences that are designed around our needs. How can we develop experiences that are designed around individual people within our church?
- Disney’s pivot to online has been both industry-defying and quick. // It’s been fascinating to watch Disney’s pivot towards Disney+. Rather than just continuing to replay old content, they have moved fast to release new content onto that platform during this season. Early in the month of March, Pixar’s new movie Onward was released in movie theaters. This movie cost approximately $200 million to produce and had its legs cut out from underneath it because of COVID-19. Rather than trying to relaunch it in theaters, Disney quickly moved to launch it onto Disney+. They have increased the pace of releasing new content rather than trying to store up content. They’re saying, “How do we capitalize on this moment and push our best stuff in front of people?” Many of our churches have been forced into a scenario where we’ve had to go online because of what we’re facing. Now’s the time for us to look beyond online content as just a bandaid solution for the season. We need to ask ourselves how we can increase our commitment and pacing in online environments and do a better job going forward. How do we create great content that will develop communities for people to gather around and connect with over an extended period of time? These direct consumer, direct to customer, direct to audience connections through digital mediums are here to stay. What can we do to make everything of this moment?
- Family is always a great business model. // Disney is built on families. Families go to movies in droves. We buy Disney+ because of our kids. We take our children and grandchildren to Disney theme parks. We travel together to these environments as a family unit. Many of our churches have the same resonance and attraction when thinking about kids ministry. The churches that will survive on the other side of this crisis are doubling down on serving their families and are finding new ways to connect with the families in their communities. Kids ministry has always been a way to grow your church. That was true before the Coronavirus pandemic and will be true long after it.
J.Crew: Not “Prepped” for The Future
J.Crew was an American multichannel specialty retailer that offered a wide assortment of women’s, men’s, and children’s apparel. They were known for producing a “preppy” look across every possible bag, sweater, shirt, and dress that you could think of. At one point, this company had over 450 outlets across the country. They were a multibillion dollar a year organization. J.Crew has been around for over 70 years, but in the middle of the Coronavirus crisis, they filed for bankruptcy.
J.Crew was drowning in debt and having been slow to pivot in previous years, it finally succumbed to that debt.
It’s not that the online game beat them. It’s the fact that they were not able to pivot fast enough and instead held onto old models that required them to sustain incredible amounts of debt to the point where they just couldn’t pay those debts any more. There are some heavy lessons we can learn from J.Crew’s experience.
- Government liquidity won’t save all churches. // How do I be honest and clear in this moment without causing unnecessary pain? I’m thankful for the government bailouts that are helping so many churches and ministries across the country. Many of us are able to keep our people employed and remain liquid as an organization because of that support. We’re thankful for that support and that it is keeping people employed in this moment. However, there will be an end to the resources that are currently available from the federal government. At some point, churches with heavy debt loads won’t survive. This is a sober reality that we need to seriously consider as we think about what’s happening at our churches now and as we look to the future.
- 30% of retailers are considered junk debt. // When looking at this issue of debt and how it’s impacting organizations, it goes without saying that the retail sector is a mess. There are wide swaths of the industry that are carrying incredible amounts of debt to try to sustain their beautiful facades in malls across the country. As we see that sector continue to shift in the coming years, we’ll see many more of these kinds of bankruptcies like J.Crew. This creates a tremendous opportunity for churches like yours and mine. If your church is looking for a new location in a strip mall down the road or even in a premium retail space, keep a careful eye on the locations close to you. In the coming months and years, we’re going to see a historic rise of availability in retail space. Our churches may be able to occupy some of that space at low cost. Some of that may come through us structuring creative leasing opportunities or buying out entire properties at pennies on a dollar for what they were built. Banks are trying to get out from underneath the debt. The crash of retail across the country will create new opportunities for churches who are looking for spaces to expand and serve the needs of their community.
- Get cash on your balance sheet. // For years there’s been an interesting conversation brewing within executive pastor circles around how much cash a ministry should carry. Depending on who you talk to, it’s anywhere between three months to six months to maybe even over a year of cash reserves to help plan for a moment like this. Churches that decided to spend all their cash and never retain any kind of cash reserves are going to struggle in the coming months and years. One of the things that Coronavirus has taught us through cases like J.Crew is that we need to be organizations that earn interest, not pay interest. Don’t take a self-righteous position of saying that you don’t pay interest to anyone or that you don’t carry any debt. Your church needs to be earning interest and carrying cash reserves. You need to have money in the bank that you can use during a crisis like the one we’re experiencing now. It’s been encouraging and inspiring to see churches across the country who have planned and been able to deploy their resources to make a difference in their communities. Those churches will do an amazing job in the coming months and years.
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