Business Agility and Innovation – Why Now is the Most Important Time
Businesses who have put a contingency plan in place to sustain the downturn can come out the other side of this crisis thriving.
Nearly everyone around the world has been impacted by COVID-19 in some way. Business owners have had to lay off staff, close offices and stores, and owners are now facing a potentially deep recession. These employers now face the daunting task of making major and swift shifts across their businesses to combat the slowdown, keep employees working, and find ways for customers and clients to still make purchases. It is in times like these that businesses who have put a contingency plan in place to sustain the downturn can come out the other side thriving. For companies that do not have a plan or have an outdated strategy, we have highlighted some of the key areas that require attention in order to survive this global crisis.
To start, companies need to assign incident management roles, and have these team leaders prepare scenario plans that are specific to the most detrimental impacts of this pandemic. These leaders need to concentrate on how to effectively communicate internally, as well as with clients. Identifying how to minimize the risk of supply chain and business disruptions will lower the threats a company faces, and will allow the leaders to focus on how to reposition the company to achieve success now and after the crisis is over.
Next, company leaders need to focus on digital transformations, as problems will arise operationally with no one being able to participle in person. Examples of such problems include gaps in workforce planning, IT, and operational infrastructure. To combat the slowdown in revenue and profitability, and adapting to an all-digital workforce, leaders need to update all forecasts and models to anticipate a shutdown of several months. Upper management and all employees need to work together to identify solutions through scenario planning and create new models internally that can be built on from company playbooks during past pandemics.
Tax considerations also need to be made, especially for global companies. Analyses need to be conducted to identify the tax impact, prepare an analysis of the firm’s global operational structure and presence, and identify solutions to minimize COVID-19 risks and to prevent further disruption of business. Currently, such disruptions are being seen in supply chains across the globe, and as mandatory shutdowns take place all over the world, operational problems are likely to increase dramatically.
Company leaders need to analyze alternative supply chain scenarios and be prepared to make changes as the virus continues to spread throughout the globe. To help minimize the time it would take to make changes within the supply chain, leaders should pre-approve substitutions such as for raw materials. Leaders will also have to consider pricing strategies depending on the customer’s geographic location and the impact of the virus there.
With the collapse of global financial markets, liquidity is of utmost importance during this time. Heavily debt-laden companies should avoid increasing their exposure, and enforce more stringent financial ratios. Weekly reviews may need to be changed to daily reviews to keep up with the rapid changes many companies are experiencing. Models should be prepared to identify the future impact on capital resources and liquidity, to prepare for any new issues that may be on the horizon.
While the health and safety of employees is paramount, it is vital for owners to treat their businesses with care to avoid a sustained decline in business. Your employees want to keep their jobs and you want to grow the business – make sure you have identified what issues can blindside you in the coming months and determine the solution.
About the Author