Coronavirus related disruption is a challenging time for all businesses, and especially for business leaders. Now is the time to review the short term and rethink longer-term strategies for an emerging future before your competition beats you to the punch. While it can be helpful to do this with guidance from a business mentor, even conducting a review on your own can be beneficial. Business survival is up for grabs, as are the future opportunities that will present themselves for those ready to succeed.
Business leaders should review the following critical strategic business areas during COVID-19:
- Address immediate challenges or major issues to workforce, customers, operations, technology and business partners
- Communicate factually and effectively to all key stakeholders
- Take the pulse of your customers
- Strengthen your relationships, support them and communicate factually and listen
- Fix any immediate issues
- Think how long-term shifts in core markets or business will impact your customers, what you offer and how to best position the business now and in the future
- Fix short-term cashflow and funding issues
- Protect revenue and financial performance with faster scenario planning and regular financial modelling to guide actions
- Create fast start-back plans to get volume up and running and lock in any gains
- Consider funding needs in the short, medium and longer term and seek funding as appropriate
- Your people
- Move faster with digital change and ensure that your business’ IT is capable of supporting your remote workforce, and all business-critical systems and your people have sufficient digital training and skills to work in this environment
- Review any global mobility issues, travel rules, social distancing and virus prevention practices, first-aid plans and HR policies
- Re-assess remote working strategy, including need to stop work or work remotely or relocate individuals
- Consider a business mentor or coach for your key people
- Supply chain
- Review supply chains for short-term and long-term sustainability during the pandemic
- Find alternative supply chain scenarios
- Adapt allocations to customers and pricing strategies to reflect changes and limitations as well as long-term customer relationships
- Comply with government requirements in individual countries and local areas
- Get to grips with how regulatory and competitive dynamics will change and impact the business
- Strategy Review
- Consider how to improve resilience to further shutdowns with contingency planning to cover such disruptions
- Ask what is the new normal and how can you adapt your strategy to it?
- Completely review medium and long-term strategy given the above factors
- Involve your people, customers, operations, sales and marketing, IT, suppliers and funders in researching your strategy
- Consider business mentoring or coaching to assist you in your strategy review
General Areas Likely to Change After the Crisis, Impacting Strategy
Businesses will realise that working remotely has worked well during the crisis lock downs, and the demand for large rented offices will likely drop sharply with more remote working in the future and more meetings and presentations held online. This will not be good for the commercial property market, as businesses will demand less space and may move more to shared business spaces and flexible space use.
After the crisis, there is likely to be fewer large department stores, with more online shopping and perhaps smaller retail footprints, and innovative mixed retailing and services evolving quickly. Retailers may partner further with more exotic services such as celebrity chefs, artists, opinion formers, bakers, authors and other well recognised brands offering a mixed service and retail experience. This will aim at improving brand awareness, particularly with those highly attractive online and wider audiences. Values such as business ethics or traceability of product origins and method of production may gain traction. This may arise as the current crisis has focused many people on the right things to be done. Unique and ethical products or services and their fresh brands will attract more customers, especially among the younger demographics. Collaboration between people has clearly increased during the crisis, and this collaboration will translate back into workplaces and across supply chains in the future.
Customers, particularly the middle aged and baby boomers, have also moved further into the online shopping space during the crisis, and this trend should continue. This is clearly the time to target these age groups with new online offerings of products and services. This move online will reduce both the need for retail premise space and the need to stock the past levels of product in retail premises.
Supply chains for all companies, organisations and countries that rely completely on China or any other single geographical source must re-consider their risk exposure and widen and deepen their future supply chains so they can cope if another pandemic strikes. Businesses should consider how best to support their specific supplier chains in the likelihood of future crisis events and collaborate with them in contingency planning and to solidify the business relationships.
Financial dynamics may have to be proactively re-engineered to reduce fixed overheads of businesses to reduce their financial risk in future crisis downturns. Such adaptation will favour flexible businesses with a history and mindset for lower organisation structures. To succeed in making such changes, business leaders will need to be flexible and develop more efficient work practices. This will need to be combined with developing and retaining good business knowledge, leadership, and understanding of how to maximise cooperation and get results. A well-matched business mentor or coach can help you and your business to adapt.
The Impact of Technology During the Pandemic
Technology has facilitated business, education, government, religious communities, membership organisations, and social interaction to a much greater extent than before the COVID-19 crisis, and communication technology take up will continue in the years to come. This has removed any stigma over working from home and will increase the use of remote meetings. The travel industry may face significantly lower business travel in the future, as businesses will now better appreciate the cost benefit of online meeting platforms to bring people together effectively and at short notice at low cost. Also, many of the travelling public may continue to avoid travel after the crisis as they realign their priorities and repair their own personal balance sheets. It is likely that the online travel industry will flourish further than those in bricks and mortar, who may well decline.
Technology in education has stepped into the pandemic breach and will no doubt play an increased role at all levels in educating future generations. This will further disrupt the roles of educators and change cost structures in education. This shift will suit most students in our educational institutions today who are from Generation Z, a generation that has grown up in a globalised world and are technology natives. This generation, the oldest of whom are now 25 years old, will have reflected on the impact on their education of this global pandemic. Many of them will face cancelled exams, sporting events and even graduations. This generation seems strongly defined by their technology environment, where the terms FOBA (Fear of Being Alone) and FOMO (Fear of Missing Out) express their expectation of instant communication and feedback – effected through apps like Messenger, Snapchat and WhatsApp.
Generation Z values greatly the power of working collaboratively to communicate socially and also to solve educational problems and mega challenges such as climate change and mental health. They also have a collective responsibility to self-isolate to protect older members of the community.
The technology environment dominance now includes not just students, but also older generations, and their parents and educators. This has been amplified with the current shift to remote learning and remote working.
All areas of service will move further online after they have realigned their service delivery during the crisis. This will range from lawyers, accountants and management consultants to medical advice, building services, food delivery, religions, clubs, music performances, training and education, and more.
Other Significant Business Trends After the COVID-19 Crisis
The danger with world trade is that countries may revert to import substitution and higher tariffs to protect their domestic industries. This would reduce the potential GDP growth from trade worldwide, leading to significant inefficiencies at a much higher cost with lower choice for consumers.
Levels of aid budgets may not be renewed as governments struggle with reducing debt and re-balancing their own budgets. As a result, countries and organisations dependent on government funding may find they are no longer able to be funded. The same reduction in contributions will be true for funding that is traditionally provided by individuals who have faced the economic consequences of the COVID-19 fallout. There may be a renewed focus by communities and governments to prefer to fund local charities and organisations to help their own people before providing aid overseas.
Changes to Saving and Investment Behaviour
Many individuals and businesses will reconsider their need for cash buffers and investment risks in the future, and net saving rates will rise. This will reduce levels of consumption and increase the demand for investments.
Innovation and Growth Areas
The crisis has encouraged innovation, and the new economic turmoil will throw up many new opportunities, with whole industries being disrupted. The potentially lower and higher value of real assets and companies themselves will also open up more opportunities for takeovers, start-ups and mergers.
There will also be a marked contraction in smaller businesses that will not survive the crisis, and a tendency for the significantly larger and well-funded organisations to grow as a result and solidify their market shares. Pressure to win business in shrinking or no-growth market sectors will further reduce profitability and marginalise more businesses.
All organisations should look at how they have coped during the crisis and adopt positive changes to organisation dynamics, improved service delivery, sales, operational efficiency and cost structures as a result.
Broadly, governments at all levels should urgently review what has happened during the crisis to discover what improvements can be implemented quickly to improve resilience against such events in the future. They may also look at permanently streamlining resources and focusing services to improve the cost vs. benefit of the services they deliver.
In general, taxation will no doubt increase, at least in the short to medium term, to cover the much higher debt levels of governments. Governments should also look at what efficiency gains they can implement to reduce the cost of government and roll back any such short-term tax increases.
Employment will be forcibly restructured in many areas where business has failed or has significantly lower revenues or activity levels. This will lead to much higher unemployment rates than in the last 2 decades. This in turn will put pressure on the government’s debt to fund the higher unemployment, making paying back the significantly higher borrowing to fight the crisis much harder.
In conclusion, all business leaders should critically review their short-term and long-term business strategy on a regular basis to reduce risk and plan for the optimal future. You should do this even if the future is unclear, as stepping towards a new approach is going to clarify your thinking and harness your key people so you can proactively approach the future.
Contact International Business Mentors to find out how business mentoring or coaching can assist you with fresh eyes to review your current strategy and give you confidential support in these turbulent times.
About the Author
David Cartney is a well-qualified business mentor with 30 years experience in directing and managing businesses and in training mentors. David Cartney is a Council Member of ICMA.
With 20 years experience as an independent and non-executive board director and chairman, strong commercial acumen, corporate governance training and practical experience his objectives are to continue to add value as a business mentor and a board member to facilitating performance, develop individuals, improve performance, strengthening decision-making, leadership, board governance & risk management.
David has developed methodologies in our business mentoring processes and trains the business mentors for International Business Mentors. He is also an author and has books published including – improving performance cultures The Corporate Wolf Pack on Lulu publishing and Strategic Financial Analysis & Cashflow for Company Directors
David Cartney is a fellow of the Institute of Certified Management Accountants (ICMA), and Australian Institute of Company Directors (AICD) and has the directors` diploma, is a past contributor to the advanced directors diploma development or Mastery in the Boardroom, and a member of the Institute of Directors in London (IOD).
David has a Masters Degree from St. Andrews University, Scotland the home of golf, a Postgraduate from Heriot Watt University in Edinburgh Scotland and PhD in Finance from Ashley University in the USA. He is a Chartered Accountant in Scotland and Australia, a fellow of the CPAs in Australia, Fellow of the CMA and a member of Family Business Australia with experience in his family`s businesses in farming and to some extent in fishing.
Although, David now calls Australia home he still travels and has business experience in London, New York, Chicago, Toronto, Paris, Dublin, Rome, Edinburgh, Auckland and a few Pacific countries. Furthermore, he keeps in touch with our business mentors to assist in their development and delivery of their mentoring skills and service.
David also finds time to write and deliver business presentations and publish business books for Thomson Reuters. These are aimed at improving the strategic decision-making and financial skills of people in all organizations.
You can reach David via his website International Business Mentors.