Adapt to the new business reality and standards during the coronavirus outbreak
Yet again humanity is being called on the frontline not only to preserve its current standards and lifestyle but now also its survival. This time around we face an “invisible enemy” which shattered the idea that humanity is above all and everything. Little did we know… Through this coronavirus outbreak we witness every aspect of human life changing and the business dimension is equally being affected. Will only the fittest survive this turmoil? Will local, small-size business rise to the top?
Most successful businesses will strive to maintain their current levels of operation; however this can prove to be quite the challenge. Adaptability plays a key role considering the current outbreak. It is essential that businesses as a first and foremost rule prioritise safety both for their professional personnel as well as for their clients. It must be noted, that as a very first step businesses are required to comply with any governmental guidance which usually can serve as a preliminary baseline. Afterwards they can tailor the details of a policy that aims to the ‘safety over everything else’ whilst maintaining business continuity in the expected standards. Of course, the abovementioned will require constant revision and updating. As a result of the current outbreak, on one hand heavier reliance is set on the State for guidance from the private sector. On the other hand, the State will have higher expectations for compliance from the private sector. Simply put, it would be a vice-versa relationship.
Examples of State assistance include exemption of social insurance payments and rental payments. Businesses affected by the outbreak should seek advice from their governments on how to proceed accordingly.
Another important aspect during this on-going crisis is the continuous engagement between personnel and client base. In relation to the former there are a few steps that must be ensured. Constant communication within the workplace between employer and employees as well as within the business already established hierarchy is of paramount importance. Any concerns and requests that the personnel may have, must be reasonably met. Additionally, engagement amongst all levels of the business structure must be ensured with the aim of business continuity and high level functioning. Some potential adjustments that can be made within the business can be initiated such as extending flexible working hours, provision of auxiliaries so that the personnel may work in a safe environment, etc. This calls for proper management since personnel teams will require coordination, as well as allocation of resources and establishment of wellbeing programs. Workforce disruptions are bound to happen in some businesses and where distant telecommunication with clients is the safest option, it has to be chosen over face-to-face meetings (direct engagement).
Business Strategies to navigate the outbreak
Business disruption has been very common throughout this pandemic. Supply chains for example appear handicapped and in combination with consumer demands facing unprecedented demands in certain sectors, scrutiny may prove paramount. Companies will want to monitor short-term cash flow as a way of ensuring predictability. Additionally, micromanagement will require strict discipline and closely monitoring of inventory management. Due to safety concerns, businesses will want to remain in constant communication with suppliers. Moreover, assessment of financial and operational risks will require swift response. Failing to do so may prove fatal in the long run. Another suggestion could be renegotiation with relevant parties so as to ensure proper all-around business function. In order to achieve the latter, businesses are encouraged to show sympathy to various hardships and difficulties the parties may be facing. Operational continuity is essential and businesses may wish to explore alternative supply chain routes with safety as the number one concern.
Stress-testing of financial plans should be attempted where possible. Various scenarios may require exploration due to the unique nature of this on-going disruption. Understanding and analysing the impact of potential plans on financial performance will give the businesses more options to manoeuvre. One example can be to place focus on alternate routes available on sectors adversely affected by the crisis. Additionally, all operating costs can be reviewed in an attempt to slow down any non-essential costs. Through this method businesses can determine how this crisis will affect each business plan and the budget available. Moving forward businesses are encouraged to explore near-future capital raise through credit support from banks and investors or support schemes set up by governments.
Communication with stakeholders (:customers, employees, suppliers, creditors, investors and regulatory authorities) in a timely and transparent manner is of utmost importance. This can provide space for reshaping businesses towards more safety and security through bilateral agreements. Special care should be paid towards potential contract clauses especially those that can be invoked as force majeure or “acts of God”.
Utilising in full any governmental subsidies and support programs is also greatly encouraged. Many developed countries have moved forward with easements in relation to tax, finance and social insurance policies. Businesses should be up-to-date with governmental schemes and whether they fall within the ambit of the schemes which can provide some short term relief.
Lastly, as part of a business strategy, businesses should prepare for the new norm that will follow after the outbreak is contained. In summary, a threefold plan has to be implemented: preparation and execution of the abovementioned should be done swiftly whilst maintaining alterative financial plans with constant communication with stakeholders. This includes keeping up to date with the new regulations, norms, governmental guidelines and propositions Readiness is important in identifying and applying alternative business methods in light of the consequences of the current crisis.
Life after the outbreak
Once the outbreak is contained, businesses will wish to review their performance based on the revised business models that they have applied. With business continuity as the primary objective any deficiencies must be closely re-evaluated. Moreover, new guidelines may be introduced internally so as to provide a more resilient business structure that can be better prepared for any future crises. After all victory loves preparation.
Conclusively, it is possible that we are witnessing a major shift in business interactions. Mainly stemming from the way supply chains are being handled all the way to the service receivers. On an ending note, businesses can use this opportunity to evaluate where and how their business structure needs strengthening.