Business as unusual is the new way of doing business. Corona virus pandemic can be noted as the ‘blackswan’ event (A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences) ; but in a world of VUCA (Volatility, Uncertainty, Complexity and Ambiguity), events such as these could justify the new normal.
Over a Million people are tested positive for Covid19. Over seven billion people are gripped in the Corona Fear. We are witnessing the viral spread of fear that is definitively damaging local businesses, national economies, global supply chains and global markets.
Corona is a disruptor. Small businesses will take the hardest hit and many will soon be compelled to close down. Many jobs will be lost and many will have salary losses of unpaid leaves. Yet there are many ways we can thrive in these challenging times. If you are business owner or someone leading an enterprise, take a note of the following tips.
1. TAKE TOTAL CONTROL OF THE SITUATION
Lockdown is not a vacation for business owners. Consider this lockdown like the ‘pupa stage’ in a butterfly’s life cycle where it is encased in a chrysalis and undergoing metamorphosis. Hopefully use this time of shutdown to make the right transformation for your business. Good time makes us party but bad times make us ponder. It’s time for serious reflection, thinking and strategy.
Take control of the situation and make the right assessment of the potential damages, profit loss and possible debts likely to be incurred in your business. Discuss strategies, ideas and suggestions from everyone in your company to stay afloat. As a leader your job is to create certainty during uncertain times. You need to lead from the front and assess multiple situations with the help everyone on board to redesign and execute a strategy that will work on your advantage.
During crisis management you anticipate unfavorable business scenarios and you arm yourself before the crisis even happens. Very few companies are equipped in this and Shell crisis management scenario is a prime example. For those who aren’t prepared for the crisis must spend time alone and virtually with the team to handle possible scenario outcomes from pandemics such as these to discuss its impact on sales, revenue, jobs, operation expenditures and so on. As a business owner or leader you can’t afford to lose the perspectives. Everybody is counting on you. Here perspective means a new approach to handle challenges and achieve goals effectively.
Manage risk effectively. Use the help of experts and advisors to enable you to understand the implications of various risks and blind spots. Be armed with effective strategies that can be implemented at various stages.
You may not have a complete control on your circumstances ie market conditions, govt. regulations, customer spending habits and so on, but you can have total control over internal conditions ie your mindset, the mood at work and the enthusiasm towards sales and so on. Business and consumer markets also run on sentiments and emotions. Negativity and paranoia is good only to the extent to push people to take action. Certain crises are hidden opportunities to reinvent your business, business model, revenue structure and operation model. It’s also time to do more with less. It’s no more an option. It has become the compulsion.
2. FINANCIAL CONTROL
Situations such as these can create financial challenges to a company at various levels. It will hit the balance sheet, vendor payment outstanding, collectibles, salaries and other expenditures. Companies that operate on high operation costs (higher rent, salary etc) will take a major hit during lock down. For example a company that is operating on 95% operation costs including taxes and a net margin of 5% will take 19 months of revenue to compensate for the loss made in one month. This is going to be a tough decision for sustenance especially for those companies that were surviving on a month to month basis-making both ends meet.
Cash is king in any economic crisis. The value of money increases. Avoid wasteful spending. Focus on the core expenditures. Scrap bonuses and incentive schemes. Even before the pandemic, few companies in certain sectors (in India) have already reduced staff salary into half. Many retail sectors have renegotiated and implemented commercial rent reduction into almost half. In a swim or sink situation, in order to stay afloat certain companies have already done major cost cut across various departments and verticals.
3. REMOTE WORKING
Most organizations will learn that they can leverage technology much more effectively to operate remotely and conduct business. Almost all large and medium enterprises especially IT sectors have resorted to remote working (work from home) option during this lock down. There are many virtual office collaboration technology tools available for free that small and medium enterprises can use to work remotely. Enterprises such as www.larksuite.comprovide online collaboration between teams to design and implement tasks and projects. Remote work tech tools Slack and Zoom are effective for communication.
It’s imperative to train employees to be effective on remote working without hampering the work life balance. Remote working requires a life style change of energy management and time management.
Many businesses are replacing humans due to the rise of AI, drones and digital assistants. Business models are getting reinvented in their value creation and delivery to stay ahead of the competition. Companies must adapt to digital transformation including marketing automation and other tech driven sales mechanisms.
Businesses that heavily depend on offline model for product delivery and service must look at online options to serve their customers.The trend is that – digital companies that support the digital environment are gaining more advantage when there are more business queries directed to them as opposed to the physical ones. Now is the time to figure out what processes, assets, products or services you (or your company) currently implement in an analog fashion and figure out how to digitize them. Once you digitize them, go on to dematerialize, demonetize and democratize your products and services. Think how print media is replaced by digital publishing, Google digitized library, Zoom digitized in person meetings.
4. STRATEGIC AGILITY
The velocity of change is faster that what many companies are prepared to implement.
The agility to form new ideas and execute them for short term and long advantage is the key here. You can’t afford to implement change initiatives at slow speed. We have reached a tipping point of what Bill Gates once called ‘business at the speed of thought’. Businesses that struggle with execution delays have the highest disadvantage. This doesn’t mean that you jump into something because it’s just trendy. Market fluctuations create challenges and opportunities on the short term and long term. Making bold bets after doing due diligence is the key here. Often the strategies will look great in PowerPoint and the vision look grandeur on a website or memo, but communicating them with the team, getting their collective buy in and faster execution results in producing the expected outcomes.
Leaders must posses the vision to drive the business forward amidst challenges. The right team must be equipped to not only do the damage control but to drive productive outcomes and results.
Sometimes you have to throw away the old rulebook when the rules of the game have changed. Strategies that were made for stable times will not work for volatile times.
Corona fear and pandemic will change the way we do business in the post corona times. Few sustainable business models like online retail and door delivery has taught many businesses what strategies they must adapt when offline businesses suffer.
5. FIND NEW OPPORTUNITIES
Corona pandemic has paved to new challenges and opportunities. Even though utmost focus must be on protecting the core businesses and core revenues, it’s also time to tap into new opportunities such as the acquisition of distressed businesses that are likely to have a future. There will be a rise in cash strapped businesses that struggle to exist. If it’s a strategic fit for your current businesses, it’s worth venturing through acquisition and strategic partnerships.
Companies that are struggling have to make minimalistic and simplistic choices to revamp their portfolio. You can’t afford to hold on to businesses that are making losses. You may have to ditch your legacy business model (what you have been following for years) and pivot into a more profitable niche.
Time has come when the Darwinian model of ‘survival of the fittest’ will rhyme as a business dictum. This teaches us that the fittest are not the strongest with the highest cash reserve or resources at their disposal- the fittest are the ones that can adapt faster. Seize the days ahead. Cash in on new opportunities. Stop whining. Stop blaming. Stop complaining. Take charge. Think straight. Inspire and thrive.