For the last couple of months most businesses have been rightly focused on surviving the impacts of the COVID-19 pandemic but now it’s time to go beyond survival. For businesses to not only survive, but also revive, drive, and thrive in the post-COVID world, they need to take action and make changes in a number of key areas. Here are seven questions to help businesses get ready for the next phases of this pandemic:
This pandemic has and will continue to decimate channels to market. Retailers, restaurants, financial advisors, insurance agents, wholesalers, distributors, dealers, and value added resellers are all at risk of going bankrupt. Even major national and international chains and widely recognized brands and operations are at risk. Of the companies that do survive, many will return in a much smaller and more constrained way. Businesses that rely on third-party channel partners to go to market can’t assume that their old channel partners will revive and business will go on as before. They need to analyze and restructure their channels now.
Direct to customer and online sales and fulfillment channels need to be established immediately. A detailed analysis of current channel partners assessing both their value and financial viability needs to be conducted. An assessment of which partners will disappear and which the company needs to acquire or support financially to ensure their survival needs to be developed. Product inventory that is already in the channel needs to be cleared in a way that won’t negatively impact new sales. New channel partnerships with the companies that are most likely to thrive in the new post-COVID world need to be negotiated and established.
One thing we have learned from all of this is that just-in-time global supply chains are way more fragile than local, high inventory ones. Even companies that have seen increased demand during the pandemic haven’t been able to benefit because getting products manufactured and shipped during a global pandemic, or even a localized epidemic, has been close to impossible.
Companies that rely on outsourced or offshore manufacturing need to therefore analyze and restructure their supply chains now. Nearshore and onshore manufacturing needs to be established. Inventory levels need to be right sized at levels able to handle future waves of infection and suppression. And even those companies that already manufacture locally need to ensure the availability of raw materials.
An organization’s biggest and most important asset are its people. Retaining the employees that know your business and that can help you survive, revive, drive and thrive is a critical success factor for recovery. Key to that retention will be keeping them engaged, loyal, and motivated while many of them are working from home and others are at risk of getting sick or worried about being laid-off. How will you protect them? How will you stay connected with them? How will you incent, measure, manage, and reward them?
All companies need to develop comprehensive remote employee communication, engagement, management, and leadership strategies, procedures, and programs immediately. If they don’t, they risk losing their best people to the companies that do.
Most companies will need to identify and make a multitude of changes to their facilities, policies, systems, and processes for employees to return to work safely. Maintaining social distancing in open plan offices, stairwells, elevators, meeting rooms, restrooms, warehouses, factory floors etc. will be extremely difficult.
Personal Protective Equipment (PPE) will need to be sourced, stored, distributed to employees, and safely disposed of after use. New procedures will need to be implemented for cleaning and sanitizing shared work areas and resources. New systems to support electronic signatures and secure remote operations, management, oversight and support will need to be established. Longer term leases will likely need to be renegotiated, office and assembly line layouts re-planned and re-engineered, and business continuity and security plans refreshed.
The economic shock from both the pandemic and the suppression necessary to flatten the curve will mean that many customers will be unable to pay their bills. All companies need to be assessing their existing AR and customers, building their bad debt reserves, and planning for a cash shortfall. Impacts to cash flow need to be analyzed, lines of credit established, expenses reduced, and budgets re-planned based on new revenue and AR assumptions.
Whether we like it or not, the pandemic has resulted in many changes. Some of those changes are temporary and life will return to normal once the pandemic has passed. Others though, like the move towards online retail, increased acceptance of working from home, reductions in daily commuting, and the loss of many different businesses and customers will be with us forever. As a result, even after a full recovery from the pandemic, some revenue streams will never return.
Businesses need to analyze their revenue streams and objectively determine which customers are likely to disappear or reduce their spend, and which products and services are likely to generate reduced revenues long term. Then, they need to either identify alternative revenue streams and pivot their organizations towards them, or rightsize their organizations to match the new reduced revenue expectations.
Your competitors are in the same ocean as you, but their boat may be far more or far less seaworthy. Which of your competitors are likely to go bankrupt and which are likely to thrive? Are there opportunities for you to steal customers from weakened competitors or are your customers vulnerable to being stolen from you? Will you see new competitors entering your markets as they sense an opportunity or seek replacement revenue streams? Will increased competition and/or reduced demand drive lower prices and margins? Should you consider merging, acquiring, or partnering with a competitor to increase the likelihood of your mutual survival? Should you enter new adjacent markets or combine forces with a supplier or customer to attack markets together?
Companies need to conduct comprehensive competitive analyses and develop aggressive competitive strategies now in order to thrive in the future.