Now that we just over a year into the biggest collective business crisis of our generation, it is a good time to reflect on the lessons that business owners can learn from it, and how best to implement strategies based on these insights, says Jeremy Lang, regional general manager at Business Partners Limited.
Having battled in the frontlines since the start of the crisis in March, Jeremy has seen the full range of reactions by all sorts of businesses to the COVID-19 pandemic and the lockdown, and has reflected on the reasons why some businesses proved more resilient than others, even within the same industry and region.
The importance of sound information:
In the fog of the crisis, reliable information became vital to business survival. Business owners who had cultivated solid sources of information, including news organisations, business associations and carefully selected individuals within their networks, were able to withstand the considerable misinformation polluting social media. This enabled calm and accurate planning. In contrast, many business owners who lacked good information were prone to panic decisions and paralysis.
Business owners with good sources of information have also been in the best position to see and evaluate new business opportunities arising from the pandemic.
The dangers of comfort zones:
The pandemic has proven that nothing is absolutely certain. Businesses that found themselves deepest into their comfort zones had the most trouble adapting to the crisis. This does not mean that business owners must live in constant fear of calamity, but only that a minimum level of awareness and readiness for unexpected setbacks is healthy. Businesses with basic contingency plans have proven to be much more robust than those without.
The importance of agility:
How fast a business could adapt; to working from home, to new forms of client interaction, to introducing new products and services and new forms of marketing was a key ingredient to survival. Agility is a function of mind set, business culture, planning and information sourcing, and is equally important for spotting new opportunities as it is for weathering crises.
The importance of sound leadership:
Businesses with strong leadership from its owners coped much better than those adrift on the stormy sea. Leadership includes having a clear and agile strategy, good communication of the strategy throughout the whole organisation, decisive decision making and the building of a strong team around the strategy. An important part of crisis leadership is setting a tone of calm firmness – not to be confused with complacency – to avoid panic and despair.
The importance of staying abreast of technology:
Any lack of investment in information technology was sorely felt by businesses as the lockdown hit. Users of well-developed IT systems and web-based processes found it relatively easy to adapt to work-from-home practices and remote communication with clients, and avoided a scramble to set up modern systems and to train up staff to use them.
The importance of strong talent management:
The crises certainly exposed weaknesses in many businesses’ human resources management systems. Working from home meant many staff members had to cope without direct supervision. It is therefore no surprise that businesses that cultivated a self-motivational, autonomous work ethic and smart ways of measuring performance and productivity coped much better.
The importance of contingency resources:
If ever there was a time to dip into a rainy-day fund it is now. The importance of contingency planning is closely linked to the lesson above about being ready for unexpected setbacks. Contingency planning can go beyond just having an emergency fund. It can include an emergency line of credit and a good relationship with potential investors.
Armed with these lessons, business owners can look to the year ahead, and prioritise the following aspects of their businesses:
- Budget and plan: If you haven’t set up a budgeting and planning system for your business yet, you need one urgently. The uncertainty around how long the pandemic will last, when we will have a vaccine and whether we will suffer a significant second or third wave is no reason not to have a plan. In fact, it is exactly because of the uncertainty that you need a plan more than ever. Planning forces you to think through different scenarios. It guides your team, and it allows you to change strategy and re-plan with agility when circumstances change.
- Adapt to a reduced economy: Economic activity has not stopped, but it certainly has reduced for a great number of industries. You must adjust your operations and your cost structures to fit the new reality.
- Review the market and your strategy within it: The landscape has changed, even though we don’t quite know to what extent and how permanent the changes are. Every business owner must focus more intensely than usual on the question of whether their business model is still relevant in the changed market. It is an ongoing process that will require constant study. Are there new markets that you can try with your existing products and services, or new products and services that you can sell to your existing clients, or new products and services to new markets?
- Increase your online presence: The crisis has boosted the move to ecommerce and social media marketing. If you haven’t fully explored these aspects of your business, you have your work cut out for you in the year ahead.
- Smarter, more targeted marketing: A combination of tight budgets and the dominance of social media means that you must devise more precise marketing strategies. For now, broad shot-gun marketing campaigns need to take a back seat.
- Customer service: The importance of excellent customer services cannot be overstated. Under these market conditions, there will be very little tolerance for customer neglect.
- Watch out for the opportunities: Every time the market changes, new business opportunities arise, even though the change itself feels chaotic and painful. The direct business opportunities stemming from the pandemic such as protective equipment and medical equipment and services are only the tip of the iceberg. Many of the opportunities that will arise are not quite definable yet apart from broad trends such as increased demand for logistics and delivery services due to the rise of ecommerce. Watchful entrepreneurs who keep in touch with these trends are best placed to capitalise on them. And don’t neglect to look beyond the borders of South Africa as well.
By Jeremy Lang, Regional General Manager at Business Partners Limited. Visit: www.businesspartners.co.za