Although there’s much uncertainty in our world currently courtesy of the major disruption to our lives from the coronavirus pandemic, there are things you can do to prepare yourself and your company for a post-coronavirus recession. While the unknowns surrounding the economic impact of the virus are immense, there are measures every company can take now to prepare to thrive in a post-coronavirus world.
1. Get a Grip on Financial Numbers
In order for your organisation to act appropriately and neither overreact or underreact, it’s important to have performance monitoring systems to understand your current financial health and cash flow. Since running out of cash is still one of the biggest killers of companies, those that have effective ways to monitor and forecast cash flow, revenue, costs, and more are those that are in the best position to survive a post-coronavirus recession. This is something I have helped companies create for the past two decades, and it’s so important to have these tools; but, . . .
2. Get a Grip on Data
As important as it is to have a firm understanding of your company’s financial position, you must also understand market trends, customer needs, operational challenges, issues around talent, and more. This data will inform everything else you need to do. Every organisation needs to develop a data strategy that identifies what data is needed and how it will be used to answer the most critical business questions you face.
3. Focus Relentlessly on What Really Matters
Do you have a strategic plan that is concise and accessible? While the answer needs to be “yes” all the time, it’s particularly critical in a post-coronavirus recession. This Plan on a Page, yes, ONE page, helps your team focus on delivering to your customers and stop doing things that aren’t essential to this plan. Simplicity is key.
4. Build Multiple Revenue Streams
The more channels, such as between digital and physical, that you can operate in or the more revenue streams your organisation has, the more resilient you will generally be in a recession. COVID-19 forced many organisations to operate in new channels—educational institutions adopted virtual learning, in-person events became 100 percent digital, restaurants were only able to offer take-out and delivery, and more. Those who already had a digital framework to plug into such as restaurants offering customers a seamless online ordering experience were much less affected. When you have a “multichannel sales strategy,” your customers can interact and purchase from your business in multiple ways—and in a way that is more comfortable to them.
5. Build Strong Customer Relationships and Experiences
Recessions hit companies hard. In fact, almost one-fifth of companies didn’t survive the last three global recessions. While it always makes good business sense to be customer-focused, when you are preparing your company for a post-coronavirus recession, it’s imperative that you get closer to customers across multiple channels, especially in your online marketing. Build on data-driven insights (experiential data is quite important) to determine how your business can be indispensable in your customers’ lives. When entering or in a recession, work closely with your customers and be adaptable to their needs; respond to their need for value propositions tailor-made for a recession. Improving your customer experience is always a competitive differentiator for businesses, whether in a recession or not, and having solid CRM practises is crucial.
6. Review Processes and Try to Reduce Costs
Now is the time to really evaluate operations and processes to find efficiencies and trim costs wherever possible. Focus your efforts first on trying to improve efficiency where it really matters—the biggest and most time-consuming or expensive processes. When you put in this planning time to identify where you could achieve improvements in efficiency and effectiveness as well as determine the “biggest bang for your buck” you will be in a stronger position heading into a post-coronavirus recession.
7. Review Supply Chains
In a high-uncertainty environment, the resiliency of a company’s supply chain becomes quite important. Just as British companies needed to evaluate supply chains in preparation for Brexit, it’s time for companies in all industries to consider how to reinforce supply chains and alter processes in order to recover from the economic damage done by COVID-19. It is expected that many sectors will experience structural transformations in response to the coronavirus that will impact existing supply partners and paves the way for new collaborations.
8. Fast-Track Automation
Automation historically happens in bursts, especially during challenging times, such as a recession when a human workforce is deemed relatively expensive in an environment of declining revenues. The focus on automation and digitisation will only be accelerated after this pandemic because businesses that are fully automated are less likely to be impacted by renewed outbreaks or the next pandemic. I already use automated delivery robots to reduce the risk of infection when visiting busy shops, but in addition to delivery bots, other businesses will fast-track automation when revenues are tight.
9. Flexible Workforce
Organisations that are able to scale up and down as needed by using freelancers, independent contractors, and temporary workers are better able to withstand economic downturns. Having access to a flexible workforce makes a company more agile and responsive and, therefore, capable of getting back on track financially faster in a post-coronavirus world.
10. Establish a Strong Employment Value Proposition
And while you are being cognisant of what tasks and projects should be outsourced to your trusted gig-economy partners, it’s important to build an employer brand as a firm that top talent would be attracted to. When your firm is known as a great place to work, it will not only be able to keep high-performers already employed but will also be helpful to recruit the best when it’s time to scale up.
11. BONUS: Invest to Support Growth
Now’s the time for healthy businesses to take advantage of borrowing money cheaply to invest in new areas or acquire other businesses to support future growth. This proactiveness now will pay dividends in the future.