Most experts agree that post COVID, it is going to take some time to restore the economic prosperity, growth and productivity that we have previously enjoyed.
Some estimate up to two years to recover to pre COVID levels, others are less optimistic.
Even the most highly successful businesses are facing disruptive change that is resulting in closures and lay-offs. But whatever the future, now is the time to look at your strategy and try to extract whatever positive learnings you can from the impact of COVID.
Businesses will need to be adaptable to meet the New World Order and be willing to speedily identify and implement new models and ways of working. Some businesses will simply not be able to survive – and as always, there will be winners and losers.
Now is the time to explore and develop new business models that are appropriate to meet whatever the “new normal” will look like.
So who will be the winners in what has been described as a “new world economic order?”
Not surprisingly, it is the most adaptable that will win out. Not necessarily the strongest, biggest or most well-known, but those that can adapt to, and then take advantage of, new market conditions.
So how can a business adapt to operate in this new world order?
Well, there are no easy answers, but here are seven considerations that might help you embrace a post COVID world.
1 Engage customers early on with Design Thinking – Developing a deep understanding of the needs of your customer will be even more vital to ensure that your product or service does not become irrelevant or is substituted by a more appropriate product that more accurately fits the “new need.”
The law of unintended consequence most certainly applies here as businesses see their customer base look to new forms of fulfilment to meet changing requirements. Customers already have, and will increasingly, change behaviours and working practices as their own operations flex, or their lives change.
If we don’t understand these changes, then as suppliers we will simply be left behind. Engaging with customers at the beginning of developing something new is vital in order to understand how the world is changing, via a “discovery” approach to uncover those changes. Translating that understanding into your strategy is not always easy, but discovering an understanding of the real need will help design the best solution.
How will COVID change the world as business knows it?
2 Client interactions – Finding and retaining clients when there is so much noise and clamour in the marketplace is difficult. Traditional relationships and ways of interacting may be compromised. Personal relationships with your clients may be challenged as we see increasing commoditisation of goods and services and on-line procurement grow even more swiftly.
From sales through to manufacture and delivery, understanding your client’s requirements for products and services that are provided and delivered competitively but “safely” will be vital. New communication, marketing and sales strategies combined with a good understanding of the psychology and workings of the buyer will be required to get traction in new increasingly competitive environments to create “new interactions” and new client relationships.
3 Staffing and skills – Having the right staff with the right skills has always been important. However, the development of a clear skills and recruitment strategy that matches the changing needs of your business and your clients will help avoid damaging skills gaps appearing. It is expected that unemployment will soar but key skills will still be in short supply. How can a business find, train and then retain the right people with the right skills? A short, medium and long-term plan should help avoid over dependency on key individuals, develop the opportunity for internal progression and give the opportunity to introduce new thinking into the business.
4 A safe place to work – One positive learning from COVID has been the need to understand some of the wider issues associated with staff, not only risk management, social distancing and how people work, but also a real focus on mental health and welfare. Whether there is a real need for the daily commute to work has really been brought into focus, and implementing the lessons learned in lockdown about remote/flexible/agile working practices will not only help businesses recruit and retain staff in the future, but offer major environmental benefits. The government seems committed to capturing any low carbon benefits that have arisen from COVID and net Carbon zero is still the objective.
5 ICT tools, resources and working practices – In recent years, ICT has seen a major migration towards cloud based services, and those businesses who have adopted this strategy will have possibly seen less disruption from lockdown than others. Developing resilience planning scenarios, new working practices and workplace collaboration applications, as well as data storage and access strategies, and new client and staff communication and engagement tools, will be important to capitalise on the learnings from this current challenge.
6 Product and Service Repurposing and finding new markets – Incidents of businesses with single product, single client models are all too frequent, particularly with smaller early stage SMEs.
These businesses are perhaps the most exposed of all at this current time. Exploring how products and services can be repackaged and repurposed to address untapped markets in order to diversify a client base will reap dividends for those businesses able and willing to step outside their traditional thinking.
Entering new markets with existing but modified, repackaged or redesigned products can significantly help reduce dependencies and improve margins. Effort into finding new markets with existing products, particularly new international markets, should be made. For organisations with international aspirations, COVID has changed the rules regarding the costs and strategies of finding new clients. I have seen even those challenging, yet potentially lucrative, markets, like South Korea, more open to adopt cultural change and be ready to move away from traditional face-to-face methods of engagement in favour of electronic interaction.
In the diagram below, skilful migration from Box 1 to Box 2 could provide substantial new opportunity at modest cost. Significant Government support exists for businesses looking to explore the opportunities in moving to Box 3. Both DIT and Innovate UK are keen to actively support both exporters and those companies looking for international R&D and technical transfer partners.
Remaining in Box 1 presents its own challenges, whilst moving to Box 4, although sometimes tempting, represents the greatest difficulty, cost and risk.
7 Managing Supply Chains – The breakdown of supply chains has done significant damage to many businesses. After years of off-shoring and outsourcing, there is a ground swell of opinion that, wherever possible, suppliers should be on or near-shored. However, whatever the strategy, any business should look to mitigate future risk by considering the dependencies and risks in their supply chains, including:
- Are contracts all in place and their requirements observed?
- Is any IP associated with or relating to supplies and suppliers understood and documented?
- Are all internal and external drawings and processes up to date, fully documented and matching any internal processes/modifications?
- Are my supplier’s businesses robust?
- Are there potential alternative sources of supply?
- If COVID, or similar, returns how will that affect my business?
- Are stock levels optimal?
The life blood of any business.
Now is the time to optimise the internal and external sources of finance necessary to support your future growth.
Review and ensure that all “internal” sources of finance have been explored and considered, and look to work with your advisers to ensure that advantage is taken of all the Government schemes available to you.
Reforecast your financial projections, bearing in mind of course that many of the current schemes will need repaying at some point.
Consider the grant funding schemes available to you as well as the various finance options.
Finally, and in summary, now is not the time to wait and see.
Business owners have been struggling with Brexit inertia for the last three years and are now cruelly faced with a major disruption to what they believed might be coming out of final negotiations.
Developing the new products and services that match the demands of significantly changed markets is an imperative for businesses that wish to survive and grow. The need to adapt or “pivot” their business model will be key to many businesses ability to continue. Remaining in Box 1 is not an option.
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