Business priorities to consider when recovering from Covid-19 crisis
THERE is no doubt the coronavirus disease 2019 (Covid-19) has changed the world. For many business executives, the toughest leadership test posed by this global health crisis is how to deal with it and its aftermath.
For business leaders in the Philippines, the actions they take now and in the coming weeks — especially when quarantines are modified or loosened — would define them and their companies.
“Even if the impact of the Covid-19 pandemic varies across industry sectors and regions, it is no exaggeration to recognize that the struggle is real,” says Marivic Españo, chairman and chief executive officer (CEOs) of P&A Grant Thornton.
CEOs working to balance dozens of critical priorities each day are starting to focus on two leading questions: How can we navigate through the crisis to emerge stronger than others in our industry? And how can we learn through this experience to win in a “new normal” world?
As economic life appears to stabilize, organizations need to be ready to come up with the right strategy to outperform their industry peers. Companies that adapt more quickly to the initial transition — and, eventually, to the new environment — would emerge stronger.
However, this recovery will be different. Such factors as how widely different markets bounce back or whether people are forced to go under lockdown again if more Covid-19 cases emerge complicate the situation. Knowing what would happen next is impossible. But it is possible to consider the lessons of the distant and recent past when thinking about the future.
The following are essential in shaping the new normal, and business leaders need to come to terms with them.
Workforce
During this uncertain time, businesses must assess their plans and realign their activities to adapt to the new rules prescribed by the government. “Businesses must be willing to try new practices, switch to better tools, and update action plans for the short, medium, and long terms,” says Españo. “Updated processes will help businesses adapt to a changing market and set them on track to a brighter future.”
Capital and resources
Pre-Covid-19, cash budgets were calculated monthly. Since the coronavirus crisis struck, however, organizations have been reviewing their
cash assets as often as weekly. How do you budget your organization’s cash during such a time? First, project your accounts receivable realistically and review other cash sources. Then list down all your expenses and other cash outflows. And, finally, analyze your accounts payable to suppliers, taxes and payroll from the previous period.
Operational model
Rethink your operational model and allow the business to adapt. In the long term, think
about implementing process automation and integrating technology into operations. When reviewing business activities, consider the shift to Industrial Revolution 4.0 or digital transformation.
“Set new business goals with such changes in mind, make informed decisions and take advantage of every opportunity. Dare to innovate,” says Españo.
Supply chain
When a crisis such as the Covid-19 pandemic hits, organizations need to reinforce their supply chain to continue meeting customer and client demand. Securing your supply chains is paramount.
This is done by assessing the situation quickly and then moving forward with an action plan aimed at preventing problems and implementing solutions. Monitor inventory levels as well by establishing critical inventory thresholds and building stockpiles as needed.
Also, strengthen relationships with customers by finding alternative shipping methods, adjusting delivery schedules and being transparent about your challenges. And last, cement supplier relationships by controlling your cash flow and negotiating payment terms.
The uncertainty that is this far- reaching makes it challenging to control the challenges at hand, let alone in the years ahead. It is imperative to reconstruct for the future and not solve the problems of the past.
Companies have begun to consider their return to health. For most, the pre- pandemic “business as usual” won’t be nearly enough. To move beyond survival mode, organizations need to think beyond their defaults, reimagining how they recover, operate, organize and use technology, setting the foundations for sustainable success. Ironically, a crisis like this pandemic brings new opportunities and should prompt one to explore new directions.