6 July 2020
Doing business in a crisis period: 7 tips for an agile company
How can you maintain your company's health and resilience in this precarious time? How do you turn crisis hazards, such as the COVID epidemic, into commercial opportunities? Discover seven tips for navigating your company's course through the storm.
Which politician, scientist or business leader saw the current crisis coming? Just at the time when many warning lights had finally gone back to green again, the COVID-19 crisis swept away restored confidence as if it were a house of cards.
The COVID-19 crisis as 'black swan’
Economic crises have occurred throughout history. In previous decades many businesses weathered two oil crises (the 1970s), the dotcom crisis (the 2000s) and the financial crisis (2007-2009). Beyond these events, remember that specific crises to particular countries or regions have also occurred.
The current crisis differs from previous periods due to:
- the speed with which COVID-19 disrupted economies
- the worldwide scope of the crisis, which spared few countries
- the serious impact on citizens, businesses and sectors, markets and governments
- the unpredictable nature of disruptions in different sectors
- the uncertainty about (the timing of) medical solutions to contain the health crisis
Doing business in an era of uncertainty: 7 tips
Mid-sized companies require a significant stream of new customers, robust growth in credit and deposits, as well as - particularly in 2020 - a further expansion of their online offering. The following tips can help make the external hazards more manageable.
1. Focus on what you can do
Do not get weighed down with factors you cannot control, focus on the elements that you can manage. Take a broad look. For example, conduct studies into the way your customers perceive your brand, how sufficiently motivated your employees are, or, explore new markets. Also think about implementing improvements to your products and services, experimenting with pricing, or analysing new market strategies.
2. “What if...?” Make prognoses and imagine different scenarios
Use business data as a resource for analysis, but also for making cash flow prognoses and for working out risk management scenarios. Data can help you make better assessments about the actual impact of specific decisions in crisis periods. What if you make your employees temporarily redundant? What if you sell a part of your inventory? And what if you start home deliveries?
What is clear is that having real, accurate and verified data available for conducting these types of thought experiments will give your company a definite edge. The current COVID-19 crisis is acting as a driver for taking the step towards setting up a digital reporting system.
3. Call your business strategy and business plan into question
When taking new decisions or outlining a growth trajectory, it's critical to not only learn from previous decisions, but to also look ahead to try to forecast what might be on the horizon. Review your business plan carefully and thoroughly.
That way you can adjust your business strategy and mission for the current market circumstances. Talk to customers, analyse your competition and make a new SWOT analysis. Armed with this reworked information you will have the tools to take actions that yield the most revenue, and make your company more resilient and agile in difficult times.
4. Recognise signs of growth
High customer retention and extra demand for (new) products and services are valuable signals for investment in growth. Steady growth in revenue and profit bring financial breathing space. What do the trends look like in your sector? Be sure to have enough extra personnel in place in good time if it looks like your team cannot keep up with the inflow of orders or contracts.
5. Focus on quality control
Try to preserve quality control while fighting economic uncertainty by paying sufficient attention to solid internal education and internal assessment sessions. Frequent (for example, twice yearly) surveys of (loyal) customer ambassadors can yield valuable information.
6. Aim for sustainable growth through diversification
The current crisis demonstrates that diversifying products and services will improve your company's viability considerably and may even turn into sustainable extra growth. This way of working has proven to be practical not just in crisis periods, but also when new competition comes into the market or the market becomes oversupplied.
That is why it pays to research which segments of the market are being neglected by your competition. At the same time, you can find out which is the most appropriate operational model for making new customers profitable.
7. Get up to speed with digital business processes
The COVID-19 crisis is like a 'digital stress test’; a powerful impetus for implementing new digital technologies in businesses - from virtual meetings to financial reporting. The rate of this kind of digitisation is only going to get faster. Are you, as a businessperson, agile enough to gear up rapidly, along with your co-workers, customers and suppliers? And are you sufficiently alert to security needs associated with business processes and information?