By Arnoux Maré, Business Mentor to SMMEs and MD of Innovative Staffing Solutions
(Editor’s comments are in parenthesis)
Any business that wishes to make it to the next financial year needs to have a strategic Covid plan that includes a new operating model that will determine the organisation’s future. The way business has always been done, has become redundant. Consumers act differently, they think differently, they respond differently to marketing or product offers, they make purchasing decisions differently, and they behave differently.
But planning cannot happen in a vacuum. This blueprint must be accompanied by a situational analysis or audit to determine how your business is currently affected by the challenges, specifically Covid-19 related difficulties. This in-depth process needs to look at the organisation’s Strengths, Weaknesses, Opportunities, and (competitive) Threats (SWOT) and the Political, Economic, Social, Technical, Legal and Environmental (PESTLE) factors currently affecting the business.
While strategic planning can aid a business with its vision and defining its overall goals, the planning tool will not resolve systemic issues such as poor leadership and poor financial management.
(In the HVAC&R sector many opportunities are surfacing way beyond the traditional contracting function.)
One of the quickest financial wins that businesses can capitalise on during an economic crisis, is to cut out unnecessary expenditures.
Rather than solely focusing on plugging the seeping holes, businesses must try to create other avenues that generate revenue using the resources currently available to the business. One way of doing this is to test new revenue and pricing models with their ‘super-consumers’, those customers who spend significantly higher than the rest and are emotional about their purchases.
The digitisation of a company’s offering cannot be overstated. As seen with the current landscape, businesses that already made the digital migration before the outbreak or had digital contingency plans in their Business Continuity Plans (BCP) fared slightly better than those operating from an analogue system.
While not every part of a business can be digitised, entrepreneurs must not wait for the next disruption before going digital. Their current and future BCP’s must include a digital part if they wish to continue functioning beyond the crisis. This also includes looking beyond the current offerings of business and interrogating what new digital supplementary avenues the organisation can add to its services/products.
Another way to increase gains is to accelerate innovation. Rather than waiting, companies that have near-ready products should move to launch them as soon as possible, whatever bugs there are can be ironed out using field data gathered from customers. (Can HVAC&R innovate? They have been innovating for a great length of time. Not one job is the same and even the smallest tweak here and there is not a solution to the job but the beginning of an innovation!)
Entrepreneurs often shy away from change and rely on the already proven methods to achieve their goals, but during a crisis what is needed is the ability to recognise what your customers need and at once move to provide them with it.
The lighter or more agile you are as an organisation, the easier it is to pivot or circumnavigate hurdles. The presence and management of human capital, while vital for business, requires a dedicated team of experts such as the Human Resource department, but for a lot of SMMEs, this role often falls on the Managing Director or CEO (Chief Executive Officer), the same individual responsible for strategising the future of the company.
Outsourcing the elements of the business that are not involved in the core functions of an organisation to a third-party service provider can free up much-needed resources and afford organisations access to support teams it otherwise may not have. (Covid-19 has left many contractors and engineers without jobs. There is an opportunity here to gather the good qualified people and help them start up and spreading the cost of running a business by outsourcing.)
“No one can predict the future with 100% accuracy and any Business Continuity Plans may only cover partial elements of any eventuality, but not having any plan in place or failing to learn from the current and past crisis is an infallible path to failure. Companies looking to grow from the economic crisis they find themselves in need to go on the offensive and find new ways of pushing forward.
Because it is during dark times that legendary companies and leaders are forged.