Business planning development under coronavirus conditions
Like every crisis, the coronavirus disease pandemic had a beginning, has a middle, and will have an end. This is not like a movie, however, where you know the running time before you buy your ticket. There are a lot of scenarios of the coronavirus pandemic spread, but no one knows which of them will exactly play out.
COVID-19 is presenting major challenges to people and organizations worldwide. As governments consider new rules and policies trying to protect their citizens, business leaders are also managing the crisis on behalf of their employees, customers, and stakeholders, preparing for the new normal, by considering the capabilities they’ll need in order to emerge stronger on the other side of the coronavirus outbreak.
In order to reach the safe shores and recover from negative COVID-19 pandemic impact, CEOs have to find the right balance between the dangers of coronavirus and work their business and employees have to do.
Business planning. Don’t cross the marsh blindfold in the dark
The main goal of any business or entrepreneurship is not to survive, but to thrive under different conditions, good or bad. And turn today’s costs into tomorrow’s revenues. That is why business planning is important. Especially being thrown into conditions, like we all have appeared today.
Many companies have worked on contingency plans during the last few years, to be prepared for various types of geopolitical or environmental threats. The plans are implemented now. But, as the coronavirus pandemic unfolds, it becomes clear that they need thorough reconsideration.
CEOs and other top managers try to enhance and adapt them by replacing business planning models or even changing the business planning process itself. Such decisions are happening on a continual basis, as new information shapes and reshapes our collective conscience and business environments.
Building a comprehensive up-to-date plan is the major concern for CEOs and other executives. Now is also the time to accelerate efforts to estimate the financial impact of COVID-19 on your business to minimize impact to the bottom line. A full rapid response considers all the functions of an enterprise:
- Commercial. You should understand whether there will be an immediate shift in consumer behaviors because of COVID-19. It is necessary to determine whether customer policies and priorities require revision, how your business can improve consumer communications, and the steps needed to protect your brand and improve long-term B2C relationships.
- Financial. Business planning steps in finance should be modified to consider realistic and worst-case scenarios. Profit-improvement initiatives should be developed to cover anticipated revenue gaps, such as near-term procurement efforts and supply chain cost reductions.
- Human capital. Business planning importance in HR is no less than that in any other sphere. It is vital to confirm the safety and support of all employees and have a clear employee communication strategy with two-way feedback. HR policies should be adjusted to provide more flexibility to your workers in the time of crisis.
- Operations. Rapid response to changing customer demands gives your sales team an opportunity to adapt and win the market share. Careful business planning on this stage maintains the safety of manufacturing and helps to avoid possible shutdowns. That may mean updating the environment, health, and safety protocols for workers.
- Technology. The tech team should make sure your network can handle sizable work-from-home conditions and that workers are maximizing their use of virtual meeting spaces and other communication platforms.
How CEOs can fight coronavirus effects
To succeed in the pandemic survival race – in these uncertain circumstances – your business has no ready-made receipt of planning. The following tips are given by CEOs when the coronavirus outbreak hasn’t yet become disastrous. But the guidelines of how to act under uncertain conditions you may find useful for your business planning development.
- Be agile and innovative. Spencer Fung, CEO of Li & Fung, says that there’s no way anyone can predict what will happen over the next five years. Does he ask how we are supposed to choose our investments? The solution he came up with had three parts. Being humble and looking for disruption outside the industry are the first two, and the third is being extremely agile. Under uncertain conditions, CEOs should influence a change of mind-set: first in their own management team, then in their employees, and in their customers and suppliers
- Stay flexible. Linda Hasenfratz, CEO of Linamar, thinks that in any time of uncertainty – including right now – there is obviously a lot of uncertainty around technology and politics and trade. And in times of uncertainty, it is really critical to stay as flexible as possible in every way, not just in terms of equipment but in terms of strategy. She adds that the flexibility of strategy and business should directly correlate to the level of uncertainty.
- Lookout for disruption. Segun Agbaje, CEO of Guaranty Trust Bank, admits that when he started in banking, whenever they carried out competitor analysis, all they would look at were banks. Today, it is necessary to take into consideration fintechs, telcos, and anybody that would do fast-moving consumables. He adds that, basically, anyone who has the potential to use mobile wallets and mobile technology is a potential competitor. He says that even small start-ups can become a disturbing wave for your business – even if they do not realize it.
- Learn from uncertainty. Silvio Kutić, CEO of Infobip, says the majority of the things we do every day, we are doing for the first time in our lives. And we are in a continuous learning loop because of new technologies, new customers, and the ever-changing competitive landscape with lots of regulation added into the bargain. He concludes that uncertainty is a driver that gives a new powerful thrust drastically changing our point of view.
- Focus on execution. Kasper Rørsred, CEO of Adidas, admits that not every decision can be long-term. He thinks a lot of companies underestimate the importance of getting the daily job done in a way they can be proud of. To his opinion, leaders think they get famous for strategy, and they don’t really focus on everyday execution, because they think they don’t get famous for that. Uncertainty procreates fear and a lack of confidence. Clear and understandable algorithms help to regain control over the situation.
Business planning strategies. Constantly keep changes under the radar
Under the conditions of pandemic trajectory uncertainty, it is vital for businesses to constantly monitor the background and make up-to-date adjustments both in short-term policies and long-term business planning development. It is evident that COVID-19 outbreak suggests that businesses should activate first-level contingency procedures that include mitigating immediate threats to staff, such as:
- restricting nonessential travel to avoid stranding travelers due to quarantines,
- reviewing and even deferring nonstrategic investments,
- planning for a business environment that’s equivalent to a quarter-of–a-year recession.
Alongside tactical steps, CEOs should bear in mind that a comprehensive analysis of the situation is the winning ticket. But what crucial points demand close attention for building an accurate business strategy?
- Understand systemic risk and how it affects your business during the pandemic. Systemic risk is about how a threat can jeopardize an entire system or systems. For example, many businesses have seen the systemic threat of cybersecurity risk significantly impact their entire business systems.
- Anticipate the systemic changes caused by COVID-19 and the events and opportunities that affect entire systems, including your business system.
- Focus on how things work together to outline how this drives systemic risk and changes in complex systems.
- Focus first on the forces of change that have high levels of certainty and predictability on your markets, e.g., economic, regulatory, digital, consumer behavior, competitive reaction.
- Don’t ignore small, or micro-level changes. They often have an outsized impact on complex systems.
Though there are a lot of parameters and conditions that are hard to forecast, systemic analysis and quick response to changes can ensure your business from COVID-19 catastrophic impact.
We hope that in this article you will find the useful milestones for your business to mark the way amidst current uncertainty.
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