The current pandemic situation brought big uncertainties for businesses in all industries and worries about its impact on the global economy. There have been very few crises as global as Coronavirus outbreak. At this point, it had affected more than 177 countries – according to WorldMeters (March 26) more than 474,900 cases and 21,353 deaths were recorded. All of us are currently scrolling the news afraid to see the quantity of the cases in the neighborhood. HealthMap now updates its map of the distribution of coronavirus in real-time using artificial intelligence.
Now the impact is not fully clear but it’s obvious that changes in all industries are inescapable.
Current impact: the existing business examples
In the long term quarantine scenario, establishments like restaurants, cafes, bars without the food menu, even coffee shops might no longer be able to afford the rent. Some might shut down altogether but many would switch to a delivery-only model. Even after the situation is more stable and optimistic, citizens would think twice before going out for a meal and prefer ordering online or getting a takeaway. This would be a step forward for an online delivery world.
The gyms, dance studios, fitness centers in the worst shape. Coaches are already finding their way around with online consultations, Instagram training, monthly/weekly challenges and groups in Instagram live. It might help them float but there no option here for the gym owners.
There are already hotels with QR code powered elevators that are linked to an app. The floor number has to be entered into the app to avoid any physical contact even ones with low button pannels to use feet for it. Mobile wallet payments may see a surge as many would want to avoid physical currency notes/coins.
The export dominance of China will see a hit in the coming years. If not for everything but certainly for essential goods like medicines, surgical items, etc. Countries might want to keep it within their local borders or consider cheap labor countries like India, Bangladesh, Mexico, etc. This could be either due to anti-China sentiments or to decentralize the supply chain, because of the realization that such an event might happen again, or a combination of both.
The retail businesses with the physical shops would need to consider the online ordering versions and local delivery bonuses to soften the hit.
From the above, it’s clear that each business related to tourism and travel, events, retail, training or transportation is expected to incur significant losses. So it’s important to find the paths for the business to evolve and adapt with the crisis planning.
Crisis Management Planning. How to soften the hit for the Business
The worst that we can do in this situation is totally ignore and pretend that nothing is happening, continue working, as usual, don’t change anything. By doing that we could put in danger not only the business itself but employees lifes too. Changing the game and adapting is not easy but necessary step forward.
We formed some points that could be the guidance in a crisis situation:
1. Say NO to panic and negativity.
Yes, it’s important to be prepared for the worst-case scenario. There are a lot of companies and people, that have already faced revenues decrease. It will last for a while because of consumers’ worst expectations and coronavirus panic. Yet also matters to face the challenges cold headed to be able to make the important decisions fast and efficiently. There’s no way to influence the whole situation in the world so just be calm and prepare to make some changes.
2. Focus on your TOP priorities
During the crisis, every business decision should result in maximum financial impact especially your biggest customers related. Start with defining the top priorities and biggest customers to see the full picture. Learn all the details about your top customers and determine top 20% of products/solutions/services, which bring you most of the turnover.
3. Keep your hand on the pulse
Monitor leading indicators of how and where the pandemic is evolving and conduct scenario planning using both epidemiological and economic inputs. Keep tracking about currency exchange rates, commodities prices, financial indices, quarantine limitations so you can act accordingly. Remember that local currency devaluation is a great excuse for the price increase. Moreover, the price increase for the next month is the efficient ever sales promotion for current month sales.
4. Find ways to protect the employees that would be a fit.
Many institutions have put basic protections in place for their employees and customers. Companies have activated no-travel and work-from-home policies for some workers and physical-distancing-at-work measures for others. At the current stage, the remote policy is preferable so provide this opportunity and plan the processes around it.
Provide the support for remote workers, interruptions at home are more frequent than in the office. At some point, workers could find that they don’t have the skills to be successful in an extended remote environment, from networking to creating routines that drive productivity. They worry that staying remote could make them less valuable, especially in a recessionary environment. So keep up the communication and the processes.
In times of crisis, the expenses are the most important. Extra costs, extra people, extra experiments are things that can pull you to the bottom. May sound pretty harsh but keep everything simple and clean. Every month, think about reducing unnecessary and inefficient costs of your business. You can always return to them after the crisis.
6. Management and Processes!
Efficiency – is the main word for this step. Every week keep tracking your employee’s performance. Don’t mess with personal targets, as monthly targets should be challenging and realistic even during the market decline. Unrealistic targets can demotivate your best employees. If there are no questions about their targets for the next period, that can be a bad signal. Make the remote work clear and convenient to boost up the teams’ efficiency.
Don’t be afraid of making tough decisions if they will benefit the team.
7. Make a plan
Plan your business taking into account that crisis is not for one week only.All of the most optimistic scenarios suggest the normalization of business worldwide and international trade by the end of 2020. These optimistic scenarios are possible if the coronavirus pandemic will be stopped soon. But what if not? The uncertainty level is high now. The existing situation may begin to deteriorate, millions of people around the world will lose their jobs and this trend will deteriorate throughout 2020. Be prepared for this.
8. Stay loyal to customers
Your customers are under the same stress you are. If you can help your most loyal customers with solutions that make a difference, you will tighten the bonds, and that closer relationship will persist once the emergency is over. Thinking through the problems that your customers face now can help you to find ways to solve them and stand out with your business. Think of the ways to adapt, make your customers safe and win them with convenience.
It might sound crazy after the cost-cutting step. But after coming up with ways to win the target audience and adapt to the quarantine it’s important to implement them. The faster the better. And if you don’t have the IT department in-house the time and cost-efficient solution would be to outsource. Find a reliable partner to make your digital representation pop. It will be a big step for your business to float at any crisis time.
The crisis is an opportunity. Opportunity for those companies, that makes business decisions quickly, that looking for new market niches and won’t break under the stress. Only those companies will be able to find new opportunities and stay stronger during unforeseen and undesirable external factors in global chaos. But such companies need speed and flexibility, both in management and in implementation.