If you are someone who believes in having no plans, you cannot fail. You will flow with the current and hope to have good times ahead. You will always take actions off the cuff and get them right sometimes. This is acceptable when you are running as a singleton. In the larger businesses, there are multiple stakeholders, right from the financiers to employees, customers and suppliers. We have to deliver them the confidence that we have a vision of the road ahead and a playbook to deal with the likely situations thereon.
Every crisis is unique and poses its own uncertainties. Businesses with resilience are able to balance their long-range plans with short term goals; for any crisis at hand, they plan in advance to deal with possible scenarios. How can one develop this playbook?
The popular belief is to plan cost-cutting, some add a tinge of sophistication to it by calling it cost-optimisation. Certainly one needs to challenge the established practices and norms in the company right from employee benefits, salary hikes, bonuses, travel policies to the choice of suppliers, work procedures and tools – hardware as well as software.
There are hundreds of avenues to reduce costs in any organisation. Sometimes, people apply the 80:20 rule and ignore the details in the small items. However, a bunch of them might be easy to cut and when reduced as a bunch, there is a substantial impact. The challenge is to spot them.
Cross-functional teams could be formed to review the items of cost – large to small in terms of the impact delivered by each of those cost items. They can think of alternates that could cost the organisation lesser, re-engineer a work process which will save costs. They can recommend measures such as a moratorium on payments, restructure benefit plans and temporary renegotiation of commercial terms to conserve cash and cut costs.
Customers have the answers
Often organisations become inward-focused and deploy a significant amount of energy in the area of cost optimisation. However, there is an opportunity when customers have a new need. Businesses need to spot them and try to fulfil those and thus, add new revenue streams. We see FMCG companies launching sanitisers, apparel companies bringing out face masks, consumer tech companies venturing into health-tech. All of this has been possible since they listened to their customers and moved quickly to seize the opportunity.
Companies have innovated to make work from home a possibility, several universities have made their teaching online, companies have become more aware and committed to their social responsibilities and used that lever to popularise their offerings. Again, all of these could happen because they listened to emerging situations with their customers and responded by innovation.
As millions of neighbourhood shops, small businesses, daily-wagers and gig workers around the country are looking forward to get back to their sources of livelihood, they need to listen to their customers, figure out the changes in their demands and be ready to cater to them. In the same way, we need businesses to keep a tab on the changes and spot the opportunities. Seizing the opportunities faster than the others is resilience and adaptability. Great organisations and leaders can drive their teams to this, everyone must strive to get there!
No alternative to productivity enhancement
Times could change and business models could become irrelevant. Some businesses will face the pain more than the others. For example, in COVID-19 pandemic of our times, airlines, railways, entertainment and hospitality have been impacted severely while sectors like healthcare, power, telecom, steel and food are not impacted as much. However, there are tectonic shifts taking place in the way customers feel the need to buy a product, the quantities they buy, their payment methods, preference of owning the products and consumption patterns.
We see innovation taking place at a great speed in terms of technology, systems and processes to make the products or services better and cheaper, financing easier and faster, distribution smarter and after-sales service effective. In each of these areas, companies could have opportunities to find new partners, invest in new areas and even acquire companies.
Every company might not be able to access capital for M&A or new equipment and systems or acquihire talent. However, each company can review the current methods to innovate new ones, identify pockets of inefficiency to get rid of those parts of the business or let go the people who do not have the skills and potential to come up the curve.
Companies have to think how the future will look like for them and hence determine what skills will be essential for them to not only survive but excel in that. So, they need to train their people for the future and get ready to stand up to the new challenges and opportunities.
The event is global and has a deep impact on revenue streams of companies. However, in a matter of a few quarters, consumer demand will be back on track albeit with some changes. The resilient and agile companies will be quick to ready themselves and seize upon the opportunities. History will be written about the excellence exhibited by these leaders. Let’s rise to the occasion!