We are facing an unknown future, and one that many companies may not live to see. With clear trends showing that businesses will struggle for at least the next 18 months, COVID-19 has lit the fuse to what was considered ‘normal”. Due to the severity of economic damage from coronavirus, previously successful companies are being forced to rapidly re-think their operations and adopt new norms to avoid becoming the next casualty. What is it that leaders need to do to prepare?
“Regardless of sectors, recovery could be a totally different business for some organisations. It may include a new business model that leverages disruptive technologies, but some norms will probably never return.” Yau Boon
There’s no avoiding the fact that unfortunately there is little chance of survival for some companies because they are just not ready for the tough economic winter ahead. Without having the “food”, resources and nimble actions they need to survive, they won’t be able to face the bitter conditions. They must find new sources of food and income. It may not be the same ‘food’ as before and it could, or will, be different.
Learn to adapt
Companies must adjust and do what they need to help and survive. There are some great examples of this with small fashion houses in the US pivoting to make fashionable masks and hand sanitisers. Some organisations have switching trades to be part of the supply-chain in response to the pandemic. Car manufacturers Ford & GM are now helping to produce ventilators and respirators. It’s not easy but it’s what’s required. Companies must learn to adjust, while staying lean and removing unnecessary costs.
Cash is king!
With this in mind, financial capital and profits are also obvious survival tools. With the potential of the global financial crisis persisting for the next 18 months, having enough cash for this period of time, or at least intact easy credit lines, is vital. However, companies need to look beyond just their financial capital and think outside the box for solutions to traditional cash flow problems.
Utilising all forms of capital
It’s not just financial capital that yields results, all forms of capital must be scrutinised e.g. human, social/ecosystems and national. For example, SME’s can approach their team and offer investment opportunities in the company to increase cash flow, or possibly discussing alternative pay arrangements for a period. Innovation should also be encouraged to create new prospects and a stronger future-ready company. By working together and harnessing every facet of an organisation’s capital, it can create solutions that can keep everyone ‘warm’ during the winter.
Technology is also key. COVID-19 has accelerated the adoption of digitilisation. On 30 March, China Daily reported that sales by key retailers had climbed to more than 30% on some E-commerce platforms, according to the Ministry of Commerce. Companies need to look at leveraging technology to grow and create exciting new opportunities! For example, insurance companies offering million-dollar online policies, and radio stations entertaining listeners with more than just talk but webinars too! With a greater reliance on technology and communication tools to engage, it will help foster a new norm post pandemic.
In order to stay afloat, companies and leaders need to focus on a few key things. Business models need to be reviewed, revised and re-designed. All capital options must be explored. And lastly, we should all be looking at new skills and digital technology to develop further. If only the strongest survived, then the T-Rex would still be roaming the earth!
For more in-depth information listen to our recent webinar ‘Recovery from COVID 19: Where do we begin?’ on 6 May 2020, as part of our Future Ready Series, and organised in conjunction with AusCham. The panel if speakers included Timothy Wong, Regional Head for DBS Group Research for Asia; Malek Ali, entrepreneur, Fi Life; and Yau Boon Lim, Senior Partner, Disruption Management, Lim-Loges & Masters. This is the first of a series of articles from extracts of their discussions.