The global pandemic affected lives and the economy severely. Currently, as companies and corporate houses are navigating through the unending COVID-19 crisis, there are several problems that corporate and business leaders are focusing on. Resuming office functions where employees have to step out for work when there’s no definite cure for the virus yet, companies have to narrow on safety protocols as well other than setting business mandates. Reshaping business, while staying safe and secure, has become the new corporate mantra.
Robert Trosten talks about business priorities and continuity planning
Business and financial advisors like Robert Trosten have recognized a few essential business priorities that are worth considering. He, like other progressive entrepreneurs and business leaders, shares his views on business continuity.
- It’s essential to harp on people’s security and ongoing engagement
Employees need to stay secure at their workplace. People are counting on their community, employer, and government leaders for better guidance. It’s essential to address the probable health concerns in a COVID-19 ambiance transparently and openly will keep them engaged and ensure business continuity. The other modifications organizations must make to start and expand flexible working modules based on the project requirement. Companies need to restructure their team, depending on their industry vertical. Other than reallocating resources, it is necessary to create employee well-being policies and program which supports a secure working environment. Simultaneously, organizations are aiming to have daily communications which sync in correctly with the current health authority and government policies for helping employees to stay engaged in work. It will help a company to navigate better through this crisis.
The municipal governments are working effectively with the big data collected through mobile operators and technology companies for developing a health QR code system. It enables people to keep track of their movements in the 14 days to detect if they visited any risk-prone area.
- Reshape policies for business continuity
The majority of business firms are about to experience a significant disruption in their usual business operations. There’s either going to be a lack of resources or underperformance because of the pandemic crisis. When this crisis started, there were supply chain challenges for organizations in exposure to China. Presently, the crisis has disseminated across the globe, and companies worldwide are witnessing this disruption. There have been significant shifts in behavior impacting customer demands from retail and customer, automotive, life sciences, and manufacturing sectors.
If you want to address all these challenges, it is essential for companies to:
- Assess short-term liquidity
Right now, most organizations will want to implement a short-term money flow monitoring discipline, which enables them to predict the cash flow pressures and interfere in the correct time. Companies are planning to start a strict discipline in working capital, especially around building inventories and collecting receivables. It is also essential to get creative as well as proactive enough to balance out the working capital cycle. All through the crisis, organizations will want to ensure daily contact with the suppliers for recognizing any potential risks.
- Evaluate operational and financial risks and respond fast
Organizations will have to manage the direct cost escalations and impact their entire product margins. It’s essential to renegotiate and intervene whenever required. And the organizations that react slowly or can’t renegotiate the new terms and conditions might have to deal with financial stress. It will have long-term effects, which isn’t desirable in such a condition.
- It is necessary to choose an alternative supply chain
Organizations that source materials and parts from the suppliers in areas affected by the pandemic need to opt-in for alternatives. And the quickly they react to this, it will help them to develop the temporary capacity to cater to customer needs and obligations. The organizations that have associations with the agile manufacturing solutions can make spot purchasing decisions. Else, they might have to lose out on the contracts with multiple logistics and service providers. It is essential to consider an initial disruption along with the post-crisis scenarios considering the chances for demand spikes.
- Manage the way the COVID-19 crisis impacts the business plan and budgets
The organizations will want to create a stress-test financial strategy. They will consider various hypothetical scenarios to assess the probable impact on their financial performance and evaluate how long the pandemic impact might carry. Organizations also need to consider the minimum operating needs, which comprise the essential dependencies of the location, workforce, technology, and vendors.
- It is essential to communicate with various stakeholders
Transparent, timely, and clear communication is essential when developing a platform for reshaping the business. Companies want to get continuous support from employees, creditors, customers, suppliers, regulatory authorities, and investors. The following pointers are crucial:
- Companies always prefer to keep consumers updated on any impacts to a service and product delivery. If they can’t cater to any contractual obligations because of production or supplier disruption, it is essential to have clear communication about the matter. It helps to resolve liabilities and punitive damages linked with any disruptive consumer obligations.
- Concerning employees’ companies need communication plans to arrive at a balance between alertness and maintaining the “business-as-usual” approach.
- In terms of investors and creditors, organizations should assess the new terms and conditions based on the loan contracts, for recognizing sensitive debts and avert vital technical debt breaches. The reviews will also carry the much-required advantage of providing the organizations with the chance to have a dialogue with their creditors on refinancing arrangements proactively.
- Companies should pay close attention to regulators and government representatives. As they communicate with relevant stakeholders, organizations need to adhere to legal terms and conditions. They should consult their litigation managers to take the necessary advice on probable liabilities. Companies need to involve their business units to manage the communications concerning ongoing breaches.
- Organizations should maintain their usual connection with suppliers concerning their capacity to deliver services and goods during the pandemic crisis. There should be recovery plans as well so that an organization can choose an alternative supply chain management at the correct time.
To summarize, global organizations need to get proactive and predictive in their decision-making process. It will help them to go ahead with the business continuity plans and re-build organizational resilience.