By Gordon Reid with input from Mieka Cleghorn, SA Managing Director, Transparent
As a semi-retired business executive, and after spending the past twenty plus years working for some of South Africa’s leading companies, the COVID-19 lockdown has afforded me valuable time for some serious thinking.
Many businesses will need to change the way they operate to remain afloat. Useful insights and lessons from company closures will undoubtedly surface in time, but for now we should focus on the future and what can be done now to keep our businesses running.
The intention of this article is to stimulate discussion, thought and imagination with a view to developing a roadmap to traverse the rocky road to economic survival post-COVID-19.
With revenues down and unlikely to reach pre-COVID-19 levels for the foreseeable future, the clear (but not simple) way to improve the bottom line is to decrease costs: downscaling (premises, infrastructure, resources), adopting a work-from-home (WFH) policy, changing or adapting current products and services, marketing strategies, supply chain reviews, digitisation, consolidation, outsourcing/insourcing and so on. These are examples of typical cost reduction strategies that many companies will consider implementing simply to remain in business.
Chief financial officers, financial managers, procurement heads and buyers must step up to the challenge and discover creative cost reduction ways. Innovation, collaboration and digitisation will be required to get a business through the devastating impact that the pandemic has had on our economy. The last resort for cost reduction, although often the easiest and most tempting to apply, is staff cutbacks. The South African economy desperately needs people to be employed.
During the lockdown, I have witnessed first-hand some of the real challenges faced by business and the changes already taking place. Take the education sector, for example. My wife is an educator (aka teacher) who, like many others in the education sector, has been significantly affected by the COVID-19 lockdown.
There was a shift to digital communication: WhatsApp, Google Docs, Google Classroom, Google Drive, Microsoft Teams, Microsoft Meet, Zoom and Facebook have suddenly become essential educational tools. Additionally, cell phones, tablets, laptops, desktop computers, webcams, software and data packages are being upgraded to meet the new demands required for online education (good news for the IT retail sector).
WFH for educators has required new skills to be learned in a very short period of time. Standard working hours, weekends and public holidays hardly seem to apply. For many dedicated educators, including my wife and her colleagues, children’s education is their absolute priority: there is a job that needs to be done, so get-with-the-programme and get on with it. This is the positive and proactive attitude that all businesses need to adopt.
Educators are learning new ways of teaching through systems that they first have to learn (online) and understand themselves before they can use these new tools effectively. Moreover, it is not only the learners that need to be taught, but also their parents which, speaking from first-hand observation, is often another challenge facing educators. This highlights why it is critical that all stakeholders are taken into consideration when formulating and implementing new plans and strategies.
Creativity, innovation and pivoting undoubtedly will start occurring across many business sectors. Pivoting is already taking place in education with the introduction of a new type of online schooling (Curro plans a new online school – and promises parents it won’t be like home-schooling).
The changes that are happening in education are not unique to this sector; they will apply, in one form or another, to many businesses, whether they are small, medium or large corporates.
Business owners and executives need to understand the full impact that COVID-19 has had, and will have, on their business. They will need to ask hard questions and make tough decisions. Typically, one could start with the following (the where, what and how, so to speak):
1. Where are we now? A high-level situation analysis to determine the as-is status
2. Where would we like to be? A realistic view of what the ‘new normal’ could be
3. What is required to get there? Changes that need to be made, however brutal
4. Who do we need to get us there? What type of people/suppliers/materials/services are needed?
5. What do we need to do? The plan: your detailed roadmap to the desired state
6. How are we going to get there? How you implement the plan and measure progress
To answer these six questions objectively and to formulate an effective strategy on which direction to take a business forward, I believe that there are three basic pillars to build on:
1. High quality information: start by harvesting information from all areas of the business, including competitors and suppliers, for an accurate diagnostic using data analytics tools.
2. Expertise: put the best people on the programme. Using an independent third-party for the data analytics should be seriously considered if you want fresh ideas, honesty and out-of-the box solutions to the challenges ahead. The reality is that people are fearful for their jobs. In-house solutions may (perhaps inadvertently) be designed towards self-preservation and not necessarily for the long-term good of the business.
3. Timely action: you need to act fast if you want to get ahead of your competitors. Procrastination will only delay the inevitable. This is not a problem that will simply ‘go away’ when the lockdown is lifted. Be proactive and start now.
We all need to contribute to get the economy going again. We need to stand together, share ideas and build our own roadmaps that will deliver us safely to a new business norm.