COVID-19 is a before-and-after moment in the history of the economy and society. The pace of decision making is unprecedented and navigating the financial and operational challenges are daunting. To minimize business disruption and protect employees, leaders are taking steps to address the challenges of this new reality.
Think of the current situation as a pressure test for the fitness of your business, and an opportunity to come out of this challenging environment stronger while staying lean. Perhaps the silver lining for companies in the age of COVID-19 will be this: forced change can be positive.
In recent conversations with experts and clients on how they are responding to the crisis, we’ve noticed companies are focused on three key areas: business continuity, managing costs, and exiting stronger.
We’re all facing a new balancing act: Determine what’s best for our companies and protect our employees while delivering the best possible experience to customers. While remote work is more commonplace now than it was a decade ago, 49% of US citizens have never worked from home. Thanks to technology and worldwide shelter-in-place mandates, millions of people are now participating in what Time magazine calls “the world’s biggest working-from-home experiment.” This is already producing new challenges in productivity, business continuity, and security, especially for organizations that rely on offshore teams.
Keep your supply chain moving – One of the most challenging events to recover from will be supply chain disruption. Ensuring clear lines of sight and communication channels are likely top of mind within critical supply chain areas. Addressing contingencies and mitigating supply chain disruptions is critical.
Maintain Operations – COVID-19 will have prolonged impacts on the way we work and on how we grow. Now is the time to prepare for operational resilience by identifying friction points, prioritizing planning, acting to derisk across the value chain, and staying flexible.
Prioritize Critical Initiatives – In this high-stress situation, the instinct is to think about which programs to cut and revert to old ways of working. And while it is essential to reevaluate priorities, shift resources, and track progress closely, it is also crucial to stay the course on key priorities.
The business impact of COVID-19 has imposed significant constraints on cash and working capital, requiring businesses to cut costs, particularly in the short term. Facing uncertainty about revenue, profit, and cash flow for the next several months or longer, consider the following actions to help manage costs:
Assess discretionary spend – As economic activity continues to slow and shut down many areas of production, insight can be gained on what is truly needed versus nice to have. This will help you re-examine which costs are fixed and which are variable. That includes:
Ask partners for help – Protect the future of your business by nurturing your important vendor and commercial relationships. By preparing now, you can avoid future potential contractual challenges or contentious scenarios while still supporting cash flows.
Invest wisely – By accurately prioritizing investments and optimizing existing resources, you can respond to the ongoing crisis in a strategic way as opposed to ad-hoc cost-cutting.
Understand cash flow – Now is the time to assess and test all incoming and outgoing cash flows so that you can take measured actions to protect and improve your position.
The COVID-19 pandemic has put us all in a position to be open to learning every day. As one CIO said, “In the rush to return to normal, use this time to consider which parts of normal are worth rushing back to.”
By leveraging the knowledge and experience gained from this unique challenge, you can build value throughout your organization and emerge stronger and wiser. The following steps will help you plan your future rebound and growth strategies:
Learn from the past – Post-crisis, an objective assessment will help identify opportunities for improvement. When conducting this review, the following questions are key:
Leverage the present to prepare for the future – Once the COVID-19 outbreak is contained, companies will need to prepare for a “new normal.” Will you be ready to take the lessons learned and integrate them into your business for the post-COVID world? Many of your current tools and processes will likely become sources for the next innovation:
We cannot be one hundred percent certain how our world is going to be transformed by COVID-19. We do know there will be new expectations, new processes, and new business models. The actions you take now to be more secure, stable, and agile will lead to your organization coming out of this poised for growth. Identifying and maximizing the benefits for your company and your customers will require executive understanding and action plans to drive continued success. The goal is to emerge not having just “managed” the crisis but to become stronger because of it.
 Laura Quiambao, “Ready or Not: Are Employees Ready to Go Remote?”, Wrike.com, March 17, 2020
 Kevin Ji, Tao Wu, Henrique Cecci,”Limit the Business Impact of COVID-19 Coronavirus Outbreaks by Improving Infrastructure Resilience,” Gartner, March 17, 2020.
 Aamer Baig, Klemens Hjartar, and Steve Van Kuiken, “The CIO’s moment: Leadership through the first wave of the coronavirus crisis,” McKinsey, March 2020.
 Resources for resilient leadership, Deloitte, retrieved April 20, 2020.
 Henrik Nilsson, “How can businesses manage technology costs during the Covid-19 crisis?,” Information Age, April 6, 2020.
 Managing cash pressures due to coronavirus disruptions, PwC, Retrieved April 20, 2020.
 Reflect on lessons learned and share best practices, Deloitte, Retrieved April 20, 2020.
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