Most CEOs, Boards of Directors, and business leaders did not have an action plan for responsiveness to a global pandemic. The risk of this occurring was thought to be unlikely, remote, or improbable. But Covid-19 swept across the globe in 2020, disrupting and changing business plans. However, as vaccine distribution increases and most Americans can be vaccinated by May of 2021, most states are on the pathway to a ‘new normal’ for society and businesses. Your most important responsibilities as a leader of your company are to evaluate your organization and how it must change going forward, determine how to adjust your strategic plan, and clarify what recovery is for your business. Then, you must look at how other global issues will affect your business in the 2020s.
To evaluate your organization and how it must change going forward, keys are to ascertain how large changes in personal behavior will affect demand for and purchases of your products and services. More employees are permanently working from their homes. Employees working remotely are moving from cities to the suburbs and rural areas. They are also moving from states with high-income taxes to states with lower or no income taxes. There is less driving, more take-out and delivery of food and office supplies, and more meetings via Zoom or another similar option. Travel on airplanes, trains, subways, and cruise ships are sharply reduced and may not fully rebound for several years. These and other societal changes will affect your business. You must consider how your organization will adjust to the new reality.
What are some other major global forces at play in addition to the pandemic? First is the stock market crash and recession that was caused by the pandemic. This won’t be the last business contraction this decade and we must prepare for that eventuality. Second is the pandemic’s effect on productivity. Social distancing, avoiding large gatherings, and ingrained fear will continue to slow our economy. Environmental concerns due to our changing climate and the current Administration’s increased focus will cause changes in productivity and costs. In many industries, a talent shortage of the employees who are necessary to continue growth will be an ever-present challenge. Technology will continue to advance, and we must consider the increased effects of artificial intelligence, blockchain, and other paradigm-shifting innovations. Government spending, worldwide, is prevalent and resembles wartime spending. Looking at history, that spending was followed by inflation. In some cases, it was substantial. In the current circumstance, it is a looming unknown.
When we look at all these factors in addition to the usual focus on how to grow revenues, add new product lines or services and spend efficiently to grow profits, the strategic business discussion has become more complicated and essential. First, what are steps that can be taken to make the rest of 2021 the best possible for revenue and profits? When you do this, make sure that you look both ways. First, look inside-out from your company and what you do for your customers and determine what you can do better to serve them. Second, look outside-in from your customers as they see you. Your goal is to maximize the chances that they will still purchase from you and increase their purchases. You will need to do all you can do to enhance this likelihood.
A year ago, you may have been focused on how to grow revenues, add new product lines or services, and spend efficiently to grow profits. Now you must shift gears and ask yourself, ‘What is a recovery for my business in light of societal and business changes?’ Also, there must be increased thought given to the big picture changes that we will encounter during this decade.
So how do you do what is best for your company moving forward? Assemble the best and brightest members of your team and use their ideas. Make a list of your trusted advisors such as bankers, lawyers, wealth managers, insurance representatives, and industry leaders and utilize their experience and opinions. But just as we plan during good times, we must now adjust and plan our best, even better than our best, during these times.
Nperspective has assisted many clients in improving their business results through implementing or helping with their strategic planning process. Gary Cohen has served in corporate financial management roles for over thirty years and for three multi-location companies with up to five dozen locations with a focus on strategic planning, improving operational efficiencies and maximizing financial outcomes.