Historical research suggests that a high percentage of large companies have experienced a revenue stall in their business cycle and only 7% of companies that stall to slow or negative growth are able to pull themselves back to high or moderate growth. What do those 7% of companies do that makes the difference ?
1. Diagnosis
Businesses who recover quickly look at the problems being faced and prepare a full review of how their business is faring during the crisis. It’s important to address not only external problems but to make sure there is an internal ‘self-inflicted’ problem assessment as well.
Look at issues around your people, digital technology & analysis, operations, customers, funding & finance, business partnerships or acquisitions and identify risks & gaps in each of these areas.
For example :
– Did you have key financial information to identify daily cash flow forecasts based on different scenario’s with clear action plans for each scenario and specific financial levers ready to go as it played out to ensure a fully-funded runway?
– Were you able to quickly identify products or services that were key contributors to the profitability of the business, re-focusing on these key segments and closing out those that did not significantly contribute to the profit margin?
– Was the leadership team aligned and successfully executed tactical business plans for business survival?
– Did the organisation structure support the business when it needed to adapt quickly to the COVID disruption ?
– Did the business have digital platforms to facilitate remote working and maintain collaboration and connection?
– How have your customers changed – who were your critical customers 80/20 focus ?
– Critical suppliers, were they reliable and did you have alternative sources?
2. How to architect ‘Project Post Covid” recovery
Owners and Boards will then need to engage in a strategic review assessing firstly what the business environment post COVID will look like ie. customers share of wallet; change in supplier behaviour, workforce experience and then secondly whether there needs to be a change to the current business model.
This is made more difficult by the fact that no-one really knows what the post-COVID environment will look like. CEO’s and Boards will need to focus on the known known’s and prepare shorter term forecasts ie. quarter by quarter with scenario’s for alternatives based on a series of assumptions. This will set the strategic direction and then allow the executives to ‘course correct’ as more information becomes available.
3. Imperatives
a) Focus should be on your people, do you have the right people, properly engaged and equipped for the future
b) Do your processes and systems enable you to operate efficiently and effectively in the new environment
c) Are your customers happy, did you loose key customers or key segments of business
Financial imperatives should therefore be an outcome of the above.
When working on the strategy re-development firstly focus on your people, spend time with your front line employees, in the stores, with on-line teams, asking questions and working with customers, observing interactions. Also review the executive leadership team and make sure you have the right people, in the right spots, doing the right things.
Importantly, CEO’s will need to be transparent with their people, share the diagnosis, discuss the central idea being a renewed focus on revenue and profit recovery and create energy, excitement and belief in the recovery plan. Create a project name to drive change and provide an environment which drives a co-creation of the recovery plan.
If you would like more information on our strategy advisory or business planning services please contact us.