How do you prepare your organization when you’re operating in a time of profound uncertainty and an accelerating speed of change?
Eide Bailly is an independent member of HLB, the global advisory and accounting network that provides international business connections to assist our clients in the global marketplace. HLB is collecting feedback for their annual Survey of Business Leaders, and the results of this anonymous survey will help us identify which topics and strategies our clients are interested in learning more about. We’d love your input!
Start at the Beginning
The speed at which the pandemic impacted businesses exposed gaping holes and issues for many organizations. For some, it was in their supply chain. For others, it was succession plans, or lack thereof.
“Organizations must remedy the vulnerabilities the virus exposed,” says Partner Joe Kristan. “You have to look across your entire organization. It may be in your capital structure—too much debt can make you fragile. It may be in your systems, especially if you weren’t adequately prepared for a remote workforce.”
Leaders can start this process by taking a holistic look at their organization. “Focusing on your core competencies, eliminating product lines or services that distract from your core business objectives and providing superior customer service will keep businesses viable during the slow down and allow for a quicker recovery,” says Partner Shelley Earsley.
Business leaders will have to be far more involved for the foreseeable future. “The depth and complexity of the changes businesses and industries are facing are incredible,” says Ross Manson, Chief Practice Officer. “A high-touch approach is going to be required by leaders.”
What can you do?
Begin with your financials.
"Because this downturn could have a longer duration, liquidity should be top priority for businesses," says Partner-in-Charge of Business Valuation, Chad Flanagan.
Make sure you:
Embrace New Technologies
The digital revolution has impacted the way we do business. A recent HLB survey found that 88 percent of business leaders believe that technology is key to overcoming major cross-border business challenges.
Strengthening digital capabilities will be a key component of future growth and innovation for leaders. This has never been clearer than now. Organizations have had to embrace digital transformation almost overnight as physical office spaces and store fronts closed.
“In the last two decades, organizations that have separated themselves are the ones who have committed and embraced digital business,” says Manson. “Given the current state, digitization of business becomes an even bigger separator than in the past.”
What can you do?
Ask yourself the following questions:
“HOW or WHAT can I digitize?”
COVID-19 has placed already fast-growing technology like artificial intelligence and machine learning at the forefront of future business models. There has been a 13% increase in the average utilization of brain powered robots in retail locations since January 2020.
Further, technology will impact the next normal and the rise of the touchless environment. In fact, a recent study found that 37% of consumers prefer to stay indoors while meeting needs such as working, making purchases and virtually socializing. Organizations must consider a touchless or minimal contact environment in their reopening plans.
Understand Your Data
With sudden digital transformation comes more data than we’ve ever had before. Understanding and harnessing that data will be critical for businesses who wish to make strategic growth decisions.
“There will be a more rapid shift for businesses to utilize technology to solve business problems, meet customer demands, efficiently utilize employees, analyze real-time data and adjust quickly to changing conditions,” says Earsley.
The future of business is based on the ability to make informed business decisions in real time and based on accurate data. This means relying on far more than just your financial statement. Business leaders should embrace leading indicators like operational analytics to get a clear snapshot of their organization’s current state and where they’re headed.
What can you do?
Take a deep look into how operational analytics can help you reposition your organization.
Readiness to Adapt
Even prior to the COVID-19 pandemic, over half of business leaders felt economic uncertainty was a top risk to their organization. But successful business leaders look for opportunity within a turbulent business climate. In order to do this, many business leaders must search for ways to enhance business acumen, understand their customer landscape and even invest in new business models. Forty-two percent of business leaders even plan to bring new products or services to market next year.
It all starts with innovation. “You can’t always use the past to predict the future,” says Partner Laura Srsich. “We now know that anything can happen to disrupt business. Thinking way outside the box for preparedness will become an integral part of all businesses, from planning to budgeting.”
When it comes to new business models, leader should develop three to four business models that outline various plans for success. By developing multiple scenarios, it encourages a more deliberate path forward, eliminating the tendency to choose the middle path.
“Defining a range of business models allows the organization to be intentional and focused in their response to changing economic conditions,” says Earsley.
Truly resilient businesses will be those who focus on staying relevant. They will take a deep look at what they offer, from product to consumer experience, and take the necessary steps to enact change.
“All business leaders should start thinking like a start-up company,” says Manson.
“Companies have to stop doing things just because they’ve always done it that way,” says Flanagan. “Now is the time to revisit short- and long-term strategy. How can you use digital solutions, new markets or products and emerging technology to move forward?”
What can you do?
Focus on customer loyalty and added value.
“Consumer loyalty can be broken or strengthened when times are tough,” says Srsich. “It’s not the ‘freebies’ or giveaways that instill loyalty during tough times. That only cheapens the value of your relationship. Continuing to add value to services you are charging for not only retains the customer but makes them more loyal as a valued partner.”
Embrace a Flexible Workforce
While things have gotten done from a distance, remote working has also presented challenges. More than one third of those individuals working from home said they would like to continue to do so post COVID-19. However, businesses will have to find ways to adapt to this new working model as more than half – 52% - of leaders are struggling to find ways to foster collaborative working in this new environment.
Flexible working arrangements must be key to an organization’s future. Many business leaders—81%— report exploring more flexible work arrangements in order to attract and retain future talent.
“Employers who can use the recession to hire great people cast adrift by the recession will be the long-term winners,” says Kristan. “Recessions don’t last forever, and strong employees will put you in a position to take advantage when recovery comes.”
For Earsley, success comes back to your employees. “The key is strong leadership and employee retention in essential roles. When an organization emerges on the other side of economic difficulties, it is critical to have retained key employees with their talents and loyalty to more rapidly make the business successful again.”
What can you do?
Prepare for a long-term remote workforce.
Digital transformation from on-premise to cloud solutions, enhanced cybersecurity needs and collaboration platform investments will need to be prioritized to ensure a competitive advantage in the future.
It’s Time to Focus on Your Business
Our normal has been upended in the wake of a global pandemic and subsequent economic recession.
Organizational leaders who re-evaluate their business model, look for ways to embrace digital transformation, prioritize their employees and learn from their data will be better positioned to move forward and plan for the future.
The steps you take to prepare for the next normal will be critical for your business. We’ve created a guide to help you reopen and navigate into the future.