The world economy has already witnessed the end of its bull
market in 2020 and 2021 brought challenges on all fronts. Inflation at 2.3% in
America was a stark reminder that inflation is still with us, even if we have
managed to tame it and put a lid on it. But it’s becoming increasingly clear
how difficult such moments are to experience, especially in times of financial
stress.
Businesses were pushed into a corner when covid hit the UK early
in 2020, and then again when China had Covid-19 outbreak. Many business leaders
found themselves fending for themselves and their teams with little support
from government support or funding. A major contributing factor to these
circumstances was the Federal Reserve moving aggressively to slow growth when
they should have begun to lift interest rates. And yet this created a ripple
effect across the whole sector, not just British companies but globally. Now,
with the US economy set to contract this year, there are signs that things may
well get worse before they get better. Let’s look at ways in which your
organization can ride through the storm.
1.
Reassess Your Current Strategies
Before any strategy shift you need to think about what aspects
of your business can benefit from change. For example, maybe some people don’t
want to work from home, so they can be at home every week or month. Or perhaps
you do deliver services in a location beyond standard office hours, such as
evenings or weekends. You could also increase your capacity or move operations
to more flexible formats like hybrid working arrangements, allowing employees
to take time off but still providing them with a flexible schedule, or doing so
by reducing staff numbers to reduce costs associated with staffing and training
new employees. The point is that we must evaluate how we can best adapt our
current strategies to make sense of the wider economic environment.
2.
Prioritise Employees Over Profits
The biggest challenge is how to balance two opposing factors. On
one hand, it is imperative to keep the workforce happy and stimulated. We
cannot afford to cut corners and go back into isolation for too long. That
means keeping employees as engaged and motivated as possible, ensuring good
quality software and infrastructure, offering appropriate safety measures, and
encouraging diversity, equity and belonging. This approach will allow you to
keep your people productive while prioritising profits and maximising value
creation.
3.
Adjust To New Challenges
When faced with a recession, you need to decide who is going to succeed and who isn’t, rather than focusing on individual performance metrics or cost accounting techniques. Instead, focus on building resilience for future crises. What will happen when someone starts getting sick? Will everyone else start getting infected? Are you prepared to close your doors? Perhaps you can take several weeks off to try to contain the spread. All of this depends on you being proactive. Being prepared is key to staying competitive.
4. Stay
Focused On Key Issues
As we now know, the recent economic downturn resulted in the worst contraction in output since World War II. The pandemic highlighted existing problems and accelerated the pace of social progress. Governments have to pay attention to macro-economic developments and implement fiscal stimulus programmers to counter the drag. However, this stimulus must also be accompanied by sustained investment in public services and infrastructure to mitigate the impact of lower production and labor costs. One way of achieving both is by investing in technology rather than human capital. In this case, tech firms will invest in digital solutions that bring efficiency to processes and reduce waste. So instead of closing the door, we continue to operate as normal and provide remote assistance wherever relevant. This allows us to stay focused on improving productivity, whilst not jeopardizing employee welfare.
5. Build Back Better
The most important aspect of rebuilding is to create a mindset
shift. People will begin to see the value of learning more and collaborating
more, rather than being confined to an ‘echo chamber’. They won’t feel
comfortable engaging with others as much and as regularly, as they did before
lockdown. Companies that offer greater flexibility of working patterns and
flexible work conditions would also thrive. Building trust is critical, so
making sure colleagues understand the importance of maintaining physical
distance, wearing face masks wherever appropriate, wearing PPE and implementing
suitable workplace hygiene practices is key. If the leadership team understands
employees are not just valuable assets, but also the ones vital for society,
they will inspire a spirit of accountability, innovation, self-discipline,
creativity and persistence. Then everyone benefits from increased engagement
and productivity.
6. Take
Advantage Of Recovery Movements
Recovery will give a boost to sectors with strong recovery prospects. Those that aren’t performing as well will likely require support by governments to reopen and recover lost revenues. Businesses can leverage on local recovery efforts and seek opportunities where they can participate in initiatives to encourage economic resilience. Some examples include stimulating reopening through grants to small businesses affected by lockdown restrictions, providing low-risk jobs, and helping vulnerable groups gain employment. These sectors will be among the first to reopen and recover revenues, bringing a welcome injection of funds to companies that can reinvest and grow.
7.
Leverage Digital Technologies
The coronavirus pandemic highlighted that most traditional
manufacturing relies heavily on manual labour and repetitive tasks. At the same
time, many other areas of noncore activities have also opened up a variety of use
cases to digitally driven service and products. Whether through cloud software
integration or application management platforms, data integration is
accelerating and transforming the way businesses use IT resources and processes
to achieve competitive advantage. Technology is advancing faster than ever and
therefore can provide tangible results from improved efficiency. Thus,
companies should consider automating less manual tasks and streamline internal
processes to remove bottlenecks, thus improving accuracy and productivity.
Ultimately, the goal should be to deliver a leaner model that uses fewer
employees.
8. Seek
Out Innovative Partnerships With Government
Governmental initiatives are often lacking in scope and urgency
compared with other pressures facing companies today. As discussed earlier,
governments must play their part, whether providing direct support to help
companies remain afloat during recessions and maintain consumer confidence
post-COVID-19. Alternatively, partnerships between various sectors within the
economy, along with private companies, can further accelerate reforms and build
a stronger foundation for economic recovery. Similarly, many government
agencies and departments are eager to jump into action. When combined with
strategic alliances with other non-profit entities, they could act as catalysts
to spur innovative ideas and stimulate robust action.
9. Grow With Emerging Trends
The speed of change will increase exponentially in coming years.
Consider what technologies are changing and using them to enhance your business
today. Explore opportunities to outsource routine tasks, improve resource
utilization and improve operational efficiencies by leveraging emerging
technologies. AI and automation are fast growing and reshaping entire industries,
including finance, banking, insurance, foodservice, logistics, retail and
hospitality. Such advances in computing power and capabilities mean these roles
will become far more complex while increasing levels of interaction between
customers and brands will increase exponentially. Investing in technology
investments will ensure you’re ready for whatever lies ahead.
10. Look Ahead
Ahead of the next phase of recovery, it is critical to evaluate
current sustainability goals and benchmark performance against new targets.
Evaluate the relevance of sustainable supply chains and circularity initiatives
to help guide future decisions around procurement, inventory management,
materials sourcing, delivery, distribution, warehouse design and storage,
energy sourcing, and warehousing. Once the right priorities and strategies are
identified, develop realistic plans to meet them and implement continuously.
Finally, Analyse where these changes can lead to innovation and enable growth and apply these principles to your own business.
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