It’s no secret that the market has changed, and today it is no longer possible to work like yesterday and get the same results. Some companies shrank and stopped in complete fading, someone continues with the same activity, and someone looks to the future and boldly invests in new directions.
But how can you benefit from this situation? What should you focus on? What processes to develop and what investments should be discarded?
PwC consulting agency conducted a survey of 2,084 companies that emerged from the crisis in 43 countries and identified five key areas that business should focus on today:
Crisis management and response
A crisis is an experience, the most competent and flexible will survive.
If you already have experience overcoming a crisis, you are like an experienced pilot who can land a falling plane. 69% of managers already had the experience of working in a crisis, 53% of respondents claim that previous experience allowed them to acquire the necessary skills for action today.
At the same time, 74% of leaders resort to the help of external specialists at critical moments. lack of expert knowledge threatens to misunderstand the signs of “falling”, wasted time for assessing risks and looking for new opportunities. Therefore, attracting professionals to minimize losses and adapt to changes becomes the best solution.
Who should be responsible for crisis management?
Identify who “owns” the crisis: Board members and department heads should be held accountable for their respective roles — preparedness, response, recovery, communication.
In this interaction, the participation of the leader is extremely important for resolving controversial decisions and setting priorities.
Whatever changes are happening now, one thing is clear – you need a strategy for action after COVID-19
The worst thing you can do now is not to notice the problems, to expect that everything will pass and nothing will change. Focus on what is happening, analyze the situation, and simulate several types of scenarios: negative, average, and positive. Thus, you will ensure predicting events and prompt response when correcting actions.
Reallocation of finance
As business activity slows, many industries are seeing a decline in revenues. Cash flow management is critical. Today, working with finances can be compared to a hot air balloon that needs to release its ballast to stay in the air.
- Assess the impact of the pandemic on your livelihood and reevaluate it in response to market changes.
- Identify financial and operational leverage that can be used to conserve and generate cash.
- Develop flexible ways to respond to potential transformation.
- Allocate resources to meet customer requirements.
Human resource management
Workforce requires special attention to building effective work processes in a renewed environment:
Review the HR strategy, ensure the safety of personnel, and eliminate health risks for employees.
- Expand the possibilities of remote work, debug new processes of control and interaction with personnel.
- Talk openly with employees about the action plan.
- Communication will help to overcome the period of uncertainty and stimulate making the right decisions, even if the staff never had to go into crisis mode.
- Involve experienced colleagues in solving local problems, revising the rules for interaction with clients, partners, and other stakeholders.
- Encourage a transparent exchange of knowledge and experience, involve staff in experimenting and looking for perspectives.
The consequences of the outbreak of COVID-19 are difficult to assess and model, any predictions are like trying to guess the course of events. But understanding global scenarios will help enterprises structure their decisions. Based on the research results, Nielsen identifies six stages of consumer behavior in the case of coronavirus:
Stage 1. Active health care
In society, an interest is formed in products that support good health and well-being (vitamins, immunomodulatory agents, etc.).
The need arises with the following markers of COVID-19: the focus of media attention on the first cases of the disease associated with the movement of citizens from infected countries.
Stage 2. Conscious protection against the virus
Priority is given to products that help contain the spread of the virus and ensure the safety of external contacts (face masks, antiseptics, etc.).
COVID-19 markers: the government approves programs to protect the health and safety of the population, the virus spreads locally, and news of the first deaths appears.
Stage 3. Reserve purchases
The population is stocking pantries with essential goods and a wider range of medicines, which causes a surge in-store traffic, increased demand, and an increase in the consumer basket (cereals, canned food, shelf-stable products, and household chemicals).
COVID-19 markers: the introduction of quarantine measures in connection with the spread of the virus, the closure of borders for entry from abroad.
Stage 4. Shopping under quarantine conditions
Increase in the volume of online purchases, refusal to visit stores due to growing shortages, disruptions in the supply chain.
COVID-19 markers: Local emergency response, school, and public closures as the proportion of diagnosed patients continue to rise.
Stage 5. Life in conditions of restrictions
Strict quarantine restrictions gradually accustom society to a new way of life (remote work, learning) and stimulate a significant transition to online due to the reduced range of goods and price increases due to high demand in the previous period.
COVID-19 markers: massive cases of the disease, authorities are actively calling for self-isolation, restrictions are being introduced on small gatherings of people and shopping trips.
Stage 6. Adaptation to the new reality
Gradual abolition of quarantine measures, return to work, training, a short-term surge in activity in the previously inaccessible sphere of entertainment and services. But the consumer is emerging from quarantine with new habits: there is a shift in favor of online orders and delivery, attention to health and hygiene (hand and surface treatment) remains for some time.
COVID-19 markers: after the peak, the incidence is declining, the government authorities are introducing quarantine relaxation in order from the least to the most affected regions, adaptation, and a gradual return to normal life.
Obviously, the stages determined by Nielsen are enlarged and in each country, the processes can develop according to their own scenario and with their own frequency, but global indicators show that in many countries news about COVID-19 has fueled the demand for the purchase of stocks, which is confirmed by the research of 4service Group in which the transition of people to economy mode is monitored since 54.5% of respondents lost their main income and the possibility of additional earnings, only 11% at the time of quarantine had a financial cushion. But despite this, when planning expenses under quarantine conditions, respondents talk about an increase in spending on food, medicine, and basic necessities.
Businesses must keep pace with demand and plan resources to meet needs
- Assess shifts in demand for the next period, predict an increase/decrease in consumer baskets depending on your industry.
- When planning, identify alternative supply chains, involve local suppliers and carriers.
- Reserve necessary purchases for uninterrupted work now and at the time of the release from quarantine, if necessary, notify suppliers about the load.
- Implement the possibility of online orders and delivery with minimal contact between the client and employees.
- Form alternative channels of interaction with the audience, rely on mobility – the PYMNTS survey showed that 19% of orders are in quarantine, were made using smartphones.
- In the face of declining demand, generate promotions and special offers, attract customers with the prospect of savings.
37% of companies highlight various forms of refusal to purchase due to slow adaptation and unavailability of business for transformation: the impossibility of remote consultation, delivery, ordering online. This indicates that the consumer will choose the most flexible and ready for improvement.
Strategy and Brand
As entrepreneurs move from responding to the elimination of consequences, customer engagement strategies will be in focus:
- Redefine the digital transformation timeline as the move to telecommuting and online engagement reveals gaps in workforce planning and the need for improved software qualifications.
- Pay attention to market changes and competitors’ actions.
- Communicate with customers even during breaks, remind of yourself, create informational reasons for contacting the brand: be active on social networks, send useful information, announce the launch of new sales channels, opening dates of outlets, etc.
- Keep your finger on the pulse of customer preferences, consider long-term prospects and adjustments to business models. Expectations research and innovation testing can help you avoid high costs and identify effective solutions. Focusing on the consumer in today’s situation is crucial and master of information, master of the situation.
- Close service gaps and strive for seamless service delivery. Today’s brand experience builds customer loyalty in the future. According to Nielsen’s research in China, following the coronavirus outbreak, 37% of those surveyed who were previously willing to give priority to a little-known brand because of the attractive cost are now prioritizing previous experience and product quality.
We will all eventually return to the pre-COVID-19 lifestyle, but with new preferences. And subsequently, a change in habits is possible, because the longer the self-isolation environment expands, the more new rules take root in our lives, and this creates opportunities for flexible business.
The crisis creates unique consequences, penetrating into every layer of the organization, and affects both internal and external processes. But understanding the dynamics of how the situation will affect your organization and drawing up an action plan to prevent and minimize the consequences is an integral part of stabilization.
53% of companies surveyed by PwC claim that they have already become much stronger, and 43% after recovering from previous crises have taken more advantageous positions in the market than before. Remember that the chain reaction of tipping points can not only do harm but also identify gaps in processes that will set you up as a starting point for growth and better results.
About the author
Melisa Marzett works for writing services assignment writers as an essay writer and is a former journalist, a traveler, a healthy eater, and sports enthusiast.