Business resilience – four learnings from SMEs’ response to COVID-19
The last few months have been challenging and surreal in many ways. For businesses, tough calls have had to be made, often with imperfect information at hand. I’ve been privileged to have had the opportunity to be part of the Deloitte team working alongside NZTE to support many New Zealand businesses in building resilience and developing business continuity plans.
These are my top four learnings for businesses ready to respond, recover, and finally, thrive in the face of adversity.
#1 – Diversification is key
It might sound like Business 101 but having some form of diversity in your business makes it easier to shift focus away from products or services that will suffer from weakened demand. It will also tilt your energy towards other offerings that are relevant and aligned with your customers changing needs.
Diversity doesn’t necessarily mean having a portfolio of business units that do different things; it could mean having multiple channels through which you sell your product, or different models of revenue, or a diversified brand strategy that allows you to target customers at different price points within your addressable market. It could also mean geographical diversification so you’re not over-exposed to a single jurisdiction, or ensuring you have customers in different segments and sub-segments of industry. Think about what type of diversity you need in your business and create a pathway to achieve it.
#2 – Digital is the new normal
Analyse every critical process within your business and consider whether it is digitally match fit. That means considering whether it can operate in an environment that relies on information being readily available in real time, no matter where you are physically. Think about what systems you rely on, where information is stored, how accessible it is, how it is kept current, how you collect data, and what you do with that data. Reflect on how easy it is for your stakeholders to connect with you, including suppliers, customers and employees alike. Also cast your mind towards traditional business development and marketing initiatives like road shows, trade shows and exhibitions, and how you can use digital tools to reach those audiences in a world of reduced or restricted travel.
The world was already shifting towards more digitally enabled business. COVID-19 has just accelerated that. Businesses that resist investing in their digital capability right now risk being left behind and forgotten in the next normal.
#3 – Get close to your customers and listen to them
Knowing your customer has never been more imperative. In the aftermath of moving to Alert Level 4 at relatively short notice, many businesses were anxious about what they would do if their revenues came to a grinding halt. To be fair, no business owner would expect to face that situation so abruptly.
Knowing how your customers are reacting and how their behaviours are changing could make the difference between survival and failure, but how will you know what they are thinking if you’re not talking to them? Many organisations developed customer engagement playbooks, stratifying their customer base to identify their priority and strategic customers, and ensuring they engaged directly with them in a personalised way. From there, they identified customers’ specific needs and re-engineered their own product development and revenue models to achieve greater cut through, and more rapidly. Sending a generic email to an entire customer database has its place, but consider when it makes sense to take a more tailored approach.
Other firms, including some that have B2B business models, took to social media platforms to get to know their end consumers better and to foster a sense of community and comradery with their brand. One of the most valuable learnings I had was seeing how some business owners found innovative ways to ask their customers what it is that they wanted, without making it feel like a survey, and then channelling that feedback that into their response plan, whether from a marketing perspective or even the product development programme.
#4 – Look out for opportunities
Have an open mind, imagine your business on a blank sheet of paper, and use this opportunity to make changes that you may have been deferring or delaying because you were simply too busy doing business. For instance, I came across several businesses that realised that their staff were more productive when offered more flexibility, or that their sales team could cover many more leads in a day if they used virtual meeting platforms instead of driving around.
Other businesses who had lost staff shortly before the lockdown and hadn’t replaced them found that remaining staff members stepped up and took on added responsibility, not only resulting in empowerment opportunities but also embedding greater efficiencies within the business. Some businesses also revisited their CRM data and reflected on the merits of re-engaging with customers they had not heard from in years.
The ability to identify opportunities is also necessitated by having a degree of agility within your business. If you can’t move quickly to take advantage of a gap you see, there’s almost no point in spotting the gap. We worked with one business that was able to develop a solution for retailers wanting to offer a click and collect service, and another that developed an app that allowed employers to seamlessly obtain employee consent in relation to applying for the Government Wage Subsidy.
A dynamic and rapidly changing environment will inevitably create opportunities but only those who are actively seeking them, and have the agility and courage to pursue those opportunities, will succeed.
To find out more about our Business Continuity Workshops and other related support programmes, visit our website. You’ll also find insights and guides into important initiatives, from the Wage Subsidy Scheme to the Business Finance Guarantee Scheme.
I have spent most of my career supporting clients achieve their capital agenda through M&A. This has included raising funds to drive growth, introducing new shareholders as part of a succession plan, selling part or all of the business as part of an exit, forming a view on valuation, and executing due diligence on acquisitions.