To help you build business resiliency as we battle with COVID-19 and anticipate future disruptions, we offer these seven recommendations to start working on now in your business or organization.
It’s hard to fully comprehend the breadth of the health and economic consequences of the global crisis triggered by the COVID-19 outbreak. What started as a single case of exposure in the populous city of Wuhan in the central Chinese province of Hubei has triggered a cataclysmic ripple effect permeating nearly every health, financial, and economic institution throughout the world.
While COVID-19 has indiscriminately infected humans all over the globe, it has also indiscriminately left businesses of all sizes reeling in the wake of shelter-in-place orders and the closure of non-essential businesses.
While some are furloughing employees and negotiating forbearance agreements with commercial lenders, business owners are also trying to adjust their business models in real-time and manage remote employees. Vulnerability and uncertainty have become the new normal.
As organizations and firms continue to navigate these turbulent and unchartered waters, we believe the following seven recommendations will not only help mitigate the disruption of the current COVID-19 situation but will also increase the resiliency and preparedness of your organization for similar situations in the future.
Promote and protect your people first.
Ensuring the safety and well-being of employees in the workplace is critical to business resiliency. It is not only the highest responsibility for most firms and organizations, but people are looking to their employer for guidance in times such as the COVID-19 pandemic. Addressing employee concerns in a transparent manner will put them at ease, mitigate against easily avoidable staff issues, and further ensure business continuity.
Leadership at firms and organizations should also take affirmative steps to promote the mental health and well-being of their employees.
Assess and triage the financial health of your organization.
Outside of your people, cash is the most important asset your firm or organization can have during a time of crisis. COVID-19 has forced many firms and organizations to cut non-essential expenses and scale back spending; the diligent ones will continue this effort beyond COVID-19.
After the COVID-19 crisis stabilizes, your cash flow and business modeling need to include variables to account for public health, natural disaster, economic downturns, and other crises. Ensuring that your firm or organization has six months of cash reserves or other highly liquid assets should be the minimum target.
Liquidity is the only way to hedge against banking and financial-service disruptions in a crisis. In addition, government programs such as the Small Business Administration Economic Injury Disaster Loan program and other programs authorized under the Coronavirus Aid, Relief, and Economic Security Act such as the Paycheck Protection Program are riddled with bureaucratic red tape and unpredictability.
Extend and embrace remote working.
The COVID-19 pandemic has been labeled “the World’s Largest Work-From-Home Experiment,” an experiment that is likely to become at least partly a new normal. Guidance from international and national health organizations—followed by orders from most governors in the country—made “social distancing” a requirement, forcing many firms and organizations to either offer remote working to employees or mandate it.
Cloud-based communication, data-storage solutions, online project-management tools, web-based document-management products, and advanced web-based data-analytics tools allow firms and organizations to operate from virtually anywhere. In addition, remote working lessens the need for office space, which reduces employment-related costs for many firms and organizations.
Post COVID-19, all firms and organizations should consider adopting or extending remote working policies, which will both enable employees to continue practicing social distancing and allow for more flexible work schedules. These policies will benefit certain employees and will facilitate the transition for future shelter-in-place scenarios or other crisis situations where employees cannot physically return to the office.
Invest in technology infrastructure.
While working remotely can reduce some costs and create operational efficiencies in the long run, technology and infrastructure upgrades may require significant capital outlays in the short run. Remote workers need the proper tools in order to be productive from home. Investing not only in laptops and other hardware, but also in secure cloud-based tools will ensure business information is more accessible to those who need that information while protecting against hacks and accidental data loss.
In addition, firms and organizations should think through who controls key business information, given that many people will have that data offsite, sometimes on their own devices. When it comes to who can access and control contracts, executed distribution agreements, corporate organizational documents, or company tax returns, you’ll need a system in place.
In situations similar to COVID-19, every firm and organization will have people who need access to this information, and if it’s housed by a third-party service provider such as a law firm or accounting firm, management should have a plan for getting those documents to the correct staff members.
Integrate training redundancy into employee onboarding and continuing education.
More than anything, COVID-19 brought to light the need for employee-training redundancy. As critical employees either became infected by the virus or had to care for a family member that became infected by the virus, firms and organizations were left scrambling to execute business functions that only one person may have known how to handle prior to COVID-19.
Developing redundancy training into employee onboarding, continuing education, and key job functions is one way to bolster business resiliency by mitigating the disruption caused by employee absenteeism.
Adopt a thoughtful business continuity plan.
How exactly you go about creating your business continuity plan will depend on the size of your company, but the basic steps are to:
- Perform a business impact analysis. If a crisis hits and you can’t get the office or lose vital parts of your infrastructure, how does that impact your company?
- Determine your recovery strategies. How do you “fill the gaps” if you can’t get to the office, or you lose a warehouse, or your supply chain is disrupted?
- Develop a plan. Build a framework for your business continuity plan and assign the teams that will execute different parts of it.
- Conduct exercises prior to any real disruption to see if any unanticipated problems turn up. Rework the plan based on that feedback.
Engage in the process.
In the wake of COVID-19, as has happened before with natural disasters and similar disruptions, federal and state regulatory bodies relaxed compliance-related rules and regulations. After Katrina hit the Gulf Coast, for instance, a variety of changes for tourism, casino gambling, and even alcohol policy came in its wake. And while policy minds debate the necessity of certain regulatory requirements, it’s important to realize that (a.) things are likely to get back to some sort of “new” normal, where hopefully we learn from some of the extraordinary circumstances we’ve lived through and (b.) that your expertise and engagement as an entrepreneur can help that process along.
As we come out of COVID-19, it’s a good time to assess your involvement in industry and professional associations, as well as local business and leadership groups. Politicians and policymakers will be particularly open to creative solutions that address new problems that we didn’t anticipate prior to this crisis. Unlike “normal” times, they may even be deft and flexible in their implementation of new industry standards and regulations that will affect your future ability to grow and make a profit.
One of the keys to business resiliency, whether in the face of a global pandemic or day-to-day cash flow challenges, is moving from “what if” to concrete action. Sit down and writing out your challenges, brainstorm possible solutions, choose a course of action, and then execute on that plan will not only move you closer to success, but it’ll help bring you peace of mind.
With both short-term survival goals and longer-term growth goals set, and a plan to tackle them, you’ve got a foundation for taking on whatever the world throws at you and your business.