Once the shock of the coronavirus pandemic and subsequent lockdown starts to fade and crisis management programmes have taken hold, business leaders can turn their attention to the longer term.
There is time to re-evaluate operations and practices and ensure the business goes into the post-pandemic era in as efficient and robust a shape as possible. While it may be uncertain what the market environment might look like, or even when “normality” will be restored, leaders can take a range of measures in the interim.
Lockdowns have stopped most business travel and made virtual meetings more acceptable. Mike Skorupski, CPA/ABV, CGMA, a management consultant based in Denmark, expects a continued damper on business travel and wonders how relationships will be built and maintained in the future.
“Relationships have to be built for information to flow freely,” he said. With fewer in-person encounters at conferences and social events, it is worth considering how rapport can be fostered amongst colleagues or new team members who need to work together closely but do not have the opportunity to meet in person.
Telecommuting, or remote working, are likely to become more common, which raises questions about how much office space companies will need, said Duncan Brodie, FCMA, CGMA, director of Goals and Achievements, a UK-based training and coaching company that works with accountants. “What opportunities are there to be more space efficient [in your office premises]?”
Also, as a way to survive the lockdown, companies took out loans and many deferred payment of taxes such as VAT (UK sales tax), and PAYE (certain taxes on employee income) in light of the crisis. Their finance teams should draw up achievable repayment plans that won’t cripple the business in the recovery period, he added.
Seek out the opportunities
Times of great disruption and change yield opportunities. To take advantage of them, businesses need to think outside traditional boundaries, Brodie said. “What opportunities are there to generate cash flow more quickly?”
For example, musicians are finding new ways to reach their fans even though venues remain closed. They livestream performances from their homes. In exchange for a more intimate gig, viewers can donate or pay what they feel the performance was worth.
Similarly, if the business has projects in the pipeline that could be accelerated to generate an income, assign a team to bring them to fruition, Brodie suggested.
This period of disruption also offers a significant opportunity to digitalise end-to-end processes and create new business models and revenue streams, Skorupski said. For example, machinery manufacturers could create apps that enable clients and engineers to access performance data faster, without having to log into the manufacturer’s data centre. There would be a charge for the application, creating a new revenue stream. To take an example from the renewable energy sector, there is potential for wind turbine generator manufacturers to expand their use of mobile devices to access live turbine data. Faster access to the performance data, from anywhere, would enable technicians to predict future maintenance needs and schedule work accordingly. Anticipating failures and acting to avoid them reduces the risk of unplanned downtime and the associated costs to the customer.
Businesses considering adapting their business model should take into account changes in consumer behaviour that are expected in the near term, Skorupski said. After lockdowns lift, a “fear factor” is likely to linger among some consumers, prompting them to think twice before resuming old patterns. Companies whose business models rely on customers visiting their premises, such as retailers, gyms, theatres, and restaurants should consider ways to strengthen their online, virtual, or take-away and delivery offers into the medium term. A robust IT infrastructure to support this change continues to remain crucial, Skorupski said.
Digitalising end-to-end processes also offers an opportunity to reduce costs. By scrutinising existing processes, for example, you may identify manual activities that can be eliminated or automated, creating efficiencies, he added.
Given the number of scenarios to be modelled, finance professionals can make a significant contribution to identifying new opportunities, Brodie suggested.
Keeping staff engaged
Engaged employees are a vital asset in the post-pandemic recovery, so finding ways to maintain engagement in a remote workforce is another important step leaders can take. The same applies to furloughed workers, if the rules in your jurisdiction allow communication between employer and furloughed employees.
Providing suggestions and resources for professional development or broader personal growth, is one option, Brodie said. “If someone has always had an aspiration to learn an instrument or a language, why not see if there are ways you can support them to do that?”
Other ideas to maintain morale and a sense of community include a book group meeting over Zoom or a photography competition hosted on the organisation’s intranet. “The possibilities are endless,” Brodie said. “The more you can keep people feeling part of the family, the better.”
Whatever the “new normal” looks like, communication and relationship-building skills will remain an essential part of leaders’ armouries.
For a business to adjust to the new environment and thrive, leaders need to promote collaboration and teamwork, to get “everyone playing to their strengths and focused on what really matters. The absolute priorities, not what keeps you busy,” Brodie said.
Be conscious in your communication and check in with colleagues to see how they are doing, he added. “We need to be mindful and empathetic of others, because you don’t know what’s going on for them.
“Your formal and informal networks are probably more important now than they’ve ever been,” he said. In the customer-supplier context, “you’ll find out right now who you’ve got a relationship with, and who you’ve [just] got a transaction with.”
Such relationships can help iron out any delays in supply or payment commitments as economies start to recover. “You’ve just got to keep talking. If people reach out and speak, you can find a way. If they bury their head in the sand, then it becomes difficult. So, I think collaboration is something that’s going to be important as well.”
What can we learn from the crisis?
Organisations are slowly moving from crisis management to a new “business as usual”, depending on the status of the lockdown in their respective parts of the world. Once a path forward from the crisis is established, it’s important to ask how the business responded to the immediate change brought about by the pandemic. This learning can highlight actions required to make the organisation more resilient.
Invite feedback and insight from employees, for example, through an online survey, or ask teams to discuss their experiences amongst themselves and then feed the findings back to the rest of the company or division at a wider meeting, Brodie suggested.
Questions to consider include:
- How did business-critical systems hold up? Could staff gain required access? Were any of these systems exposed to undue risk?
- How effectively were people able to work from home? Are changes necessary to support more effective working from home? Do performance metrics and disciplinary oversight mechanisms need to change as more people work from home more often?
- What have individuals learned about themselves and their working patterns? Is training or equipment needed?
- Which aspects of the company’s culture have been difficult to replicate with everyone working away from the office environment (eg, trust, autonomy, ownership, collaboration)?
- Which activities or processes should be taken forward into the post-pandemic era, and which are no longer relevant or beneficial? Should the company continue business it switched to during the pandemic in pursuit of new revenue streams?
The lessons captured should be shared on a learning hub or other platform to provide important insights into how businesses approach change in the future, Brodie said. Findings that require significant action could be added to the audit committee agenda to follow up, he suggested.
Answers to questions listed above may raise additional questions.
Consider the speed at which the economic impact of the lockdowns hit tested companies’ risk management. That should prompt accountants to ask, “How does the business need to view risk differently going forward? How do we test our preparedness for these [black swan events] in the future?” Brodie said.
For more news and reporting on the coronavirus and how management accountants can handle challenges related to the outbreak, visit FM’s coronavirus resources page.
— Samantha White is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at Sabine.Vollmer@aicpa-cima.com.