IT has become challenging for most businesses to keep their financial wheels turning during the lockdown period due to less revenue and the general uncertainty in the global financial environment. Hit by the COVID-19 slump followed by social distancing and a nationwide lockdown, businesses are experiencing the major impact no matter how established they are. Indeed it is a sink or swim phenomenon and organisations need to re-look at how they manage and operate their business, including re-visiting their business plan and strategies.
The economy is not exactly reliable and business today is not what it once was. Zimbabwe is currently going through a tough period economically. Nonetheless, small businesses are particularly vulnerable as they often do not have enough reserves to help them through this difficult time. Unfortunately, the impact on startups or small businesses can be way more brutal as they have scarcer cash reserves and a smaller margin for managing sudden slumps. The ripple effect of this shutdown will have a key impact on Zimbabwe’s economy, as all business sectors get affected, resulting in low revenue generation due to an eventual halt/slump on the sale of products and/or services.
Nearly every business is feeling the impact from this COVID-19 pandemic. It’s affecting every nation, it’s known that countries which were striving will be affected more. During such times companies should be swift in making decisions that will make them survive before they sink. When it comes to figuring out just where to make cuts in our businesses, organisations should think long and hard before they act. Organisations are supposed to prepare for times of uncertainty and HR managers have to play advisory roles and offer advice on how organisations can come up with post-COVID-19 survival strategies.
Many, if not all, business leaders have lost control of how and when they will operate as they used to do before the pandemic. It is impossible to know when we will get back to what is likely to be a new normal. While there are many things we cannot control, we can work to deliver our business values now and plan for the time when business opens up again. The following are strategies we can consider for our organisations.
Determine your lockdown operating model
This might mean that you cannot operate and, therefore, you must manage costs carefully in the interim. It is crucial to assess the new and changed priorities of your customers and identify how the business can meet them in a way which does not cause the spread of the pandemic. New customer priorities include the ability to get their hands on goods and services with as little human contact as possible. For now, choice and promotions are less important than safe supply, product availability remains an important factor than brand selection. Many are also offering free delivery and price incentives to maintain some cashflow and keep a relationship with their customers.
Tracking expenses against the revenue status
During this contagion, it is of utmost importance for businesses to conduct a proper assessment of their fixed and variable expenses as well as the actual revenues. This assessment will give a clear picture of where a company stands financially and help the entrepreneurs in planning ahead in the current disconcerted market. This strategy can be implemented even when the pandemic effect settles. Businesses need to strategise, communicate, and act with compassion. They require a revision of sales revenue goals and product timelines along with a new operating plan. In that case, entrepreneurs and leaders will have to keep the communication transparent as much as possible with their investors and employees.
Controlling and managing unnecessary costs
Cost controlling is the practice of recognising and reducing business expenses so as to increase profits in organisations. It is the responsibility of HR to assist in trimming organisational expenses, at the same time coming up with strategies that ensure the going concern of the organisation. Boosting productivity without increasing costs requires a combination of employee development programmes and process improvements. HR professionals can utilize a number of tactics to cut HR costs before it becomes an issue, and this can be done without sacrificing employee satisfaction or threatening employee retention.
Introduce workplace flexibility models
It is likely that all businesses will see significant change in their operations post-COVID-19.
Businesses that thrive after lockdown ends will have refined their strategy, redefined their operating model and linked it to an accurate and flexible workload model that helps them thrive in the coming months after COVID–19. Businesses that understand the importance of right-sizing their teams and closely matching resources deployed to demand such as call centres, account management and sales support operations for sales teams and service administration functions will thrive.
Work on refining your value proposition
Value proposition is a complicated principle that can be defined in numerous ways, but it basically boils down to three things which are; what your company offers, what users will get from your brand as well as why your company is the best choice. During times like this, even the company’s customers can react in a negative manner towards the goods or services you offer. They will be looking for products or services that solve their problems or improve their situation as well as deliver specific benefits to them. In such times, organisations should consider value addition or other propositions they can combine with product/service offerings. The reason is that during uncertainty, it is hard to convince people to spend money.
Recapturing consumer’s confidence in the company
Consumers are loyal to companies that have a good reputation. When consumer confidence is high, consumers make more purchases. When confidence is low, consumers tend to save more and spend less.
With the recent COVID-19 pandemic, a lot of companies found themselves struggling and having to cut on both salaries and employees, due to declining profits and productivity. This kind of picture does not reflect well on the reputation of any company, especially to the consumers. On the contrary, this may kill the confidence consumers have in the company even if it’s a disaster.
However, despite all that, it is possible for companies to still have consumer confidence back, provided that these companies start performing the way they performed before the crisis. This can be done by developing new product and service options, packaging products and services differently as well as innovating around your customers’ concern. Let it be known that those who keep and make their customers happy in these times will enjoy the benefits later.
Take care of your key talent don’t pass the burden to them
During periods of uncertainty, there is less money to go around. Normally jobs are put at risk and earning capacity is often reduced considerably. In such times HR needs to establish key people, key roles and put in place retention and engagement mechanisms to maintain the financial viability of your business. This is the important time for HR as it has to make sure that it assumes an advisory role in the business at a strategic level such as decisions on how best the company can protect clients and employees etc.
During these stressful times, your company is very vulnerable to talent poaching and staff turnover for critical staff. You must stay in touch with your talent so as to be able to effectively manage this crisis. Managing through volatile periods requires that human resources be prepared to support an ever-shifting business, at the same time managing costs for organisations.
Emmanuel Zvada is a global award-winning HR practitioner for 2020, HR disrupter and trusted coach. He writes in his personal capacity. For comments, inbox or call +263771467441.