Years ago, people battled to get in contact with each other. If a group of people gained knowledge on a certain topic, they could only share it with the people they were in contact with. As technology started improving, the world started changing. The globe started communicating and contacting each other very regularly. Most people are now global citizens and to board a plane to another country or continent is second nature. This new trend that opens the world to us, also comes with its own threats to society. Like internet viruses that started poking its head out when the internet was discovered a very real risk of international diseases spread by contact and interaction between people has started to emerge.
This article will help you design a business for the future that needs to be virus proof. In particular, a Corona proof business.
International currency revenue, local currency cost
The first step to any business is understanding your revenue streams and where they come from. When you are doing business in an emerging market, it’s very important to focus on the currency that the majority of your income is earned in. When international disasters happen, emerging currency and markets tend to fall as investors search for more conservative investments. If the majority of your income is for instance in United States Dollars or Euros, you will actually make more money when the local currency weakens. Your costs for at least your labour and rent component will be in local currency, thus you will receive more local currency for your Dollars or Euros.
In times of crisis, things need to change quickly and in a matter of days the way you were doing business for years does not apply anymore. Millennials are brilliant with adapting to change. They also understand technology fully and some of them prefer to actually work from home and have been doing so for a while. In previous articles on millennials I tried to get the older generation to understand millennials and allow them to be themselves within your current organization. If companies adapted to the millennial way of doing things early, they would probably have a lot less difficulty coping with the Corona lockdown.
Virtual office environment
In times of crisis like we are experiencing currently, the virtual office becomes very important. Previously the arguments for virtual offices were to save on fuel and rent or to miss traffic. Many people started exploring the virtual office setup, but in certain organizations they could not get past the fact that they did not know what each person did every second of the day. Currently the virtual office setup is not a nice to have, but the only way you are allowed to continue working during the lockdown. Companies should start to embrace this as it will become the way of the future and actually protect your company against future disasters.
A strong culture is probably the single most important factor any company should strive to have. Once you have the culture where people take accountability for their own responsibilities, you have a winning recipe and people can actually be anywhere in the world working towards a common goal. Culture starts right at the top of an organization and if the management of the company does not trust their employees and systems to perform under difficult circumstances, it will probably never happen. Focus on always building your culture and it will come in very handy in difficult situations.
It’s very important that any company strives towards multiple locations. The easiest would obviously be to have one office in a location that you feel safe and secure and focus on servicing your clients very well. Although this has worked for many people, it’s not a fail proof strategy as things always change. You might find that one of your major clients has financial trouble or that a number of competition companies have opened up in this area or like the disaster we currently have, they have a lockdown in a certain location. If one of your locations does not function at a certain time, your other locations would be able to carry the burden and help your company survive in difficult times.
Diversification on income streams
A very similar statement to locations discussed above would be the diversification of scope. In the current Corona virus lockdown, we are facing, most of the construction sites will be closed down. If you only had a construction business, all of your income would have stopped but your overhead cost would continue. If your company had a consulting or procurement arm for instance, that portion of your business would be able to continue and generate money while you weather the storm.
In the most difficult of times, new opportunities open up to expand and change your business. A good example would be that during and after this Corona disaster, a lot of companies would strive to digitize their business for the future. This would create a great opportunity to specialise in their services. Other companies might start to design and build respirators or hospital beds out of necessity, but this could lead to a whole new line of business and generate an additional revenue stream in the future.
Working as a team
Understanding the implications of not having all your employees in the same location is very important. It’s very easy to have everyone working from home doing their own thing but getting them to operate in a team from remote locations takes some management and the correct setup. Regular communication through video conferencing and making use of software that is designed to have people work together in teams helps a lot. Breaking larger teams into smaller teams also called scrums, could be a good way to ensure the work gets done with the needed support without crowding the virtual work environment. Teamwork will always be part of any business and needs to get a lot of attention. It’s also very closely related to culture and trust.
Focus on what you can do
In many instances, employees and managers of companies would get very frustrated with the fact that they cannot do the daily tasks they were planning to do. They would focus on this and never get past this obstacle in the road. By focussing rather on what you can do, you can solve problems that you might not have time to do during your normal routine. Identify the areas of your business that can still continue to operate and execute those areas very well. It might be that once you are up and running at full steam again, your focussed efforts in a certain area improved your business as a whole.
Come out stronger than you went in
While companies are forces to close their doors and only certain service offerings will continue to operate in a state of disaster, nothing stops companies from improving their internal systems and processes. Research and development as well as tendering for instance are areas that can continue that will have a real impact on the future of your business if done correctly. Many companies badly require a reset and improvement of internal efficiencies. This would be a perfect opportunity to do this and come back a lot stronger and ready for the action.
A business is only as strong as the customers it services. Customers should always be a very important part of your business, but in times of distress, it’s arguably more important than ever. Communicating to customers during this time will help sustainability after the crisis is over and it might even be that you gain a few customers from this whole process that feels their service providers did not handle the lockdown well. As sites and workshops close down, ensure you do everything in your power to help your customers as far as you possibly can and remember they are also in very difficult situations currently. This will build trust, loyalty and a strong relationship for the future.
A number of companies will have contracts with both customers and sub-suppliers or contractors, during these once in a lifetime events most contracts will have a force majeure clause that should be used if applicable. This protects the service provider as well as the clients. It should be done swiftly and in accordance with the contract. Communication between the different parties will have a big effect on getting this process smoothed out.
Even after implementing all of the topics discussed above, we should also be realistic about the situation. The chances that a total lockdown will cost your company a large amount of money is very real. You will have a lot of costs without a lot of income. From a cashflow point of view, you might only feel the pain a month of two after the lockdown. As for any unknown circumstance that’s outside of your control, you have to have insurance. Although there might be insurance policies that cover certain events, the chance of getting a global disaster covered would probably be low. The best way to ensure your company survives something like this would be to have an amount of money available that you could access when you need it. So, the next time you plan large dividends or splash money on items that not necessary, remember to rather save it for a rainy day.
Last but certainly not least, your employees are the single most important asset your company has. Helping them and ensuring they feel safe in a situation like this is of utmost importance. Times like this will grow lifelong loyalty towards a company knowing that you have their back when times get tough. You will have certain areas of your business where temporary staff will have to be managed and placed on short time, make sure your HR department handles this correctly and in accordance with the law. In times of crises the governments usually have a number of funds employees can apply for to help them through the difficult times. Make sure you communicate it well to them and help them with the process if you can. It will also be on each and every employee to help the company during times like this. Every employee should realize that the machine can only work if all the parts within the machine work together.
By introducing the topics discussed above into your business, you should be able to weather any storm. Remember that you should prepare for disasters in business and have a plan before it occurs. If you only want to start this process once the disaster happens, it will be a lot more difficult to implement.