Much has been written about the business response and reaction to the COVID-19 crisis — from managing cash and credit to improving risk management and developing business continuity protocols.
Throughout the pandemic, we have been in touch with many of our member committees. We always appreciate our volunteer leaders’ contributions — especially during times like these. Recently gleaned insights may help you identify opportunities to add value as your business begins to look ahead to the new normal.
In addition to risk management protocols, volunteers shared three key aspects of business viability: employees, customers and supply chain.
Treat employees as the cornerstone.
Putting the customer first is a common phrase and practice. But no business can effectively serve customers without effective employees. McKinsey presents advice from long-term investors, underscoring the importance of cultivating loyalty among employees, along with taking care of customers and suppliers.
Opportunities to add value include:
- Continuing work-at-home provisions for employees when teleworking has been effective.
- Widening the source of skilled resources to minimize reliance on a geographically concentrated workforce.
- Focusing on retaining higher-performing employees if cuts become inevitable.
Investment in technology platforms may be necessary to support teleworking. But these investments can generate cost-savings by reducing your real estate costs.
Many companies have already made significant strides in establishing a flexible workforce, but this pandemic will undoubtedly take things to the next level. New ways of working — Managing the open workforce provides valuable information about the best practices for managing performance and risk, including a series of thought-provoking questions in Appendix: Open Enterprise Toolkit.
Adapt to customers’ behaviour.
Changes in customers’ behaviour — as observed with online portals — have gone to the next level.
Between stay-at-home orders and retail stores being shuttered, consumers are ordering most items online — from groceries and toilet paper to fitness equipment. This will likely continue, along with the evolution of the direct-to-consumer business model. However, for many businesses, maintaining key business-to-business customer relationships during this time will be critical to long-term success.
To capture the most value from your customers:
- Assess where your company is and determine where you’d like the company to be in terms of digital transformation for the new economy. The time could be right to invest in software for enterprise resource planning (ERP) or customer relationship management (CRM).
- Accommodate customers when necessary, but stay focused on credit strength and ‘right-size’ credit lines. Consider using credit insurance or other credit tools to ensure collection.
While most companies are adept at managing product profitability, few have given due consideration to managing customer profitability. You can use the tool How to manage customer value to develop a complete picture of the value of individual customers and customer segments to increase profitability.
Create resilience in the supply chain.
From the limited availability of personal protective equipment for medical providers to overdependence on sourcing from any one country, supply chain disruptions have generated attention-grabbing headlines during the COVID-19 pandemic. With such an emphasis on cost during the recovery from the Great Recession of 2008, other supply-chain considerations may not have received their due.
These tools — treasury and cash management and value chain analysis — explain how to articulate an extended end-to-end value chain that encompasses customers, employees, business operations and suppliers, along with digitalisation and the broader context of social and ecosystem issues.