The second wave of the COVID-10 pandemic that experts warned about has finally dawned, arriving on humanity’s doorsteps at the tail end of 2020 and ensuring that 2021’s business cycle would begin with the world plunged into more uncertainty.
Once again, governments across the globe are actively seeking to ensure the health and safety of their populations. This time around though, it seems more than not that the global economy will not survive a second total lockdown especially as the same economy is still yet to recover from the first one.
Prior to now, business analysts and experts had published a vast trove of information on how best businesses can prepare for a second wave of the pandemic but in truth, the level of uncertainty facing employers and employees alike is appearing more predicated upon a customized approach of matching measures to situations as they unfold. Considering that the immediate response to the first wave of the COVID-19 pandemic for many businesses across the world was to batten down the hatches, and cut any extra cost, this manifested in job cuts, salary cuts, suppliers unpaid, rents and assets unpaid, and more; all of which, while conserving short-term cash flow, may also have set many businesses up for later problems. The knock-on impact on the market has not been positive, and the rapidity with which everything happened left most people scrambling to catch up. Nobody could have foreseen the entire lockdown, the abrupt loss of cash flow, or the contraction of business early enough to have prepared adequately for it.
Then, as responses became more organized and impactful, the world entered into a new normal of remote working, a restructured supply chain and a reinvented stakeholder management. While this is ongoing, experts worry still that enough may not have been done to prepare for this second wave which may be even more difficult to cope with than the first wave, because many businesses are still yet to find their feet after being knocked over.
While the first wave taught us that even in volatile times, it is possible to maintain business continuity, boost competitiveness and even grow, one of the most important lessons learnt is adaptability – businesses have had to adapt on the fly shedding old habits and learn new ones. To survive this second wave even as Vaccines are planned for deployment, there are key areas that businesses should focus on in this ever changing business environment:
Prioritize the health and safety of employees and customers
Many companies introduced ad-hoc safety measures in response to the first wave of the pandemic. These new security measures are even more required for a second wave and must be systematically institutionalized in order to ensure appropriate protection in the work place.
Assess sales and operations plans to secure cash flow
The second wave will likely have effects on customer demand and supplier availability may change as experienced during the first wave. It is therefore important to keep close eye on customers’ needs so that operations can be quickly scaled up or down, depending on market requirements.
Get a handle on your working capital
In normal times, there is a continuous flow of cash coming in from receivables, as payments flow out to suppliers for materials and inventory. This allow businesses to replenish inventory on a continuous basis to support sales. The first wave showed how this can be disrupted and also showcased the importance of having a comfortable “cash cushion” that can help businesses weather a second lock-down.
Embrace digital technology and e-commerce
Businesses that invest in digital technology are more productive and typically see accelerated revenue and profit growth, as we all witnessed during the lockdowns following the first wave with people patronizing online stores and service providers. Embracing digital technology will not only help you weather the second wave, it will also help you remain competitive in the long term.
Stay agile and adapt your strategic plan
Clearly, volatility is here to stay until the majority of the population is vaccinated. To help navigate the uncertainty, businesses need to review their strategic plans with a special focus on various scenarios and risk assessments. Businesses must understand changing customer needs, build resilience into their cost structure, nurture their networks and be more agile.
The first wave of COVID-19 taught the business world a lot and engineered this new reality that humanity is now living in. While some still feel there is not much reason to panic, the uncertainty of these times is enough to make business owners view 2021 with some trepidation. Be that as it may, in the end, only the optimist who believes the best of all possible worlds faces the times we are in with hopeful confidence.
To a healthy dose of optimism this 2021.
Excepts culled from The Entrepreneur and the Business Development Bank of Canada
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