Several. That’s the number of COVID-19 / Coronavirus related emails I’ve received from companies giving me updates on their stance and preparedness for this unprecedented global event. I don’t mind receiving them, and some of them contain genuinely useful information. But the content of 90% of them is pretty much identical. Businesses are preparing by increasing hygiene, implementing work-at-home policies and in some cases, relaxing terms and conditions for their customers.
In this post, I want to have a go at giving you a more detailed framework for how you can mitigate against the economic impacts of this situation. This will be reflective of many of the things we’re doing here at McTimothy Associates, but I’ve also tried to generalize the advice to make it applicable to as many people as possible. Everyone’s situation will be different, and I know that this post won’t be applicable to all, but I hope it will help a few people to at least better frame their thoughts on how to tackle this problem.
You need a COVID-19 Strategy
I think that people have realized that the virus is going to have a negative impact on the vast majority of organizations. Smaller to medium-sized business will as usual feel the pain faster and harder than larger ones. But larger businesses arguably have more opportunities to mitigate due to the diversity of their resources, so a strategy for them too is equally important.
For clarity, let me just say that in this article I won’t be covering basic strategies like:
- Improved hygiene to protect your employees
- Effective work-from-home processes
- Basic customer communication strategies
Whilst incredibly important, I think that pretty much all organizations have gotten their heads around these things by now (if not, do that first, then come back here!), or at least talk our Consultants here
The way that you go about creating your own COVID-19 strategy should be pretty similar to how you would any other strategy. That is that you should following a simple strategy model that includes at least:
the Objectives (outcomes) that you want to achieve, supported by
the Projects (actions) you’ll be implementing to get there and
the KPIs (measures) that you’re trying to positively impact.
Obviously, you’ll need some kind of system to track your strategy and bring it to life. If you already have one, great – if not, this article might as well help you to successfully do so.
If you don’t want to use strategy software, you can at least make a start in good-old-fashioned Excel. Either way, do not make the mistake of keeping your COVID-19 plan to yourself. Involve as many people as possible, as soon as possible.
Focus Areas to mitigate your business against COVID-19
A quick note, I’m only addressing the economic impacts of the virus in this post, not the health impacts. Every business needs to have a health-related element to their strategic plan, but that’s really not for me to comment in this post and since the situation is different for everyone, you may need to assess the severity of what has happened in your State.
I’ve picked out 3 Focus Areas that I think are helpful in the preparation of your strategy:
- Right-size the business
- Reposition your product/service
- Redesign your marketing & sales funnels
I personally believe that the impacts of COVID-19 on the business world will be far longer lasting that most people currently assume. But funny enough, not necessarily in a bad way. A lot of the Projects that you’ll probably implement as part of your COVID-19 strategy are probably things you should have been doing anyway. A solid strategy now could actually move your business forward in the medium-long term rather than simply setting it back by the value of the sales you will likely lose over the next few months.
Let’s take a look at the specific Focus Areas that I think you should be planning around:
Focus Area #1 – Right-size your business
Let’s not beat around the bush here, COVID-19 is going to suck. Sales will go down in line with market confidence, and you need to ensure that your cost structure is set up appropriately to offset this. This first Focus Area is frankly about survival, and there are going to be some really difficult decisions to be made to set up your business to weather this storm. Worst of all, you cannot hesitate in making these decisions – you need to trust your gut and take steps to cut costs where needed pretty much immediately.
Here are some of the strategies that you might want to implement in this Focus Area:
A customer-facing workforce that is commensurate to current demand – Objective
- Review and make adjustments to sales headcount – Project
- Review and make adjustments to support headcount – Project
- Review and make adjustments to marketing headcount – Project
- Reduce overall wage costs by 15% – KPI
I wanted to get this one of the way quickly. Reducing head-count is one of the hardest and most unpleasant things you have to do in business. But your ability to make fast decisions now about people who either aren’t pulling their weight, or who won’t be able to pull their weight in the near future (due to the virus), will actually protect the majority of your people in the medium to long term. I’m absolutely not advocating the use of COVID-19 as an excuse to make headcount reduction, but if there was ever a time to be decisive about right-sizing your business, it’s right now. The best you can do right now is to outsource those non-core, non-critical functions to an outsourcing agency you can trust.
Right-sizing your business isn’t just about headcount though, there are other ways to reduce costs without hurting your opportunities to grow:
Minimized investment in non-essential systems – Objective
- Reduce non-essential software subscription costs – Project
- Change annual subscriptions to monthly if renewing soon – Project
- Eliminate/reduce office costs (e.g. staff kitchen) minimum – Project
- Achieve cost savings of #500,000 per month – KPI
There are lots of ways to save costs in your business. But don’t forget that cost saving isn’t the only thing you want to achieve. You also want to start thinking about minimizing your cash flow outgoings over the next few months, even if in the long term that means spending more money. When it comes to survival, cash is usually king!
Our final set of goals when it comes to right-sizing involve ensuring that you’ve minimized the amount of account receivables owed to you. After all, you won’t be the only one trying to reduce costs, your customers might be too.
Significant improvement in accounts receivable – Objective
- Create an accelerated A/R process for debts – Project
- Create an incentive program for early payments – Project
- Reinforce your value-proposition of product to all customers- Project
- Reduce outstanding debts to less than #100,000 – KPI
Focus Area #2 – Reposition your product/service
In the Focus Area above, I talked about reducing costs to a minimum. Inevitably, that means reducing spend on anything that could be considered a luxury or even a non-necessity. The flip-side of organizations following that advice, is that your product or service could fall into that luxury or non-necessity category, unless you do something about it.
This will of course apply differently to different businesses. Toilet-paper companies are sitting pretty at the moment as you’ve no-doubt read in the news. Whereas fine-dining restaurants are absolutely ****ing themselves (and with the toilet paper situation as it is, that’s an even bigger problem than usual).
So the question is, where does your product or service fall on the necessity – luxury scale? Here are a few strategies that you can implement:
A marketing strategy that recognize COVID-19 – Objective
- Determine current perception of our product/service – Project
- Decide on which elements can be re-positioned as ‘necessity’ – Project
- Implement revised marketing in all key channels – Project
- Maintain website / foot traffic 100% – KPI
We’ve seen some great examples of this recently. For some organizations like remote working tools such as Slack and Zoom – it’s a piece of cake. But we’ve also been impressed by the revised marketing I’ve seen from my local walk-in grocery store (converted to home-delivery service), Uber Nigeria can also reach out to big super stores (like Shoprite, Spar –Park n Shop etc) to offer home delivery of online ordered items to deliver at Customers doorstep via registered Drivers whose information is already on Uber’s database (‘Don’t it’s not possible, disruption don’t wait for your biases).
Be careful not to just focus on new customers though, you’ve got existing customers that you also need to persuade of your value in these difficult times:
Current customers maintain interest and use of our product/ service – Objective
- Send customer communications describing how product helps in current situation – Project
- Offer extensions/bonus features to help them even more – Project
- Offer targeted support on how to use our product/service in most effective ways – Project
- Maintain customer usage levels at 75% – KPI
You’re going to have to go above and beyond in ensuring that customers remain engaged in your product/service. That might mean accepting lower margins and giving away features or extras that would normally be reserved for higher paying customers. Not only do these kinds of projects help you to retain customers, they also help your fellow businesses and people to get through this difficult time. Here at McTimothy Associates, we’ll be offering customers free workshops, close to zero fee webinar/virtual training courses to help them plan their own COVID-19 strategies, survive these trying times, manage their people, their businesses and succeed during and after Covid-19. And you know what? The feedback has been very awesome, they are linking it, requesting for more, asking for specific help to their businesses.
Focus Area #3 – Redesign your marketing and sales funnels
Our world will be changed by this event no doubt. Some businesses will fail, some will survive but may never be the same. Others will survive, consolidate and then flourish – perhaps be even stronger than they were before. One of the biggest changes that I think will never be reversed, is the accelerated shift to digital interactions that this virus has forced us into. It is a big disruption. That covers everything from how people shop (online delivery networks will be strengthened and will likely remain that way), to the way people interact with healthcare (doctors are now tele-doctors/telemedicine, and that will probably also continue even after the virus situation abates). How people work (flexible and remote working/team) cost reduction measure like outsourcing will be the best business strategy of this time, and of course these will help businesses to survive and thrive
The way that your future buyers and customers interact with your business will never be the same again. For some businesses, that’s not a major shift. SaaS software providers are already almost entirely online businesses, with face-to-face interactions mostly limited to conferences and high-value accounts. But for some businesses, the shock of this change to faceless interaction will be massive. Physical commerce as always comes to mind, but this change will also affect entertainment (streaming services up, cinemas down), professional consulting services (old-school accountants have started embracing Zoom).
How are you positioned for this change? Here are some strategies you might want to consider:
Rapidly accelerated adoption of digital marketing – Objective
- Benchmark our current digital marketing KPIs – Project
- Identify best-practices in digital marketing for our industry – Project
- Hire a digital marketing expert – Project
- Increase digital marketing leads by 50% – KPI
Even if you think you’re in a good spot regarding digital marketing, remember that your competitors will all be massively raising their game in this regard too. We talked a lot about right-sizing your business and reducing costs, but this is one area where additional investment is almost certainly prudent. If in doubt, start by hiring an expert in this space, even in a outsourcing capacity to help you get started or manage the process.
Digital marketing is just one piece of the equation though. How about:
A digital-first sales strategy commensurate with the times – Objective
- Train sales teams with digital tools, materials and content to succeed – Project
- Adjust pricing to accommodate businesses/people with cash-flow issues –Project
- Implement sales strategies to businesses/people who are less impacted – Project
- Maintain sales volumes at 80% – KPI
You need to get creative in how you sell your product/services, and accept that your customers won’t be willing/able to shell out a huge amount of money upfront. Flexibility in your business model could be the difference between survival and failure.
The next 6 months will be hard for everyone – but could also be the best thing that ever happens to your business.
I want to finish on a note of genuine positivity. As the CEO of McTimothy Associates Consulting LLC, I’ve been through the same emotional roller coaster as almost everyone else has over the past few weeks. There have been times when I was fearful, and times when I was very optimistic. But the strategy spirit in me revived, and I picked up valiantly, now seeing results for myself and team.
But right now, I’m feeling only two things regarding this situation. Resolute, and…..positive.
You may well wonder how I can say that right now, at the same time as outlining the measures above – some of which are drastic, all of which are hard. But the thing is, so much of the strategy I’ve suggested above, is stuff that we (and maybe you) should have been doing ages ago anyway! The virus has taken away any excuses, any ambiguity and any room for delay. We (and you) have to make our businesses stronger, whatever that entails. And when this situation starts to normalize, I can’t wait to unveil the new McTimothy’s Better-way, of doing business but still smiling 😁.
To your success…..
Tayo is the Group Managing Partner/CEO at McTimothy Associates Consulting LLC, a prolific management and human capital consultant. At McTimothy Associates, we breaths and live strategy, organisation development, human capital management, and capacity building. Your success and greatness is our mission.