In the wake of the global pandemic that is Covid-19, comes the sober realisation that lockdowns are going to be the new norm for a while. With markets affected and individuals staying at home rather than out consuming products and services, what can your business do to navigate a lockdown?
At Forster Chase we have been thinking about what we can do in relation to our own business and how we can support our customers, especially those in SMEs that are typically under-represented. As a starting point we have come up with 5 steps that you can take to help your business manage through a lockdown and a free accompanying worksheet to help you plan your response.
1. Conduct a risk assessment and business impact analysis
Whether or not your company already has an existing disaster recovery plan, it is time to sit down and start assessing realistically what your biggest threats are going to be if the lockdown lasts 4 months, 12 months or 24 months. As no one expected the Spanish inquisition, so no one really expected Covid-19 and many UK companies will have been taken by surprise by the rapid change in policy from the UK government over the last 2 weeks to a near complete lockdown.
Your risk assessment and business impact analysis should be in-depth and cover some of the following. Alternatively you can also use the well-known PEST, STEEPLE or PESTLED analysis models. In addition we have provided a sample Risk Assessment and Business Impact should you require one.
o Which products or services will you not be able to provide as a result of the lockdown?
o Which products or services will have weaker demand as a result in change in customer habits?
o How could you change your delivery model to allow virtual delivery? For example the big film companies are going to set up a way that people can pay to watch the premieres of films online.
o What would you need to do if there is a 20% drop in demand for your products or services? Or a 40% drop or an 80% drop?
- Supply Chain
o Which products or services will you not be able to receive from your suppliers?
o What alternatives can you purchase instead or what alternative suppliers can you use?
o Are you able to invoice customers with all your employees working from home?
o Are all your clients now paying electronically instead of using cheques?
o If clients are starting to hoard cash could you offer them an early settlement discount to encourage them to prioritise your invoices over others?
o Do all your employees have access to IT equipment and other equipment that they can use to work remotely?
o Do they have adequate broadband speeds at home?
o Is the data secure for them to work from home? Have you got file sharing or document sharing software with user-specific permissions?
o Do they have VOIP phones if their mobile phone signals are poor?
o Do you have Skype/Zoom or similar teleconferencing tools set up so that your sales representatives can continue to make sales from home?
o Do you have CRM or similar software that allows them to record the work that they do?
- People Resources
o Will all your employees be able to work? Either remotely or on site?
o What could you do for the employees that are not able to work either remotely or on site? Can they provide their work in a different way or be re-trained to do something else in the interim?
o Do employees have outstanding holidays they can take if your workplace is shut?
o Are you able to help your employees claim SSP from Day 1 if they either have Covid-19 or are self-isolating as per government guidelines (as per the Budget 2020)
o Can you provide your employees guidelines on accessing the £500 million hardship fund as promised in the 2020 Budget?
- Emergency Funding
o What is the projected shortfall in revenue for your business if the lockdown lasts 4 months? 12 months? 24 months?
o Can you apply for emergency funding from the government business loans as announced in the 2020 Budget? Or emergency borrowings from a bank? Or issue company convertible bonds or loans from an investor?
o Can you utilitise the skillset of a funding specialist like Forster Chase Advisory to help put together an emergency funding package?
o What could be done with your existing premises/offices if the lockdown lasts a while?
o Are you able to find another way to generate money from your premises? Can you sublet it? Repurpose it? Cancel it?
o Are you able to ask your landlord for a rent holiday? Or a temporary rent reduction?
2. Determine Business Survival objectives/Plan
Once you have written out all likely scenarios, then rated them from most likely to unlikely along with the business impact, it’s time to come up with a plan of action to target each area.
The risk assessment can form the basis of an emergency meeting with the key Directors and members of staff within the business to address each area and to come up with contingencies for each scenario.
At the beginning, you want to keep all individuals in a brainstorming mood, so you should set the guidelines prior to the meeting such as
· There’s no such thing as a bad idea
· The more creative the better
· Come up with solutions as if time, money and resources were no object
If you are conducting this meeting in person, consider using 1 page of a flip chart per item to write down all brainstormed ideas. If you are doing this virtually you could use a mind mapping software like Lucidchart and have whoever is keeping notes share their screen with others using Zoom or Skype.
Once you have thoroughly exhausted all ideas, it would be time to start voting and whittling down to the most actionable and effective ideas. Just like the numerous talent shows on television, we want to go through every idea even if it is likely to be dross to get to the gold. Leave no stone unturned.
3. Assign roles and responsibilities within the Contingency Planning team
When the brainstorming is over and you have a reasonable action plan, even if some of the plan includes having to research more options, it is time to assign the actions to various members of the team. If you have a large number of employees consider putting together cross-functional teams to increase creativity levels and to ensure you have people looking at the issue from various different perspectives.
Set team leads for each of the action points/plans and a reasonable timescale and deadline for the next meeting to go over the results of the actions. Ensure you set SMART goals – Specific, Measurable, Achievable, Realistic and Time-Bound.
4. Test, Measure, Repeat
With subsequent follow-up meetings, it is essential to utilitse the learnings of LEAN manufacturing which later on leant itself to the LEAN start up and which became Agile and SCRUM within software development.
At it’s core, the LEAN/Agile/SCRUM mentality is not to come up with the finished product from day one, but to constantly tweak and improve upon ideas, measuring the success of each incremental improvement until you have a final product that is centered around the actual needs and demands of the client and not the perceived needs and demands.
For example, if you were to decide to offer an online version of your product or service or virtual delivery, if testing the idea on a segment of your customers you get the feedback that they would prefer the online version in a slightly different format (eg. Through an app instead of a browser based website), then don’t be afraid to tweak the original idea till you get to a product or service that your customer loves.
By keeping an open mind and not being afraid to start again or change details of the idea once you get actual customer feedback, you will ensure the best possible fit of product or service to customer and not be stuck with something that no-one wants or requires.
5. Utilise Experts
With time of the essence during a crisis such as a lockdown, it is essential to not waste time by making the mistakes that comes with inexperience. As per the well known quote from writer George Santayana and repeated by Winston Churchill, “Those who cannot remember the past are condemned to repeat it.”
Although the circumstances are new, disaster and crisis have struck before and rather than trying to find solutions on your own, you could utilise the wealth of knowledge from business experts and C-level individuals who have weathered the Credit Crunch of 2008, the early 1990s recession, the early 1980s recession and all the other crises in between.
Here at Forster Chase we have an impressive array of Non-Executive Directors, former CEOs, CFOs, COOs, CIOs and Heads of companies who can be available for a couple of hours or a couple of days a month to provide advice, suggestions and a sounding board for streamlining and crisis-proofing your business. During this time we will also be able to provide a limited amount of advice on a pro-bono basis.
If your business lacks the resources or knowledge to implement a crisis-recovery plan we can also provide advisors and consultants initially on a pro bono basis to assist you in doing so or temporary cover for key members of staff that might be on long term sick leave. Alternatively we are also able to advise on Emergency funding such as arranging temporary business loans through the existing 2020 Budget relief for CoVid19 or we are able to arrange convertible bonds that we can help you sell to investors from High Net Worth individuals to institutional investors.
Regardless of how you find help and assistance, the key is that assistance is out there, and smart management teams find ways to avail themselves of help so that they aren’t alone during these dark times.
For our Free Risk Assessment Worksheet and a downloadable version of this article, please click here.
STEEPLE Analysis https://ceopedia.org/index.php/STEEPLE_analysis
LEAN Validation https://thegreatness.studio/2018/lean-validation-cheat-sheet/
LEAN Startup https://designmodo.com/lean-startup-methodology/
Government Support for COVID19 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/872618/Covid-19_Budget_fact_sheet_FINAL__1_.pdf
About Forster Chase
The Forster Chase Group supports clients in the delivery of their strategy at various stages in the business lifecycle. We are strategic advisors, strategy implementors and M&A business advisors with a difference. We are sector agnostic having worked across a range of industries and asset classes thanks to our extensive board and chairman network.
When working with clients, we provide a full spectrum of services by using Forster Chase specialists within different disciplines. We have a strong mix of experienced consultants in Executive Search, Strategic advice and M&A, as well as Interim Managers who are former or current CEOs, CFOs, Chief Actuaries, COOs, CTOs, General Counsels etc who between them have worked across some of the largest companies in the world as well as in smaller start-ups or scale ups.
For more information on how Forster Chase can support you and your business please contact firstname.lastname@example.org,