Effective decision-making all too frequently comes down to being able to prepare for the unknown and the unexpected. Building a strategy that succeeds today is laudable, but to be able to design one that succeeds despite economic headwinds, disruptions in global supply chains and ever-shifting consumer demand is what truly sets a leader and their organisation apart in the market.
This distinction has been thrown into sharp relief as the Australian and New Zealand business communities begin to recover from COVID-19. The businesses that have emerged from the (hopefully) low-point of the crisis are those that were able to work resiliently, adapting processes, products and people to changing circumstances and finding new ways to support their clients.
A resilient organisation post COVID-19 will therefore be informed, future thinking and agile, ready to respond to the unforeseeable.
The importance of continuity
Underlying every business that has successfully seen off the initial shock of COVID-19 is a robust Business Continuity Plan (BCP). While not a new concept, the broad-reaching nature of COVID-19 has underlined the importance of a BCP for businesses of every size and in every industry.
The BCP’s most fundamental role is to reduce uncertainty. When crises strike, the immediate concern is for the continued viability of the business, as previously easy assumptions about everything from cash flow to supply chain efficacy and consumer demand evaporate. A BCP provides a map to help your team navigate this new world, often including concepts such as controlled messaging to stakeholders and support efficient response time, increasing the chances of returning to full production sooner.
Often, this certainty comes from clear chains of command. A BCP assists by drawing clear lines of responsibility, identifying who is responsible for strategic decisions such as discounting, running down stock, buying replacement raw materials, making staffing decisions, choosing new distribution channels or even focusing on different customers and products. Core metrics will be defined to help order and prioritise decision-making, measuring their impact on cash flow, profitability, brand value and others.
The scope of a BCP includes an initial emergency response period wherein key risks and components are identified in service of creating a full response plan. This is followed by a crisis management period where this new response plan is implemented, stakeholders are engaged, clients communicated with and financial and operational actions undertaken to secure the company’s position. Following this is a business recovery period under which these financial and operational actions are assessed and amended if required, and key longer-term objectives are defined and worked towards.
Looking beyond the recovery
A business continuity plan is just that – it’s a strategy to ensure that your business is able to operate in optimal condition within the context of the crisis. It’s at most a 12-month plan that covers the immediate post-crisis recovery. Just as an athlete who’s suffered an injury may change their training regime post-recovery to further strengthen that area and safeguard against secondary injury, work must be done outside of your BCP to ensure that your business is in the best possible condition to survive a crisis.
This inter-crisis risk management work is as vital as your BCP, allowing you to engineer the conditions under which it can be maximally effective. If your business has stabilised itself in the wake of the initial blow from COVID-19, it’s time to start this ideation process.
Writing for the World Economic Forum, Salesforce Senior Vice President Peter Schwartz identified understanding and appreciation of newfound uncertainties as the path forward for businesses. COVID-19 has exposed the weakness of relying on easy assumptions about how the global economy will function over the next quarter, leading Schwartz to suggest that resilience after the pandemic may look like recognising the inherent weaknesses in our supply chains and partnerships.
The all-consuming nature of the pandemic has many businesses drawing ideas of resilience that reduce their reliance on outside suppliers and partners, driving digital transformations that better enable remote working and increase their survivability with access to an unlimited international flow of people and goods, but each company’s journey will look different.
A strategic approach to risk management
Already Bentleys has seen many businesses implement these changes. Organisations across Australia and New Zealand have modified their business models to adapt to the challenging operating environment. Many of these businesses have not simply survived, but thrived, increasing market share by expanding online channels to market and protecting cash flow by bedding-down operations while taking advantage of government support.
These are decisions that will have lasting impacts beyond the immediate recovery, helping these organisations emerge into the new normal stronger and more effective than ever. When the next “once in a lifetime event” presents itself, they will be ready.
Do more than just hope for rebounded consumer confidence and wait for a return to a normal that may never come. Start proactively building success for your organisation in a post-COVID-19 world with help from Bentleys.
We, at Bentleys, are doing everything we can to help businesses come out of this challenging time in good shape.
We will continue to update our COVID-19 resource hub with important developments, so please return soon.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.