Operational agility and resilience during COVID-19
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Business is currently anything but usual in so many industries around the world. The threat posed by coronavirus to global health and world economies has required countless companies of all sizes to markedly shift their operations.
While there is a risk to many businesses’ outlooks, the pandemic has also elicited altruism, innovation and collaboration from multiple corners of the UK’s business community, worthy of celebration.
Some of the country’s supermarkets have put an arm around their suppliers, moving to same-day payment of invoices to ease cash flow pressures on SMEs and protect their operations. Michelin-starred restaurants have embarked on home delivery – with some feeding NHS staff for free.
Perhaps the best example of operational agility can be seen in the NHS Nightingale hospitals taking shape in cities across the UK. They have been built with alacrity almost alien to the construction industry, where project timescales are traditionally at the mercy of procurement negotiations around design and cost.
For many businesses, however, the operational challenges are not so grand but no less pressing.
The move to 100% home working has been a subtle shift for the more agile organisations. But for companies yet to invest in mobile IT equipment, or unable to do so due to the nature of their operation, it has been more disruptive.
Asian-headquartered shared services, in particular, have taken a hit – one which is being felt by many UK businesses. Organisations which have off-shored their finance or customer service departments in countries such as India or the Philippines are now facing real disruptions to business continuity.
Management of the pandemic in these regions is creating significant operational challenges for outsourcing providers and in-house shared services. This work is not easily transferable to home, due to the scale of staff affected, shortages in moveable IT equipment and data privacy legislation in contracts which require sensitive customer data to be handled in a specific location.
Across the board, companies are taking stock of existing operations and questioning whether they are fit for purpose as business starts to move to the new-normal in the coming months.
Below are a few recommendations and questions that may be useful for you to consider when safeguarding operational agility and resilience.
Mitigating risks to business continuity is a primary concern during the outbreak. Issues and challenges need to be recognised and dealt with rapidly. Controlling the cost base to create headroom is prudent.
The ability to react in real-time requires an accurate understanding of the current situation to make decisions quickly. Management information and cash flow data must be accessible and up-to-date. A rapid increase or decrease in demand makes financial forecasting, inventory, capital and cash flow management critical.
Ensure you understand the potential impact of the pandemic by moving quickly to assess how your operations, including those serviced by third parties, will be affected. The more you can plan for and mitigate the unexpected, the more likely you will be ready to meet any challenge.
For businesses that are unable to make meaningful shifts in operations within the weeks the UK is likely to be in lockdown, the time can be well-spent understanding what future changes to their business model may look like when the country emerges from the pandemic.
Companies who have previously spent heavily on commercial office space in multiple locations may now be assessing whether their business model can work just as well online, without that outlay. The pandemic has removed geographical barriers to trade and some may find access to a wider customer base in areas that they’d previously not considered, that could lead to longer-term growth.
Don’t be afraid to make imperfect decisions to reduce your cost base and protect the business. Define the key decisions you have to make and ensure that you have the best management information possible to support them.
It’s important to accept that not all choices will turn out to have been the right ones once the pandemic is over. The requirement to react swiftly to comply with changes in government guidance or meet shifting customer demand has become almost real-time in many industries.
Restore and reimagine
The current market conditions caused by the outbreak are temporary, although likely to have long term ramifications for the global economy. Once the crisis has passed, businesses that have refined their business plans now are likely to recover more quickly.
For some businesses, COVID-19 may simply have hastened an operational restructure, or an evolution in the way they do business, which had been planned for the near future.
Many pragmatic businesses which have recovered from the initial shock are now looking at how they can not only be resilient in the current climate, but also plan to be more efficient and profitable in a post-pandemic world.
Questions to consider
Do you have the right, timely management information to make critical decisions?
How volatile is customer demand and how flexible is your cost base?
Are you sufficiently prepared for shortages and price volatility for your resources to outlast the pandemic?
Does your technology infrastructure and network have the capacity for your whole team to work from home at the same time?
Are your communication channels sufficient and do your employees read and understand what you send them?
What does employment support or restriction look like in each country you operate in? How are you communicating differing policies with a globally-connected workforce?
If you require strategic advice and support during this challenging and unprecedented time, please don’t hesitate to contact our team here.