COVID-19: Where to from here? An approach by Shaun Maitre
Words such as unprecedented, global crises, economic meltdown and societal change have become commonplace in describing the current COVID-19 Pandemic and it is difficult to retain any sense of positivity while being bombarded by evidence of governments and health systems failing to cope with a disease where there is no certainty as to when this may come to an end and a sense of normality will again resume.
What does seem clear is that only a vaccine can effectively end the crisis and that “normal” will be something different to the past. How do we prepare for this new future that beckons?
Firstly, we need to accept that change has already occurred. Two prominent South African business leaders state it clearly:
“People speak like this is just a blip, but I don’t think it is anything like any of us have ever seen before….It is an entire RESET of our Economy” – Johann Rupert, REMGRO
“There will be a large number of small businesses and large enterprises that go under. None of us know how long this will last but, I imagine we’re looking at between 18 – 24 months before we START TO RE-EMERGE. And that’s being OPTOMISTIC.” – Mteto Nyathi, CEO, Altron
What CHANGES should we anticipate?
- Our Economic model will become one of Revised Capitalism. This will demand enhanced social consciousness from individuals and companies, greater State interventions (more red tape) and a real need for cooperation between business, government and labour. Unemployment will rise dramatically and there will be increased pressure on the State to step in and assist however, a diminished tax base will make this increasingly difficult.
- Investment styles will tend to be risk averse where companies with low debt ratios (gearing) will be favoured
- Business Models need to move away from the hierarchical towards flatter structures where high levels of agility and innovation are required. The Workplace will include more remote operations, less travel and social distancing at work.
- Product focus will initially be on essential products including Food, Security (Health products), IT (Communication) and the Supply Chain.
What does RESET look like and how do we ensure we can RECOVER?
We have developed a simplified Business Action Plan to map out the different stages businesses need to go through to create an opportunity for recovery and growth.
In South Africa, we are currently REACTING to the virus. Some companies have scrambled around trying to find short term solutions and create longer term survival strategies, others have tried to continue as normal and an alarming number have simply gone into hibernation hoping to emerge after the storm and to pick up from where they left off.
The following diagram precis’ a suggested strategy to move our businesses from REACTION to RECOVERY where the key to our RESET is to take time to RETHINK the way we do business to ensure we remain relevant in a vastly different socio-economic environment.
In a few more words, these steps are:
C CASH FLOW – Chase Debtors, Negotiate with Creditors, Cut Costs and make use of Government grants, (such as TERS) and easy loans
O OPERATIONS – Trim ruthlessly to CORE business (following 80:20 rule). Talk to customers – understand their current situation and plans.
V VISION – Perform an honest Business Health Assessment and then Create a New Strategy.
I IMPLEMENTATION – Assemble the most effective CORE Team (Trim excess). Assign specific strategic tasks and responsibilities to individuals.
D DEVIATION – Realign your Strategy to suit changing conditions. Critically assess SUCCESSES & FAILURES quarterly and ADAPT the strategy accordingly.
19 19 MONTH PLAN – December 2021 REASSESS the Economy and your market in particular. Create new growth Strategy for implementation in 2022.
As the anagram suggests, and in a truly South African spirit, the COVID-19 pandemic should be viewed as a great opportunity to rethink our businesses and the manner in which we transact. It provides a window to reform the areas where we always knew we could be better and to remove those obstacles that have been impediments or frustrations in the past. This period of history indeed allows us to push the RESET button but determination, agility, creativity and above all, great personal courage will be required to turn this crisis into the bright prospect it can be.
Shaun Maitre is an independent consultant to Go Four IT (Pty) Ltd. He works with a small professional team to assist Business Owners to find the space required to focus on their core business by creating a stable platform from which to develop new strategies for exponential growth.