22 Apr 2020, 09:30 — 13 min read
COVID-19 is unprecedented, as the world has been claiming. SME sector is deemed to be severely affected by the current situation. Some experts are already predicting normalcy returning by 2022 or beyond. This all adds to pre-existing slowdown. Many factors add to this accepted wisdom. Some of the key ones topping my list:
There is no other way than taking COVID-19 situation as it is and getting ready for the life after. Many Small and Medium-sized Enterprises (SMEs) would have gone through various changes; however, the changes are different, this time around. Normalcy or recovery seems somewhat unnerving as the epidemic has been intimidating due to its sheer potency, uncertainties and no visible cure. Standing today, the psychological burden is enormously compounded by all that naysayers’ talk.
What makes the situation slightly comforting is the part that all SMEs are in the same boat. Given indomitable human zeal and entrepreneurship, life and business shall totter back to normalcy.
I can think of different leadership styles and business trajectories, which most of the SMEs shall adopt after this lockdown. They may even restart their journey on one path, and scale up or down to another. The trick, as usual, shall lie in how well they are prepared, how many layers of details they build into their plans, how futuristic or contemporary they plan to become, and the diligence with which they implement and execute these plans.
Given the future challenges, most of the SMEs shall become one of the following.
One truth shall prevail as it always does after such meltdowns. Tough, resilient, reskilled, rejigged and prepared businesses, whichever terms you may ascribe to those, shall take lead over others. They shall capture a larger share of the shrunken business pie. Getting business shall need some more mental and physical work, but shall not be improbable.
Though we cannot do much for ‘Dinosaurs’ we have been fine-tuning distinct approaches for the other types. We have started supporting one ‘Maverick’ and a ‘Specialist’ each to ‘Bounce-Back’ after this hiatus.
Following are some of the things which we have been doing or ready to do with entrepreneurs:
As the lockdown is extended things are more beyond one’s circle of influence. Looking at it with an optimistic lens, this could be the most opportune time to work on catharsis as well as rejuvenation. This is the time when we can do effective cleansing and be lean. We can engage in activities that we are unable to do during normal business times. Routinely we do not feel the need, or we tend to manage without this spring cleaning.
This is also the time to have those design thinking workshops, innovation sessions and of course, business re-engineering that we always dreamt about but pressing demands of daily business prevented initiation of. This is the time for creating winning strategies and war-room planning so that we are ready when the war starts. It might sound intimidating and complicated, but is simple when planned well with experts, similar to climbing Mount Everest.
1. Daily brainstorming sessions and work for the management team to ensure that team members are sincerely involved in:
a. Planning and improvement of business – They are still paid employees of the organisation giving quality hours for business, without regular distractions of day-to-day work.
b. Developing good plans on improving current processes and practices – Generation of innovative and progressive views on how to take their respective departments forward. That shall help in building a business plan for the year and forming their KPIs.
c. Re-engineering activities, for example, engineering, production and product management teams can be tasked with new product ideas and design changes in the existing portfolio to bring cost efficiencies and/or increase production efficiencies. Finance teams can be tasked to work on various aspects of risk mitigation considering the worst-case scenario.
d. Building processes wherever gaps exist
e. They have practical and detailed execution plans in place to start as soon as the work resumes
f. Generation of ideas for new products:
g. Arranging for requisite pieces of training for teams. Training, doing which has always been difficult due to unavailability of members. Training can be –
2. Building business plan for multiple scenarios anticipated soon after
3. Building new project plans and forming Cross-Functional Teams (CFTs). They plan during this time, work on what can be done WFH and be ready for implementation after lockdown.
Many of these all activities help them achieve two things:
As the lockdown gets over, SMEs should work towards setting business benchmarks, invest their time in creating an evolved response strategy to counter any business losses and maintaining the share of business as it was six months back. SMEs need to focus on reinforcing and maintaining the business structure before hopping towards any growth or scaling plans.
Create ways for faster payment recoveries and lower the outstanding payments. It is highly recommended to rehash fair payment terms with suppliers and vendors for smooth transactions and better serviceability, as they are also facing the same issues as SMEs. The payment terms should be fair and ethical for both, business owners as well suppliers and vendors.
While making money for your own business, SMEs should also be aware of their vendors, suppliers, and clients. Revamp your current business models to reach more customers, without incurring any extra investment.
Reinforce your business and start production.
Implement cost containment and think about prudent ways to spend your money/capital. This should not mean mindless cost-cutting or firing employees, but initiate smart cost management options.
Ensure managers take good care of their respective teams. It’s time for them to be like ideal mothers, affectionate, caring but strict disciplinarians to ensure enhanced productivity.
During this phase, invest time in identifying broken or missing pieces of your current business model.
During this phase, SMEs should focus on building new business and expanding into newer markets or clientele. They should work towards launching new businesses and products while aiming to conquer newer geographies. They should also look for revamping current resources to accommodate expansion. SMEs should also undertake deep studies to build revised and adaptive business models for the future of the industry.
There are action points in the above ideas, which the SMEs must have done by now or should start immediately. These solutions are targeted to address the common points faced by each and every SME/Micro, Small and Medium Enterprise (MSME). Connect with experts/advisors to receive more industry-specific solutions needed to revamp your business after the lockdown.
A ‘bounce back mindset’ is the one with the ability to recognise unique circumstances. Circumstances that make even known challenges hard to resolve using generic solutions and past instances. ‘Mavericks’ and ‘Specialists’ shall understand the challenging conditions and unique surrounding circumstances. They build the ability to determine whether, over known tools, they need to design unique solutions or call upon catalysts to find answers.
The list of action points goes much longer based on the industry, as each business has its unique DNA, characteristics, and environment. So, each organisation needs careful insights to build plans which may stand tests of time. To reap benefits out of these solutions, SMEs should create plans in black and white, should detail those to the last T for better implementation.
Image source: shutterstock.com
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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.
Posted byNavneet Gautam
I took up full-time Management Consulting and Business Coaching for SMEs, after successful stint in leadership positions with MNCs & large companies, After producing good...
Finance & Accounting 5 days ago