How to weather the second wave – Advice from BDC
The COVID-19 pandemic has taught us that even in volatile times, it’s possible to maintain business continuity, boost your competitive position and, for some, even grow.
And while most businesses had to adapt on the fly earlier this year, this time around you can turn to the good habits you adopted and lessons learned during the first wave to get your business through the second wave.
Keep these five areas of your business in sharp focus as you navigate this ever-changing business environment.
1. Prioritize the health and safety of employees and customers
Many companies introduced ad-hoc safety measures in response to the first wave of the pandemic. These new security measures are even more important for a second wave.
To formalize these plans, start with a quick assessment to see what’s working now. Map the daily routines of employees and their interactions with clients to understand how to employ best practices to keep everyone safe. Think about your physical space, how clients and employees interact with one another and how to limit contact.
Arrivals and departures: Consider staggered entry times and other protocols. Employees or clients may need to call to announce their arrival prior to entering a building, for example. Have handwashing or sanitization stations at the entrance. In some cases, businesses have hired security people or assigned an employee to manage the door at high traffic periods.
Shared spaces: This includes elevators and walkways, but also kitchens, bathrooms and meeting rooms. Set guidelines for using these spaces. Visual cues, like spacing markers on the floor and instructions on cleaning the microwave, can help reinforce safe behaviours. Stagger employee breaks to maintain physical distancing.
Workspaces: If employees cannot maintain two metres (six feet) of distance while working, physical barriers between workstations may be required. Establish protocols for wearing masks and consider extra hand sanitizer and hand washing stations.
Cleaning: High-touch areas, such as doorknobs, washroom facilities, elevator buttons and shared kitchen appliances or workstations may require regular cleaning throughout the day.
Communicating health and safety protocols
Use a variety of tools to maintain constant communication with employees and customers. This includes posters and visual cues like floor markers to remind people of daily routines. Emails, newsletters, website pop-ups, instant messaging, scheduled meetings and verbal reminders can all help relay new information and reinforce health and safety messages and protocols.
- Assess communications tools you use now and measure their effectiveness.
- Determine how to communicate COVID-19 self-screening protocols and reporting methods.
- Plan ways to alert employees to new procedures or an outbreak.
- Clarify two-way communication tools. How can employees or customers report a health and safety concern or have their questions answered?
Many people are presently feeling “pandemic fatigue,” where they are starting to get tired of the safety measures and relaxing their guard in following them. For the workplace, this could translate into employees not following the regulations set out by employers. It’s important that you continue reinforcing the importance of following these rules to make sure your employees remain vigilant.
How human resources can support employee well-being
To support employee productivity and wellbeing in a volatile work environment, clear and ongoing communication is essential.
- Remote workers need regular communication and feedback to avoid feelings of isolation. Check to ensure employees have the tools to do their jobs effectively.
- Establish objectives or goals, rather than requiring at-home employees to be at their workstations for a traditional 9-5.
- Reinforce roles and responsibilities within the company and consider partnering employees or cross-training to allow coverage for sick days.
2. Assess sales and operations plans to secure cash flow
The second wave will likely have important effects on customer demand and supplier availability may change. Keep a close eye on customer needs so you can quickly scale operations up or down, depending on market requirements.
Your sales and operations teams need to work together. Hold daily meetings to assess performance, forecast demand and avoid overproduction. These meetings can be short check-ins that help you stay on-track and adjust quickly.
Develop sales forecasts to gauge customer demand
Create various sales forecasts to consider how production and sale of your products or services need to be adjusted to account for slowdowns, changes in customer buying behaviour or demand.
Maintain regular contact with clients to understand their experiences and help you anticipate their future needs. Frequent customer input allows you to modify products and services, assess future production costs, alter your distribution plan and adapt your marketing plan to better generate leads.
Stay in close contact with your suppliers. A second wave of the pandemic may cause volatility that disrupts supply chains. Understand inputs and inventory and consider diversifying suppliers or delivery methods to avoid business interruption.
3. Get a handle on your working capital
If you haven’t already done so, now is a good time to get a handle on your working capital, money you need to maintain day-to-day operations.
In normal times, there is a continuous flow of cash coming in from receivables, as payments flow out to suppliers for materials and inventory. This allows you to replenish inventory on a continuous basis to support sales. In disruptive times, however, that flow could suddenly be stopped or slowed.
Although you may have taken on new debt to replenish stocks or rebuild working capital, now is not the time to overextend. Instead, think about how to create a comfortable “cash cushion” that can help you weather a second shutdown.
Keep a close eye on your cash flow
Beyond keeping a cash buffer, you’ll also want to track cash inflow and outflows and shorten your cash conversion cycle. Consider the following:
Slow down payments to suppliers: Meet with suppliers to discuss deferred payment terms. If you currently pay accounts within two weeks, try to negotiate four weeks without penalty. This gives you the option of keeping cash on-hand longer during a slowdown.
Speed up collections: If you’re waiting for customers to pay, your cash flow can be hampered. Consider shortening payment terms for your customers, adopting new technology to help with collections and changing processes to collect faster.
Finally, create a rolling cash flow forecast and keep it updated so you can avoid a cash crunch.
4. Embrace digital technology and e-commerce
Businesses that invest in digital technology are more productive and typically see accelerated revenue and profit growth, according to BDC research. The pandemic has furthered this trend as customers flocked to online stores and service providers during the shutdown. Increasingly, people expect to conduct business online.
Embracing digital technology will not only help you weather the second wave, it will also help you remain competitive in the long term.
Going digital doesn’t have to be complicated. Start with a solid foundation. From there, you can build complexities into your digital strategy over time.
Create a functional website: Your website is your online storefront. Start with basic information like your business profile, a section showcasing your work or products and contact information. Gradually add features that allow customers to order directly through the website, conduct returns or interact with your brand online. Track and measure online performance to make incremental improvements that reflect customer experience and feedback.
Invest in digital marketing: Reach out to customers through online channels by developing a social media and email strategy. This will boost leads and sales, help you access new markets and improve your customer service and response times.
Equip your employees with the right tools: Cloud-based project management software, shared cloud storage and secure video conferencing capabilities are a few basic tools that can help remote teams work productively.
5. Stay agile and adapt your strategic plan
It’s clear volatility is here to stay until a safe and efficient vaccine is rolled out. To help navigate the uncertainty, review your strategic plan with a special focus on various scenarios and risk assessments.
Understand changing customer needs: Consider offering a new product or service, or adapting what you already offer, in response to changes in customer demand, like the clothing and textile manufacturers that shifted to local mask production as global supply dwindled. Connect with customers regularly so you can stay on top of new requirements.
Build resiliency into your cost structure: The new ebb and flow may mean ups and downs in production. Consider how fixed costs can be shifted to variable costs to allow more flexibility. Examples include outsourcing or using contract employees rather than taking on new employees, renting equipment instead of buying, and choosing established distributors over new investments in your own sales channels.
Nurture your network: Partnering with other companies to share technology, create robust sales, marketing and post-purchase nurturing can help keep costs manageable and allow you to pivot quickly as the economy shifts.
Be agile: The new change management environment demands incremental changes. Establish daily, weekly and monthly targets for business development or operational changes, and regularly assess progress, so you can change course without putting the business at risk.
