Leading Family Businesses Through Mega Crisis
The pressures in managing business after a crisis of such unprecedented proportions can hurt the interest of your business if one is not adequately prepared for it
The lockdown imposed due to the COVID-19 crisis is gradually lifting. Businesses are once again starting their operations and will be getting back to normal, though the grind is likely to be tough. The pressures in managing business after a crisis of such unprecedented proportions can hurt the interest of your business if one is not adequately prepared for it.
Almost everything has been shut for over two months now. Starting all over again is going to be the biggest challenge that businesses will face. Commencement of operations that follow rules set by government authorities such as social distancing and still ensuring smooth delivery of products and services will demand a new strategy. With only a fixed number of workers/employees allowed in offices and institutions will call for a complete change in methods and policies for companies.
A slowdown in economic activity seems unavoidable. But businesses which can respond quickly to this situation by thinking differently will clearly be the ones to get out of this situation faster. It will be prudent to split the workforce into two shifts. This will not only ensure adequate social distancing while at work but also no loss of overall manhours. No loss of productive time is an advantage that may come with a cost though. It may push up the cost of operations but then, giving up some margins will anytime be preferred than running into losses.
Family Businesses Face a Greater Challenge
In India family-run businesses have been a vital part of the economy right from the beginning. In fact, a large part of the MSME segment is run by families. MSMEs in turn are major contributors to the overall economy. The principle challenge that smaller family-run businesses face is the lack of skill sets to substitute the ones that have become vacant due to migration of people back to their home towns. It will be important to acquire multiple skills so as to fill in for non-availability of people. Looking for the right kind of talent to substitute can be a long-drawn process and hence training internally to look after certain functions will be a better idea for businesses.
Focus on the Present
Continuity of business is the biggest challenge today. Many of the hitherto drawn up plans will have to be changed given the present situation. One way to ensure workable business plans is to have shorter duration plans. Normalizations of the business environment will not be as simple and fast as one would want it to be. A complete change of approach will be the demand for businesses to survive in the post-COVID era. A 360-degree approach will have to be put in place for every aspect of business including operations, demand-supply chain management, and more importantly to keep the workforce motivated. Drawing up future business plans two quarters at a time will be a more reasonable approach.
Build an Emotional Connect
A very important need of the hour is to be emotionally connected to all the stakeholders including employees, suppliers, contractors, etc. The fear of loss of employment or a customer is reeling on many. Constantly communicating with all the relevant pillars of business will be important to understand the perspective of each of them and act accordingly rather than take decisions unilaterally.
Have Fiscal Discipline
This is one of the most important measures that businesses will have to keep in mind. Big spending plans and expansions will have to wait for at least for a year. Conserving available cash will be very important till cash flow positions improve. Strict budgets will have to be laid out and followed religiously. More and better use of technology to bring down overall costs will be a good thing to do for businesses. Investing in areas such as research and development, and sales will be very important. Avoiding unnecessary debt traps will save a lot of trouble in times of constricted cash flows.
Digital Will be the Way Forward
The lockdown until now has for sure led to one conclusion—go digital. Human interface, wherever possible has been replaced by the digital fence. This will be the real way forward. Businesses will need to go digital with as many processes as possible to ensure automated and seamless business processes. Currently there are many tech-enabled solutions available to businesses for an array of functions including expense management.
COVID-19 has managed to unsettle businesses the world over. Most may see this complete breakdown as a major disruption which may take a long time to normalize. However, all is not lost. The period of the last three months that has seen zero output in certain cases will have to be put behind and measures to restart and gain momentum as discussed above will have to be put in place. All said, a more human approach will be required going forward to come out of the pandemic successfully.