In this uncertain environment, now is the time to conduct a strategic review. Brian Crowley explains how in four key steps.
Life and our professional lives have changed fast in the last few weeks. In order to plan for the future, we need to assume that it could be the end of the year – or even later – before we return to ‘normal’ (although we can continue to hope otherwise). No doubt you will have plans in place to provide ongoing support to clients, employees and other stakeholders, while keeping a close eye on your cashflow. Your business continuity plan should ensure that you continue to comply with all legal and regulatory requirements. However, it is time to conduct a strategic review.
Develop strategies in waiting
The usual starting point for an organisational strategic review is fleshing out the elements of a future long-term vision of success. But these are unprecedented times and the usual rules don’t apply. The best you can do, and should do, is develop a number of possible future scenarios with your leadership team and discuss what the strategic response will be to each scenario for input to contingency planning.* Document assumptions associated with each scenario carefully, so that they can be modified on an ongoing basis over the coming months. The output of this process is a number of potential ‘strategies in waiting’ to get you over the next 12 to 18 months, pending a full strategic review in due course.
* Maybe you should be encouraging your clients to similarly prepare for the future.
Assess your key clients
An assessment of the likelihood of your key clients surviving and thriving when the crisis passes will be a key input to scenario planning. Some sectors should be relatively unscathed (food retailers, farmers, some medical, pharmacies and other essential services), some we already know will struggle at least in the short term (sectors dependent on international travellers), and some probably have good bounce back potential if they can ride out the storm (pubs, restaurants, hairdressers). In carrying out this case-by-case review, you need to look at client end-to-end supply chains, the quality and resilience of management, key dependencies, and their financial resources.
Stress test for different recovery periods and specific sectors/businesses that will return to ‘normal’ quicker than others and include this key variable in your modelling. Monitoring what is happening to different sectors in countries further along the curve to recovery may be insightful. Watch what is happening in China, for example.
Look at your own business model
Reflect on different scenarios emerging and the possible implications for your business model. Is your current business model sustainable? Do you need to ‘up your game’ in terms of systems integration/automation? Are further operational efficiencies required to remain viable? Do you need to embrace virtual working and virtual communication full-time? Should you exit certain sectors or cease to provide certain services? Are there new evolving sectors that you should plan to target? What new services should you consider providing? In some cases, the outcome of this analysis may be to trigger an orderly wind-down of the business (e.g. for those approaching retirement age), or a total repurposing.
At the end of the ‘pause’ in business as usual, you want to be able to say that you used this time to prepare as best as you could for whatever future business environment emerges when the fog of uncertainty lifts.
Brian Crowley is a Business and Executive Coach and Facilitator at The Alternative Board.
This article first appeared in Briefly, a weekly e-newsletter published by Accountancy Ireland.