Survival Kit

The covid 19 pandemic is an unprecedented event which we have no comparable benchmarks for to use to define the longer term impact. It has become clear now that the lockdowns have lasted longer than anticipated and post lockdown we will have to continue social distancing behaviours for some time. The economic impact is now real, which will result in a prolonged economic downturn.
Our “first aid tool kit” was designed to help you secure your financial situations. Our “survival kit” is designed to help you focus on what's next and stimulate you to adapt and manage what will be the new medium term reality. This kit covers very practical tips, tools and a strategic framework to shape your destiny. There is no time to play the blame game, business owners and managers have to design one’s own future. Strength, leadership and hard work now more than ever form the call to action!
The covid 19 pandemic is an unprecedented event which we have no comparable benchmarks for to use to define the longer term impact. It has become clear now that the lockdowns have lasted longer than anticipated and post lockdown we will have to continue social distancing behaviours for some time. The economic impact is now real, which will result in a prolonged economic downturn.
Our “first aid tool kit” was designed to help you secure your financial situations. Our “survival kit” is designed to help you focus on what's next and stimulate you to adapt and manage what will be the new medium term reality. This kit covers very practical tips, tools and a strategic framework to shape your destiny. There is no time to play the blame game, business owners and managers have to design one’s own future. Strength, leadership and hard work now more than ever form the call to action!

Build on the fundamentals

From a financial picture to a movie: continuous follow-up

In our First Aid Kit we gave you 3 financial tools to navigate this storm: The financial scenario planner for cost cutting, the cash flow planner and the KPI dashboard. We could add more complex financial tooling, but honestly, with these you have all you need to take the actions that will keep you afloat, inform internally, inform banks, inform investors,…

Once you start using the tools & templates you get a clear snapshot. A moment in time to show you where you are and an idea of where you could be heading. When the most acute impact of the crisis is over it is time to use these tools more structurally. If you and your team take financial snapshots on a continuous basis, magic happens. Your assumptions and forecast become more accurate because you start to see your errors and as time progresses, you start to feel to what extent you are overestimating or underestimating the situation and the impact the crisis has on your market. This will only improve as you keep doing it regularly and you and your management team structurally use the KPI dashboard to navigate the ship. From blips in time to a comprehensive understanding of your financial future.

 

Customers, suppliers & staff

 

Customer tracking

Hopefully by now you have set up strong communication lines with your customers as we discussed in the First Aid Kit (Link to this part). It is time to get a bit more analytical in how you approach strategic customers.

  • Step 1: Make a list of your customers and correspond the amount of revenue they bring your company.
  • Step 2: Rank them from the largest amount of revenue to the smallest amount  & make an 80/20 list.
  • Step 3: Starting from the top, what customers provide you with 80% of your revenue? Quite often this is 20% of your customers. Let’s call them your strategic customers

If you have customers who are not regularly buying and purchasing rather based on projects, then do the same with your quotation pipeline and validate the feasibility of these projects progressively.

It is key to do a regular risk assessment of these strategic customers. During this crisis you need to build even stronger relationships with them and become actual partners. This will require transparency on both sides which will not be easy. Try to get insight in their need for goods or services over a longer timespan and the timing & ability to pay you for those goods or services. Also work on a benchmark KPI to know to what extent they are below their normal revenue for a specific period. This will give you an idea if their situation is getting worse, stabilizes or is getting better.

 

Supply chain audit

A supply chain is very specific to the business you are in. There is a way to do it quick & dirty in order to give you a general feeling of where the pain points lie.

Slice the elephant.

  • Step 1: Slice the process from the first step all the way to the end-user. Do this in a structured way, e.g. in an Excel type sheet.
  • Step 2: Give an ‘impact score’ for every step in the supply chain from low impact to very severe impact. The impact could be practical, meaning this step in the supply chain is practically hit because of the pandemic (e.g. container can’t leave the harbour because of closed borders) or it could be economical e.g. the supplier you normally work with is going bankrupt and you need to find alternatives).
  • Step 3: Based on the severity of the impact on that step in the supply chain, anticipate clear actions you and your team will need to take to mitigate the risk of the whole chain grinding to a halt.

Staff

The actions you take towards your staff in the beginning of the crisis (lockdown) will be different from the actions you will take after it. During lockdown you were in a ‘force majeure’ situation and choices were made for you. Once you can legally reopen properly it will not be the government, but you who will need to decide how to manage your staff requirements based on your financial and commercial situation and forecast. Bear in mind the government support schemes will change as well when the force majeure situation is over.

Keep the communication lines with your staff firmly open. Make sure you update & share your outlook with them on a regular basis. They need to feel involved in the actions and decisions that have been or will be taken.

Mind also that your staff’s needs will change in this second phase. Where needs during the first phase are mainly around guidance towards a new way of working and stabilisation of the quite chaotic context, the needs in this second phase shift towards being able to contribute to the company’s renewal plans. To enable this, it is important to find a good balance between top-down communication and decision-making and bottom-up initiatives and empowerment to contribute to the projects that are essential for the company’s survival and future. Constant framing and prioritisation of the company’s roadmap are key here. In terms of energy preferences, this means to shift from focus on bringing structure and planning action, towards envisioning a new future, and motivating and engaging your team.

Next to involving staff in ongoing operations and renewal plans, there are also some practical opportunities one can take with staff during this period of slow activity, e.g.:

  • Cross-training in other areas of the business
  • Use excess resources to help build an opportunity pipeline – example: build up database for potential future customers
  • Internal clean up of systems, archives and facilities
  • Quality assessment of products, data and services
  • Completing of documentation for critical processes

The 2020 matrix

We won’t remember 2020 as the year of the new decennium, we will forever remember it for the COVID-19 pandemic and the start of the economic rehabilitation that followed it. These are two very different but equally important forces that impact your organisation and which will shape your strategy and future for the next months and years. It will be key to understand the impact of these two forces specifically for your goods & services in your industry.

Making a plan for the future has 3 simple steps: (1) map your situation today (2) decide on where you should be heading (3) define the actions that will get you there. We have designed a custom matrix to help you with just that – The 2020 matrix.

Horizontal-axis: Economic impact on your goods & services

The horizontal axis in the matrix describes the volatility of your products’ and services’ sales caused by economic shifts. We know the self-assessment is for a large part based on gut feeling, so involve your team to make this judgement call to place yourself on a horizontal axis. If your company was around during the last crisis in 2008, performance during this time could be an indicator as well.

 

Vertical-axis: Pandemic impact on your goods & services

The vertical axis on the matrix describes the impact of the practical measures governments and companies will take to keep the virus under control. These practical measures include business travel restrictions, restrictions on forming large crowds,… Again this self-assessment is largely based on gut feeling since we do not know the measures that will be in place yet. But you might have an opinion of the impact on your go-to-market and operating model.. E.g. if you are heavily dependent on people moving around (worldwide) and meeting other people to run your business you will have to rethink your strategy or you will not be able to generate any revenue in the foreseeable time.

 

Quadrant 1: Winter is coming

In this Quadrant you believe your goods and services & go-to-market will not be severely impacted by the measures taken to fight COVID-19 but you think you will be impacted heavily by the economic crisis which follows it. This means good news and bad news. Companies in this situation often underestimate the impact on their business in 2020 because they are not impacted immediately like others. They think they will steer clear because they have a low touch go-to-market model, and goods and services that can be easily sold virtually.

When you are in this situation today you should think about new products or services you can inject into your current business model, which are less sensitive to economic fluctuations. Often the middle segment is hit the hardest. In most industries the lower tier products will still have buyers and the very high-end products will have buyers, but the middle part is often hit the hardest. Conclusion: go up or down with your proposition with your current market if you are in the middle, and think of new ways to use your current assets (skills, machine, network, …) to sell other types of goods and services less sensitive to economic change.

 

Quadrant 2: New world is coming

In this quadrant you believe your goods and services & go-to-market will be severely impacted by the measures taken to fight COVID-19 but you think you will be impacted mildly by the economic crisis which follows it. Again, this means good news and bad news. Companies in this situation live on hopium. They hope all their problems are solved once the pandemic storm lies down and everything will go back to normal. Companies in this situation are often incumbent organisations doing fairly well before the health-crisis hit.

When you are in this situation you need to hyper-transform. You have to virtualize your processes and sales approach drastically, and fast. What normally took you years because you needed to convince or steer clear of many different stakeholders, will now take months. As long as your direct competitors don’t offer alternatives to the traditional ones, everything remains the same, and the situation seems safe. This might be the biggest pitfall in this situation, waiting for others to move first. If you manage to move quickly and make your product and services available in a go-to-market model that is pandemic-proof, you will win.

 

Quadrant 3: Ice Age is here

In this quadrant you believe your goods and services & go-to-market will be severely impacted by the measures taken to fight COVID-19 and you think you will be impacted severely by the economic crisis which follows it. This means the most powerful business forces of 2020 are playing against you. You were impacted very soon in the health-crisis and this will not be over soon. When you truly believe you find yourself in this quadrant, drastic measures will be needed to survive and reinvent your business.

You will need to reinvent your product offering and your go-to-market at the same time, which means you have little experience from your pre-Corona years to leverage. When you strategize for this scenario it will almost feel like you are founding a whole new company next to yours. Like going to Mars to survive the ice age on planet earth. Try to see the positive side, you have a lot of freedom. Forget legacy, forget previous barriers to innovate. Speed up the transformation you were already working on, or assign some dedicated resources who can work on transformation from scratch, and with full focus. Look at your organisation as assets you can deploy in new markets with new channels to create value. Of all 4 scenarios this will require the most entrepreneurial skill & energy from you and your team.

 

Quadrant 4: Digital challengers take over

In this quadrant you believe your goods and services & go-to-market will be only mildly impacted by the measures taken to fight COVID-19 and you think you will not be heavily impacted by the economic crisis which follows it. This means the most powerful business forces of 2020 are playing in your favor. It is weird to say, but this is the windfall you have been waiting for. Because of the pandemic your customer base is educated in virtual business overnight. This would normally take you years to establish because organisation and customers are slow to change habits.

The strategy is very clear for you. Do what you are doing and ramp up scale immediately and fiercely. Now is the time to take market share from the incumbents you have been fighting for so long. These new normals you experienced during the health crisis are not going away. Full force ahead.

Stay up to date!

Don’t wait for others to come and help you. This is not a drill. This is the first global crisis of this magnitude for your staff, customers, suppliers, banks and governments. Take the lead and design your own destiny. Don’t forget to help others, you are in this together.