COVID-19 has caught many countries off guard. The emergency measures taken by various governments to contain the spread of the virus had a significant impact on the way companies operated and organized themselves. Population containment, stock shortages, disruption of supply chains and sudden drops of demand have created serious problems in several industries.
Even though the decline of the number of cases continues, the virus is still present and has not stopped circulating. It is time for companies to start thinking about the “world after”, considering the different possible scenarios, to seize the opportunities of the current market and continue to expand, despite the crisis.
But before that, the most urgent thing to do is to make the changes and deploy the necessary means for a return to work in the best possible conditions. To this end, we propose a few examples of steps that can be taken to mobilize the resources that companies need to get out of this difficult time.
Crisis Management Plan
The COVID-19 pandemic threatens the stability, even the survival, of companies. They need, therefore, to react urgently.
The first thing to do is to bring together the crisis unit to establish an action plan to prevent or limit the impacts of this crisis. This plan must include a communication strategy for employees, partners, shareholders, etc.
Throughout the crisis management process, companies must always evaluate the actions put in place, in order to adjust them and provide a quick response in the event of a problem.
It should also always be kept in mind that the information and data collected, as the situation evolves, are very important. It will help to develop a strong strategy, learning from the past and taking advantage of the opportunities of the future.
Human Resources Management
Human resources management is a priority and one of the most complex tasks. During the COVID-19 pandemic, many companies had to readjust their internal working conditions and organization.
Whether within the company or at home, they must take measures to promote the well-being of employees, but also to maintain or improve their involvement and productivity.
It is important to support and reassure them during this difficult time through effective communication, which is the key to eliminating uncertainty and frustration. It also helps to prepare employees for the future changes imposed by the market.
In addition, it is essential for the companies concerned to make available to their staff the technical means necessary to maintain a certain continuity of work, especially for those who are teleworking.
In terms of workforce retention, some companies will have to reassess their needs. To balance and reduce costs, difficult decisions need to be made. However, it is important to study, beforehand, the various possibilities and scenarios of the internal organization reform.
Supply chain management
Business supply chains are the most affected, in the face of restrictions implemented by governments. Many production plants, component manufacturers, or raw material suppliers are unable to meet deliveries or encounter delays. This has repercussions on the economic and social situation in several lines of business.
Even if the effects of this crisis are difficult to assess in the medium and long term, it is an opportunity for companies to review their supply chain management strategy. To do so, several short-term measures can be considered to address immediate challenges, such as:
diversify the supply chain to reduce the risk of dependency;
work with suppliers to enable subsequent visibility of inventory, production capacity, order status, etc.;
explore alternative supply sources, giving preference to the short channel of distribution;
review inventory management policies, by evaluating other logistics options;
move to a digital approach of the supply chain management to promote agility, resilience and improve responsiveness;
model several scenarios to apprehend and anticipate the various risks related to the health crisis.
Financial performance and tax arrangements
The downturn of activities, caused by the pandemic, has led to a decrease in cash flow. Smaller businesses will be more impacted than larger businesses, as they do not have the same liquidity reserves. Sectors, such as tourism, which had to shut down, will need a solid plan to finance the recovery or face liquidation. However, the severity will differ from one country to another, depending on the fiscal and regulatory measures implemented by governments to support businesses in the face of this crisis.
It is clear that some companies will cope better than others. The most important thing is not to become discouraged and always keep in mind that the choices made in the short term will have a considerable impact on the future of the company.
To achieve this, a financial, human and organizational balance sheet is needed to identify financial and operational levers that can be used to make savings, generate liquidity and improve the solvency ratio.
In today’s uncertain world, it is also important to learn and understand each country’s tax and regulatory systems. This will allow for effective tax management and possible assistance.
Strategic change and advancement
As the COVID-19 continues to evolve, companies in all sectors are actively thinking and executing new strategies to adapt and increase resilience in the face of this crisis.
This is an opportunity for some companies to accelerate their digital transformation. This approach has several advantages in a world where digital and new technologies play an important role. It is also a solution adapted to the current context, where certain rules of social distancing must be observed.
It is important to anticipate changes in the main markets, as well as the future needs of customers and to reflect on post-crisis consumption patterns. It is, in fact, possible to overcome this crisis and maintain or create a competitive advantage by adopting a long-term vision.
At Almaxyra & Company, we are working with various companies and organizations around the world to manage the impact of the epidemic on their business. We, therefore, participate in the reflection and rapid implementation of appropriate solutions. We also encourage our clients to adopt a “positive attitude” by looking into the future to seize the opportunities that are open to them.