Scaling a business and that too, amid unprecedented time, involves a lot of risks and challenges. Unforeseen crises such as COVID-19 require not only a prompt redressal mechanism but a robust crisis mitigation plan in place. Though each crisis may not warrant a similar contingent plan, it is imperative to keep your crisis guide book handy. Businesses need to be extremely agile and resilient to navigate through exigencies. Here are some golden rules that you must follow irrespective of how destitute circumstances are:
Be ready to pivot business model if required: Formidable crises may throw flourishing businesses out of gear. For instance, if one were to go by the ongoing COVID-19 pandemic, several companies revamped their structure in a short turnaround time to survive through the crisis. An entrepreneur should be ready to revisit and overhaul the operational model if the need arises. Survival should be the key here. Conduct an honest and thorough assessment of fixed and variable costs as well as revenues. Identify the potential areas for growth. For instance: a grocery shop owner may consider adding certain products or adding digital operations to cater to millennials.
The criticality of the HR function: The HR function had been regarded as the most under-estimated domain, but it has assumed a pervasive significance in recent times. Employees are a valuable resource for organizations, and employee engagement is a panacea for keeping your staff motivated, productive, attracting, and retaining talent, especially during destitute circumstances. The role of the HR function is critical to maintaining a healthy relationship with your employees and keeping them equipped to brave the rough weather.
Redefine Customer Experiences: Be quick to gauge and understand customer needs that may vary according to the situation. Market research, regular communication with customers, and the use of Big Data are ideal ways to gain insight into consumer demography, profile behavior, interests, and much more. Identify how your business and product or service can solve customers’ problems. Be open to feedback. Keep on improvising the product till it resonates with your target audience. Aim at a wholesome consumer experience rather than just concentrating on the product or service.
Rationalize expenditure and focus on customer acquisition spends: It is imperative to cut down extravagant and unnecessary expenditures during a crisis. Focus on reducing fixed costs and be mindful of spends per customer acquisition. Analyze financial metrics and cash flow. Each cost-cutting measure should be considered carefully, weighing the pros and cons. Businesses need to foresee credit cycles and potential bad debts too.
Grow by data: LeveragingBig Data helps businesses to gain valuable insights and take crucial decisions. Rather than speculating, go by statistics. Site analytics, survey analysis, consumer data, and social insight are a vital source of information for companies. Data helps businesses to identify the gaps and shortcomings such as customer leaks in the sales funnel, their pain points, and causes of customer losses, and much more.
Prioritize: As an entrepreneur, you should be the key decision-maker of what presides over the rest of the things. The priority should not only encompass financial decisions but include other functions as well. For instance, one must also identify areas and business strategies that need immediate focus. Each task must be assessed from the productivity and outcome perspective rather than just being activity-oriented.
Unlearn and relearn: Scaling up a business is a journey that teaches you something at every step. It helps you to identify what works and what won’t. Learning and Unlearning is a continuous process that equips an entrepreneur with analytical skills and foresight to identify promising opportunities and prospects. Drawing inferences and learnings from every experience and accordingly tailoring the business strategy will result in fruitful outcomes in the long-run. The same process applies to the workforce, as well. It is prudent to invest in their Learning & Development to help them stay relevant according to the requirements of the industry.
Communicate: Communication is the soul of the organization. Ensure that you keep all channels of communication open, especially during tough times. Maintain a regular flow of communication with your customers to be abreast of their changing needs, tastes, and preferences. Being transparent in approach will enable your consumers to empathize with you. Keep your vendors informed about the status of payments, the tentative timeline of payments, and so on. Communication should be robust and honest with all stakeholders- be it top leadership, employees, or investors. Crisis communication must be transparent, informing the stakeholders of the magnitude of the crisis, its impact on the business, and the redressal measures backed by sound rationale.
Leverage Technology: Technology is an enabler to automating manual tasks, boosting efficiency, and saving time and resources to concentrate on core functions. Tech-driven firms are agile, productive, and responsive to changes. Technology helps gain insights about consumers and the workforce that can be used for improving outcomes.
Crisis management plan: Every crisis requires quick identification and resolution. Have a crisis management plan and a team for tackling exigencies. Crisis management strategy should be divided into i) immediate and ii) long-term. It is equally significant for businesses to conduct predictive analysis through market scanning, Big Data, and technology to foresee and predict the magnitude of the crisis. Crisis management warrants scale up investment in risk assessment, management, and mitigation functions.
Businesses need to be resilient to absorb shocks and bounce back after the crisis. Failures and downturns are part and parcel of every business that should be taken as learning for the next phase.
Authored article by Prasad Rajappan, Founder & CEO, ZingHR.