October 20, 2020

Council Post: Business Planning For The ‘Next’ Normal, Part 2: Business Resiliency

Mike Ford is the Managing Director and Founding Member of PBO Advisory Group.

As I discussed in Part 1 of this series, leaders are slowly emerging from a business paralysis caused by the Covid-19 pandemic and determining what their next business norms will be. The previous article covered what steps you should be taking in terms of cash flow planning. Now let’s turn attention to your business’s resiliency and how you can prepare for the next business interruption.

Since March, leaders have experienced unpreceded business challenges. Businesses have been forced to deal with situations they could never have imagined in February. If there is a silver lining, it is the fact that you can now apply the lessons learned from the past several months by planning and preparing for the next disaster, no matter what or when it may be.

Disasters like a pandemic or a natural disaster, such as an earthquake and wildfire, can affect any business unfortunate enough to be in its path. Other types of disasters might affect a small fraction of businesses, or even just one. No matter what disaster you may face, addressing it before it strikes is key to resiliency and recovering quickly.

Plan For The Next Pandemic

Undoubtedly there are more pandemics looming. Planning for the next pandemic should begin with reviewing what measures you have taken since Covid-19 struck, making adjustments as needed and committing what you’ve learned to a plan.

Your pandemic plan should include:

• What lessons have been learned and what new processes and procedures should be put in place to prepare for another pandemic? One experience shared by many companies, including mine, was getting employees set up to work from home. From technology to furniture, multiple issues had to be addressed once lockdown orders were put in place. If our company ever again is faced with a work-at-home situation, it will be much easier to re-assemble our workforce due to the procedures and policies we now have in place.

• What is your management and HR succession in the event any member of the leadership team is sidelined? This can be as simple as an organizational chart(s) that maps out various chains of command in the event of absent employees or as detailed as reassigning various management responsibilities to remaining employees.

• What will your public relations response be, including how you are handling the pandemic crisis? This should be detailed and communicated via a separate communication plan. This should be drafted in advance and ready to have specifics added.

• How will your company address vaccination requirements (if/when a vaccine is developed)? This will depend, in part, on what industry you are in. For example, a business in the food and beverage industry would want to make its vaccine requirements a high priority while a company with remote workers might make vaccination a lower priority. Other issues to consider include providing vaccines as part of your company-sponsored offerings and/or providing partial workforce vaccinations if vaccines are not widely available or cost-effective.

Any disaster you may face will present a unique set of problems and required responses. While planning for the unknown can be difficult, you should view each potential disaster as a different scenario with its own challenges. Once you begin to create your response to each scenario, you may find you are able to leverage ideas from one plan to another.

Your Resiliency

With a plan in place, you are one step closer to recovering more quickly from whatever disaster you may face. There are other steps you should also take to ensure your financial resiliency. Many of these steps are good financial practices in general:

• Have at least two payrolls’ worth of cash available, should you be forced to make any closures (think of this as an emergency fund that will allow you to continue to pay employees).

• Diversify your revenue streams, if possible. During a disaster, certain segments/products/services are likely to be hit harder than others. Not being overly reliant on one can help to stabilize your financial situation.

• Run as lean as you can by reducing unnecessary overhead.

• Consider moving all important data off servers and into a secured cloud location for easy access anywhere. Make sure key employees have the skills and equipment to access this information remotely.

• Create a budget that is flexible for your business and the circumstances you could potentially face. This will require creating several scenarios ranging from worst-case (a disaster has shut down much of the economy like the country experienced with Covid-19) to best-case where your business will survive the disaster with minimum affects.

As we get back to business and our next normal is established, being well-prepared for whatever may come next gives your business a competitive advantage and helps put your mind at ease.


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