The COVID-19 crisis has caused an extraordinary amount of strain for the majority of South-East Queensland businesses. If JobKeeper is the only thing helping your business stay afloat, you’ll be anxiously awaiting the Government’s announcement on 23 July, and dreading the end of September.
But it’s not a wise business strategy to cross your fingers and hope the subsidy will be extended. And believe it or not, there are plans you can put in place now to ensure your business will survive JobKeeper.
Here, we explain three solid recommendations to survive the end of the subsidy.
But first, some context… These insights are informed by recent market research we conducted, to understand how seriously businesses in South-East Queensland have been impacted by COVID-19.
We surveyed business that were not in the first line of impact – think insurance companies and pharmaceutical manufacturers rather than tourism operators or hospitality.
The sobering reality is that 70% of respondents had been impacted and of the 30% who were lucky to emerge unscathed by June, only 50% were confident it would remain this way.
It’s fair to say coronavirus has had a significant impact on SEQ businesses, so let’s dig into three ways you can position your business to bounce back faster than others.
1) Deepen your understanding of your market now
Most respondents think the damage to their industry is likely to last more than six months. That’s past the expected JobKeeper expiry date.
This means it’s critical for businesses to have a detailed recovery plan, allowing them to survive in a tough environment with the same number of competitors but fewer clients to target.
The lynchpin of a 6-12 month recovery plan is market intelligence. In other words, you need a deep understanding of your key customers and prospects to make the best decisions for your business.
We’re not talking about a general understanding of market conditions. Clearly everyone is doing it tough and you might generally expect that it’s harder to sell and be paid on-time for the next 6-12 months. There’s no valuable insights there.
No, we’re talking about understanding your customers’ businesses almost as well as your own.
What are the actual decision-makers thinking and feeling right now? What is their competitive positioning? What’s their cash flow like? What are the competitive pressures shaping prices in their industry? What are their short and long-term intentions? Where does your company sit relative to their plans? And so on.
It’s only when you have a crystal clear understanding of your customers that you can determine what your business needs to do to grow faster than others doing what you do.
In fact, 48% of respondents to our survey said they would like ‘a clear picture of what [their] current market is doing’. Despite this, 56% of respondents haven’t conducted comprehensive market research in the last year – or at all.
When the economy is strong, you can sometimes get away without market intelligence. But in times of crisis, not knowing your market inside-out is a serious disadvantage. Now is the most important time in a century to be close to your clients, potential clients and referrers.
Even if you’ve been in business for decades, there’s always something new to learn that can give you a competitive advantage, especially right now.
Your business needs to be willing to adapt, be innovative and accept change. Don’t accept a sales decline as something you have to go through and that is par for the course. Use this time to get closer to your clients and prospects and find those innovations that help you prosper.
2) Identify and reduce waste.
Most business owners are too deeply involved in day-to-day operations to objectively assess how their business is running. In many cases, their businesses could be operated just as effectively, but with fewer resources.
So how do you identify waste?
You have to follow the significant processes in your business from start to finish, understand what value is added along the way and ask yourself if there is way to deliver the same (or increased) value from a process with fewer resources or time inputs?
It’s not always about being more efficient. As unlikely as it seems, sometimes your team could even be too efficient. Fantastic output from one part of your business is actually a kind of wastage if the next stage of the value chain can’t make use of it for days, weeks or months. Your working capital might achieve a better result if it was redeployed into other parts of the value chain.
We see wastage in the businesses we work with all the time. It looks like these examples:
- Stockpiled inventory that was purchased “for a good price” but is in excess of what can be sold quickly.
- Inefficient processes that exist because “that’s the way we’ve always done it”.
- Field sales staff going through the motions of their job without lifting results, and blaming tough trading conditions.
- Advertising in the wrong channels, to the wrong people, with the wrong message, at the wrong times and without a plan for testing and adapting over time.
If you are holding out hope that by September 30 (just 12 weeks away at the time of publication) the economy will recover sufficiently to make survival possible without some waste reduction, I hope you are right. But just in case you’re not, it might be time for a comprehensive review of the waste in your business.
There’s always a change that can make your business run more effectively while costing less.
3) Use this time to build a more powerful company culture
Businesses are going through a period of intense uncertainty, which will continue after July 23 no matter what happens with JobKeeper.
Employees are anxious and confused about their job security and its effect on their home lives.
Even when the JobKeeper review gives us more certainty domestically, there are several macroeconomic factors we can’t control:
- the invention (and adoption) of a vaccine or cure
- the level of international investment in our economy, and,
- the increase in international protectionism as governments try to look out for their own economies.
What we can control is what our employees hear and see in our business.
Now is the best time to shape the five-year culture of your business. Having a committed and productive team will reduce the cost of turnover and help you achieve your business objectives. Committed employees who understand your strategic business plan and what it requires of them will be more productive and motivated.
How do you shape and leverage your organisation’s culture?
Start with measurement. It is possible to measure the culture of a business. You can measure both values and behavioural observations. We recommend starting with your senior leadership team.
Then measure the same things in the rest of the workforce. Compare the senior team’s values and cultural observations with the rest of the workforce’s and find where the gaps lie.
Make a plan for filling those gaps with visible actions that are in line with company values and your cultural change programme will be underway.
Measure, plan, execute. Obviously, that’s a very short guide on how to change culture, but it’s accurate.
Right now there’s a great opportunity to forge the winning culture that’s going to see you bounce out of the COVID downturn faster and more successfully than your peers.
If you would like a copy of our SEQ-focused survey’s final report, simply request one on our Contact form and we’ll get one out to you.
Or feel free to call us on 1300 36 20 27 if you would like to know how we can help you with market intelligence, running a leaner business, or measuring then improving your company culture.