Prepare for “Back to Work” but not “Back to Normal”
It’s been 9 weeks since we published our first article asking clients to reconsider their business strategy for the troubling times that were fast approaching. During this time, we have been navigating a range of extreme circumstances. Most of our clients have experienced many or, all of the following:
- A complete or partial shutdown of their business
- A reduction in revenue of anywhere from 15% to 100%
- The standown or redundancy of many employees, or entire workforces in some cases
- Loss in value of assets and investments
- Cancelled or reduced orders and contracts
- Supply chain disruption
- Volatile exchange rates
- Attempts to renegotiate all types of business expenses, including rent
- Lost or uncertain rent streams for landlords
- Negotiations with banks and financiers to deal with cash shortages and to secure more capital
- Navigation of complex rules and systems to secure Government stimulus in the form of Cashflow Boost and JobKeeper payments
- Learning and adapting to operating a business on-line.
- And not to mention… many sleepless nights.
On the international scale, Australia has fared comparatively very well from the health crisis. We now need to deal with the economic crisis. The Government money is starting to flow, restrictions are beginning to lift and the Government is preparing for us to get back to work.
Back to work will look different for everyone. Some of you will be full steam ahead with a full lifting of restrictions within weeks while others will face a slower trajectory over the next six months. However, the one thing that will be the same for everyone is that things will not be “Back to Normal”.
It is important that you use these next few weeks to prepare your business to successfully navigate this next period of change. The businesses that will survive and thrive will be those that accept the new normal and adapt their business accordingly. While this particular event is unprecedented and is affecting nearly all clients, business adaption methods are not new.
We have helped many businesses adapt and change their business models to deal with different events, such as economic and legislative changes, changes to markets, suppliers, weather events, fires and technology disruptions. Our process of business adaption is a three-step process:
- Goals – This uncertain event has likely triggered you to think differently about what you want from your business. Perhaps you want to make your business smaller or nimbler, change the way you deliver to your customers, sell or retire earlier or embark on a series of acquisitions to grab market share. Whatever it is, starting with understanding what you want from your business is a critical first step to successfully navigate an unexpected event and adapt.
- Forecast – All goals related to your business can be put into a financial model, called a forecast, which uses data to predict revenue, costs and profit. Forecasts can also estimate how much cash or capital your need to follow a certain path. Typically, we have relied on historical data, however, we are starting to develop ranges of likely revenue bands for certain industries in this uncertain time. Working out this forecast is critical as it will help you to know what your cost structure needs to be during this next period and how much capital you need. It is very likely that you will need to adjust your wage, rent and other costs to adapt to the new normal. Similarly, if you have a good handle on your capital requirements you can have more confidence about your next set of decisions.
- Plan and implement – Once you have settled on your goals and your forecast, implementing the changes with a step by step plan is critical. Regular tracking of actual results against this forecast keeps your accountable and helps you to determine if your forecasts are achievable and robust.
At The Macro Group we will be ourselves going through these steps shortly for the 2021 financial year as our client base will change and the type of work that clients want from us will also look different.
We are planning to be back in our office in the first week of June. Some of the steps we are taking include:
- COVID-Safe App – Encouraging staff to download the COVID-Safe app – if staff are alerted quickly to exposure they can stay at home to limit exposure to others.
- WorkSafe Australia – Using the excellent resources on the Safe Work Australia website (https://www.safeworkaustralia.gov.au/) to adapt our workplace to formally implement social distancing and cleaning requirements into our workplace.
- Workforce –
a) Staff Policies – Updating our staff policies to ensure that we have adequate policies to deal with staff that may be exposed or sick. Culturally we want to make sure that staff with any sickness symptoms feel comfortable to either take a sick day or have the systems in place to work from home and don’t feel under pressure to come to the office. We will need to manage around this. This is a large cultural change, especially in the finance industry where there has been a culture and stigma for decades of still coming into work and “soldiering on” while sick. For other industries that require staff on site, a increase in sick leave is likely.
b) Team – Making sure we have the best team and that they are motivated and ready to adapt to the continual state of change.
- Technology – the full work from home model has allowed us to learn some efficiencies in the technology space so we will be implementing these learnings into the work schedule. I am expecting that more meetings will now take place on Zoom. However, we miss our face to face interactions and hope the frequency of these interactions will start to increase as restrictions ease.
- Clients and Customers – We have been regularly communicating with you through this process but we will be increasing our communication with all clients to understand what you want from us in the new normal and we don’t just assume that the past service arrangements will work. if you have been closed, now is the time to be contacting all customers and clients and encouraging them to re-engage with your business as you prepare to re-open.
- Marketing- We have traditionally done very little marketing, but we too are reconsidering what we do in our space to ensure our client referral process is strong and takes us into the future. We recommend increasing marketing to get customers back in the door when you reopen.
Overall, we thank our clients for the tremendous support that you have shown us. The “thank you” emails we get really help lift our team who have faced a daily barrage of complex legislation, many new systems and processes and many difficult client conversations.
We look forward to our upcoming discussions with clients lifting to focusing on the future and building successful businesses in the new economy.
Date published: 1 May 2020