Right now, the entire world is facing a challenge unlike anything it has experienced before. Sure, there have been pandemics in the past, but nothing to this scale with online communication becoming the norm.
For business, this means everything has changed. And it’s likely to mean a huge recession, as many small businesses have been forced to shut their doors entirely for this quarter (at least) with no guarantee that they will be able to resume normal operation subsequently.
Not only that, but we were actually expecting a recession to hit very soon before all this happened.
But this is not all doom and gloom. In fact, as any savvy business owner knows: a recession can offer as many opportunities as risks. With all that in mind, how do we succeed in this difficult time? How do we gain productivity and growth at a time when many businesses will expect to fail?
Preparing for an Economic Recession
As mentioned, we are actually 12 years into a 7 year recession cycle. That means that many businesses were already gathering their nuts for winter and strengthening their position, ready to benefit from their weakened competition, and from changing demands.
There are a few things that savvy businesses have done already to prepare for this recession.
- First, businesses have actively cut down on unnecessary costs. That means leaning out and particularly using automation and force multipliers in order to achieve the same production with less time and energy. This has proven invaluable in the current climate, where being able to continue to manufacturer large quantities of product even without physically-present members of staff has been huge. Likewise, reducing costs and streamlining has helped businesses to succeed at a time where their income might have been reduced. This has been a smart move on the part of business anyway, as it allows them to compete with the “lean startup” that has lower running costs and is more versatile as a result. This has also been a growing threat.
- Executives have learned to identify the best short-term goals and to balance their goals in order to get actual, realistic results. Too many businesses had grown to the point of being hard to sustain – with large, long-reaching plans that would take years to bear any fruit. Often these projects would be cancelled after years of investment! It’s time to be realistic and to chase after the short-term wins.
There are four major categories where productivity gains can be seized:
- Work redesign
- Process optimization & automation
- Competency development
- Upskilling & Employee experience
It’s time to think in terms of “Kaizen” and to streamline everything to the point of being as resilient as possible.
Finding the Upside
The other thing to recognize is that for every industry and niche that struggles in an economic crisis, there will be those that succeed.
Likewise, while Covid-19 has been brutal for many industries, it has presented many opportunities for others.
Consider this: gyms all around the world have been forced to close. But while that has hurt the health and fitness industry drastically, it also means that people have been forced to train from home. As a result, the price of dumbbells and kettlebells has gone through the roof, presenting a great opportunity for gym owners to sell their inventory! Likewise, more people than ever are now training from home.
A gym that would offer its clientele to continue paying their current membership for bespoke training over Skype would potentially be able to thrive.
This is how you need to think. In business, one of the best ways to ensure you are resilient against future developments, is to try and “put yourself out of business.” Try to create the product that will render your service unnecessary – if you don’t, someone else will.
Likewise, in an economic crisis – or a global pandemic – consider the ways that other businesses will be able to continue offering their services or products. Then do that. If you don’t, someone else will.
What Not to Do
Just as we can learn from the past what we should be doing to strengthen our businesses, we can also look to the past for examples of what not to do. During the 2000 economic downturn, Sony famously cut its workforce by 11%, and it’s R&D department by 12%. The business never fully recovered: while it protected the profit margins in the short term, it prevented the organization from being the leader that it was prior to the recession.
Sony has failed to gain serious momentum, with its tiny footprint in the smartphone industry being one of the clearest examples of this.
This time, businesses are acting differently. Companies like Ford, Pepsi, Procter & Gamble are focusing on their high-efficiency mandates. Others, like HSBC and CVS, are focusing on digital modernization. Solutions like Citrix Workspace with Intelligence are making remote work and process automation possible with a focus on employee experience.
Now is the time to take advantage of the quiet. To start working “on” the business, instead of “in” the business. By doing this, you can come out of this downturn stronger: and especially if you find new ways to offer your service during a time when many of your competition will be reacting, cutting cost and headcount while licking their wounds.
Optimization, Optimization, Optimization
Just because you know that you need to prepare, that doesn’t mean you know how to go about doing it. So how do you optimize your business to survive and thrive during the current and upcoming crises?
The answer is to better understand what optimization really means.
One simple example is to focus on the process fix. A process fix means looking at any process that your business needs to carry out regularly and then seeing how that could be made more efficient.
A good example might be to imagine a member of staff who needs to write articles and upload them to a blog.
Let’s say that they currently write the article, proof read it, then upload it to the blog, and then go through adding images and headers. How could we fix this process?
Let’s imagine now that they were to instead write the article right into a CMS (content management system – a backend for a website that lets you easily add content) and then proof read it at the same time as adding images and other formatting. You’ve now reduced a four-step process to a two-step process.
Conceivably, that might shave 10-15 minutes off of every article. If they write two articles a day, that’s 25 minutes on average saved per day. If you have ten members of staff doing the same thing, that’s then 250 minute saved per day. That’s 1,250 minutes per week, or 20 hours. If you pay $40 per hour, that’s $833 saved every week – by tweaking one process.
This example of course won’t apply to most businesses but the idea is to learn from this methodology and to look at your own regular processes. Where is time, and therefore money, being wasted?
What materials are being leftover that you could reuse?
And while you think about all this, consider that your team are your ultimate force multipliers. By training them to work their very best, you can multiply your output many times over. And by doing that, you make your business far more resilient.
There are already solutions that focus on process mining, Celonis and their Intelligent Business Cloud take all of a company’s processes from ERPs and other systems to pinpoint friction. Their goal is to make frictionless superfluid processes and then automate them.
Do this and think of smarter ways to offer your services even when you can no longer be physically present, and you will find that your business is one of the ones that comes out on top.
Now, as other businesses struggle to continue or lay off staff, you will emerge in a position that is much stronger than you were in before.
It’s time to focus on the things that really matter: your team, your management, your staff, and your productivity.
The shocking thing really, is just how much money gets wasted by so many businesses. There is no better time to focus on results, productivity, and efficiency than right now.