The challenges presented by COVID-19 are impacting every industry. While businesses in industries such as cleaning and sanitary products, home education and home delivery are seeing spikes in revenue, most other industry sectors are being negatively impacted.
During periods of crisis, businesses typically move through three phases: respond in the short-term, recover in the medium-term, and reimagine in the long-term.
“Summary Table” from CPA Australia’s report: COVID-19 Key Implications for Boards
Respond.
This initial stage relates to responding as quickly as possible to the present situation in an effort to manage continuity. This should involve solutions that can be implemented within hours or days for immediate impact, for instance, switching to virtual services, remote working for your team, and sending out customer communications. In the context of COVID-19, this stage targets the spread or impact of the virus.
According to a CPA Australia report co-authored by Paul Mather, Accounting and Corporate Governance Professor and MIC Board member, entitled COVID-19 Key Implications for Boards, “Supply chains may be cut, many employees may be worried about their future, customers may need rapid solutions, and financial stresses may lead to on-going concerns or fears.”
These impacts will likely be sudden and serious, so the strength of your initial response is critical.
Recover.
During this phase, a business learns how to best perform under the impacts of the virus, possibly through pivoting, refining, or expanding. Recovery has a longer timeline than the initial response, usually from one to three months, and requires strategies to be implemented as the operating environment begins to stabilise.
Recovery will call into question the status of supply chains, excess or reduced inventories, changes in customer demand, operational capacity, or new product and service offerings.
An example of recovery in action is Munash Orangics in Ballarat, which brought forward their 12-month strategy in early April to meet the rapidly evolving needs of their customers.
The unexpected boom in home gardening as an isolation activity prompted Munash Organics to re-evaluate their strategy and bring it forward. This adaptation to new customer demands saw the business roll out garden care packs, children’s projects, products for online purchase, and free online gardening workshops.
Restaurants across Melbourne have been hard hit with restrictions; however, many have pivoted from dine-in to take-away and home delivery. Take Osteria Italian, an Italian restaurant in Fitzroy North, that has introduced a delivery service of dinner hampers in an effort to continue getting food to consumers.
Tourism is another sector that is suffering dramatically from travel restrictions. Melbourne-based accommodation management business Beyond a Room shared in this Domain article that of the 150 Air BnB properties they manage, the pandemic brought their guest arrival rate down to zero.
Beyond a Room’s recovery was to market “lockdown friendly” quarantine accommodation in Melbourne. This sees the business act as the middle-person between the community and people who need to stay in isolation, offering comfortable accommodation with in-house entertainment and food delivery, designed to protect both the guests and community from the spread of the virus.
For more clever and agile ways that businesses are pivoting for recovery, take a look at this piece on the MYOB blog: 8 Businesses Testing Creative Ways to Pivot Under Lockdown.
Reimagine.
This third and final phase is where the business prepares for the new normal.
As stated in an article by SAP, entitled Respond, Recover and Reimagine During the Time of the COVID-19 Virus, the reimagine phase is when companies, “can imagine their business in new and disruptive ways… It is important to consider how we can digitally enable our processes to disrupt and improve the products and services we provide our consumers, patients and consumers.”
The pandemic will have a lasting impact on the preferences of your consumers, so it’s critical to reimagine your business and the ways it can meet these changing preferences and opportunities. Many changes are springing from the dual crisis of personal safety and economic concerns. A Deloitte Insights survey shows us that health and financial concerns dominate, which is having a huge impact on when customers will feel comfortable and capable of consuming more than the essentials.
Only 35% of respondents to the survey said they felt safe going to the store—which has clear implications for retail, hospitality, tourism, and many other consumer-oriented industries. However, this does result in customers purchasing more online—so how can your business reimagine or repurpose existing products or services to suit the current context?
Consider cold-pressed juice company Alli’s, for example, who recovered from the loss associated with supplying juices to cafes, hotels and restaurants by reimagining the way their product gets into the hands (and stomachs) of their end-users. Since the virus hit, Alli’s now sells 1L and 5L juice packs online, direct to consumers, which has caused their sales to rise by 700%.
However, consumer preferences aren’t the only changes the pandemic has prompted in our economic landscape. In his co-authored report Paul Mather states, “The need for greater resilience could change attitudes to supply-chain globalisation providing local opportunities.” There are already signs of this shift in Australia, with Federal Treasurer Josh Frydenberg promising a re-evaluation of supply chains and a focus on niche manufacturing. This ABC feature, Australia’s Manufacturing Pivot in a Post-Coronavirus World as COVID-19 Creates a ‘New Era’ for the Economy, goes into more detail.
Summary.
Strategies developed for the respond, recover and reimagine phases should always be focused on driving and developing customer value. Useful tools to help visualise this includes the value proposition canvas, which you can learn more about at Strategyzer.com.
A word of caution—while you work to implement new initiatives more quickly than ever before, you should still be testing and validating new product and service concepts with your market/s. A simple way to do this is reach out to existing audiences and customers through digital communication tools including email marketing and social media.
While challenging, business owners need to avoid falling for the trap of focusing on running their business from day-to-day, and instead, focus on being strategic and implement ways to ensure the business emerges from this pandemic—even if that means emerging as a slightly to fundamentally different business.
The Business Resilience program is designed to assist Victorian small businesses affected by COVID-19. Support includes free access to online workshops and resources.
Business Resilience Workshops
Eligible participants can attend free virtual workshops on topics pertinent to the impacts of COVID-19 on small business. This includes strategy and resilience, finance and technology, customers and marketing, human resources, and mental health and wellbeing. Visit our Business Resilience Workshops page for upcoming topics and booking links.
The Business Resilience program is delivered by Melbourne Innovation Centre and the ASBAS Digital Solutions program.
