COVID-19 has got the attention of the world, and a great deal of information has been published about the pandemic in recent months.
As a nation, we did everything in our power to slow down the COVID-19 spread, and at the end of level 4 four weeks lock down, roughly 400,000 of us headed back to work. New Zealand is hopefully at the tail of the epidemic, and with single-digit new cases, we would likely move on very soon. So, what next?
Firstly, don't loosen up just yet as keeping up the social distancing is still important. We can see how the virus was almost under control in Singapore before rebounding.
Secondly, we are looking at the rapidly evolving threat around the economic recovery. The four weeks level 4 shutdown impacted the business community across the country, potentially sending unemployment numbers as high as 25 per cent.
At the time of writing, according to the Ministry of Social Development, more than 335,000 people are receiving job-seeker support. While the number had not yet reached the level seen during the global financial crisis (2008), the pace at which people were seeking support is faster than anything it has experienced before.
Also, as a nation heavily dependent on trade and tourism, we are looking at disrupted global supply chains that have already resulted in significant loss of revenue and adversely impacted our economy. Recent studies have shown that despite the government's efforts, a U-shaped economic recovery is more likely in New Zealand with a modest improvement from 2021.
So many of us are facing some serious and transformational questions: will we return to mostly 'business as usual' after a couple of challenging months? Will it be a prolonged impact on our businesses? How can we respond, recover, and eventually thrive?
Responding to this level of disruption requires a structured approach, but it's tough to be precise when everything is changing by the day.
In the coming months, we might feel it’s 'business as usual' at times but may then suffer short periods of disruption brought on by escalating social-distancing interventions. The main objective for businesses should be understanding the impact of these disruptions on your industry as a whole, and becoming robust and adaptive enough to handle them. So now is the time to make a plan not just to survive, but to be ready and robust in the post-COVID-19 world.
Those businesses that succeed with customer-retention and improved strategy will come out stronger than their peers with a significant competitive advantage and be able to strengthen their position in the post-COVID-19 ecosystem.
Test your robustness: It is a good practice to gauge how well your business is positioned to absorb the unknown shocks in the short and long-term. Do you have a robust financial position, how suitable is your IT infrastructure, employee morale, customer loyalty, supply chain, etc.? This type of assessment should outline any areas for improvement.
Think, plan and act: Businesses need to embrace a core set of capabilities and behaviours to gain resilience. They need to go beyond their usual business analysis and think about a broader set of future scenarios. There is a need to plan not just for business as usual, but for any potential new opportunities.
Customer and brand: How is your brand/business perceived right now? Are you seen as empathetic? Maybe you need to switch to new ways of selling (such as online) or new ways to do business? Agility is critical while staying close to your customers and understanding how their behaviour is shifting as we all move into the next phase.
Financial management: Businesses could face huge liquidity risks in the short term. It is a good practice to refresh cash flow and revenue projections and then also look at cost-cutting activities. Also, businesses need to keep track of all the government stimulus schemes that may prove helpful. In such times, many will find they need to put their pride to one side and reach out and seek government agency support.
Right now, it is safe to assume that some socio-economic shifts will likely persist well beyond COVID-19, and many sectors will re-emerge to new market realities. None of us can say what the future holds, but by acting swiftly and asking the critical long-term questions, your business and team will be better prepared for whatever comes post the lockdown. Therefore, take time to thoroughly review all activities, top to bottom, to come out the other side as a more efficient and sleeker business.
Historically, difficult times for mankind have led to some of our most notable achievements. This time is no different.
Kia Kaha (Be strong)
Kia Maia (Be steadfast)
Kia Manawanui (Be willing)
Nick Stewart is an Authorised Financial Advisers and CEO at Stewart Group, A Hawke's Bay-based CEFEX certified financial planning and advisory firm. Stewart Group provides personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver solutions.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
