The Survival Phase of Pandemic Adaptation
COVID-19 has turned business on its head around the world. Managers of businesses large and small are facing massive challenges in adapting to just how much the world has changed in a few short months. As technology consultants to Australian businesses, we’ve seen some patterns emerging. Some businesses are adapting much more successfully than others. The ones that are doing best are the ones who aren’t trying to do everything at once. What we’ve seen is that the businesses who are adapting most effectively are the businesses that work “one step at a time” through this adaptation process:
- The Survival Phase – where they focus on what it will mean to still be in business after the shutdown.
- The Optimisation Phase – where they take time to settle into new, smarter, distributed operations AND make sure they’re really working effectively.
- The Transformation Phase – where they start developing and innovating to build/ re-build products, services and their business.
What difference does it make to work in phases?Life gets simpler – because you’re focussing on one step at a time. When you’re clear on what survival means for you, you can make good decision about cutting costs. You’ll know the right ones to cut and the right level to cut them. That means that you’ll have more resources to do a good job of your optimisation and invest in your transformation.
What exactly is the survival phase about?The survival phase is all about making sure your business is still there when things restart. This is not easy – some people are finding a business they spent many years their lives building is at risk of evaporating. The people, the processes, the products and the services they’ve invested years in building have been turned upside down. Your first job in this phase is to do the “grief work” and process through any shock, denial and anger to acceptance. The faster you can accept that the world has changed dramatically – and the old ways of doing things are simply no longer relevant to the emerging new normal – the better your chances are of surviving. Once you have accepted the loss and ready to implement change you have an important question to answer with a clear mind.
Begin with the end in mindTo be able to answer this properly you must have a clear idea of what survival will look like for you. It could be as drastic as hibernation or to execute a ‘graceful dismount’ so that you can sell your business or leave that market in the best possible way. For others, it might be to operate at 10%, 30% or 50% reduction in capacity/revenue. Whatever it is, your answers to this question becomes your survival strategy. If they are good answers they will fulfil the fundamental needs of your business :
- to service its debts right now and
- to be the type of business you want as a foundation for the next stage after survival.
Ask yourself “What DON’T I need in order to survive?”So don’t just stay stuck with the mantra ‘I must survive’ if you want to cut the maximum appropriate costs out of your business and still be in the position to trade both now and as you transition into a post-Corona world. If you just cut costs without any consideration of where you want to be when you come out of this crisis stage then you might as well shut down now. Yes, if you just need your business to survive for now and be here tomorrow then it’s about costs – but strategically. Survival requires a basic strategy – a strategy built around your key objectives. Not a strategy based on the way you used to do business – a strategy based on the way you need to do business to survive.
Put your focus on the whole of your businessTo survive, a whole-of-business IT cost reduction process is invaluable. You need to review everything associated with your technology to find out what’s old, what’s unnecessary, what’s now irrelevant – and especially what’s vital innovation. For example, one of our clients is a Real Estate Agency. They’ve already shrunk by 2/3 – only 1/3 of their workforce is left. They don’t know a whole lot about what the real estate market will do over the coming years. When I first spoke to them, they said: “We don’t have time for a strategy, we’re just trying to survive until Christmas”. That was enough – they were telling me they still want to be in business this Christmas. It might be in a vastly reduced way – but they are still planning to stay in business. That’s an objective we could work towards. We didn’t just look at what we already did for that agency – we looked at their whole technology-related spend. We worked with them to identify what was core technology, and what was costing them money that was no longer relevant to their survival. We said: “Tell us what your plans are, how you operate, what your business expenses are, what your objectives are. Then we can advise you on how best to reduce your costs without unwittingly damaging your ability to optimise and transform.” Another example is a medium-sized company with it’s own small IT department. They had to put the whole department on leave without pay. We have been able to keep the basics of his department running through a managed services outsourcing program. That enables the business as a whole to survive, while they manage their way through the survival phase. Then they can plan for the optimisation phase, with time to decide who they can keep for the longer term.
Data + strategy = survivalWhen you have clarity on your objectives and needs, plus a whole-of-business cost analysis then the “what to cut / what to keep conversation” becomes more balanced (though often still heart-breaking). In many businesses, the services and tools they use have accumulated over time. Things work “well enough” – but there are often better and less expensive ways of doing things that could save them money. We’re in the business of business efficiency – that’s what IT has always been about. If you need help to analyse your costs and potential savings you could make, get in touch today.
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