This morning I presented to a business forum on the effects of COVID on Business Strategy.
Changes to Business Strategy
The traditional approach of businesses of long, mid and short term strategies are currently on hold for many businesses. Many businesses now just have a long term strategy and a rolling short term approach.
The short term strategies are focused on cash flow and keeping the business open. A decision today can be changed tomorrow due to a government announcement, the loss of clients, your supply chain or your products and services losing relevance.
Long term strategies are now focused at the end of this downturn. What will our business look like in 2-3 years? Businesses need to be comfortable with several scenarios and not lock in a traditional strategic direction.
These scenarios need to cover issues such as;
- When will a vaccine be available and rolled out?
- When will borders and full trade be able to return to “normal”
- What does the new normal look like?
- Are my products and services still relevant to clients?
- Is my supply chain still going to be in place?
Strategic planning is more important than ever. The approach and timeframes though are likely to remain disrupted for the next couple of years. It would take a brave leader to commit to a long term strategy at the moment.
It should though be noticed that for a significant portion of the economy, no change has occurred, and it is business as usual. This will create a two-speed economy for a significant period ahead.
Those leaders who get the strategy right will be the winners, in a time where there will be a lot of losers.
David Nixon is a Business Advisor, Entrepreneur and Director.