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Articles

Covid-19: building resilience and preparing for recovery

By Nathan Peacey

30 Apr 2020 | 4 minute read

This article is designed to support businesses with building resilience and preparing for recovery. You can either scan the full article or use the links below to jump to the various sections: an overview of market trends to consider, a visual map of our key considerations along the road to recovery and further information on each of these key themes.

For the majority of businesses, the initial reaction to coronavirus was about managing the shock, even for those with the most robust crisis response plans. While some firms remain in survival mode, many have been busy shoring up their ability to absorb the ongoing effects of the initial shock and starting to lay the foundations for recovery.

There has been much debate about whether the recovery will be V shaped (a short sharp dip followed by equally sharp bounce back) or a more extended dip – a U shape. Some sectors of the market will bounce back more quickly than others so a fallen over Y is a more useful visual. Another distinct possibility is a W, with an initial bounce-back as measures are eased followed by a slump and a more gradual returning to normal. Or possibly lots of W's if we have future increases in cases that require partial restrictions to be re-imposed.

In reality, the shape of the recovery for individual businesses (U, V, Y, W or variations on that) will depend on myriad micro and macro factors. This will include the pre-coronavirus health of the business and the shape of their marketplace post-pandemic and into the recovery phase.

What will the future marketplace look like?

This is a question many are speculating on, as well as the implications for different sectors. There are also the added complexities of Brexit, the growing humanitarian risks and environmental factors to consider, which are waiting in the wings to take centre stage again. Many think we will witness a new economic, and possibly social, order arising out of this "structural break" which may give rise to new opportunities. By no way an exhaustive list but here are some of the market factors which might drive change:

Market trends

Recession
Consumer sentiment
- Localism (and acceleration of anti-globalism/protectionism)- impact on supply chain)
- Heightened awareness of climate emergency and Sustainability
- Health (incl. pollution)

Consumer trends
- Saving (rather than spending) – being more prepared for a future black swan event
- Cost conscious (potential tension with aspiration for localism and environmental protection)
- Wellbeing – products and services, lifestyle shifts?
- Digital
- Nesting – will staying in be the new going out for a proportion of consumers
- Renovations not relocation
Infrastructure investment to kick start/sustain the economy – renewables, transport, digital infrastructure
Acceleration of automation (a pre-recession trend overlaid by desire to be less labour reliant and improve productivity) and using the opportunities the current crisis is throwing our to strengthen your competitive edge
Public sector economic intervention and corresponding increased state powers – will those be pulled back to pre-Coronavirus levels (link to data point below – state surveillance and control)
Vulnerable industries particularly challenged – leisure and hospitality, bricks and mortar retail, aviation, cars, tourism
Greater scrutiny of business that has benefited from public money (for which read all business). This will be by government, media, employees and customers. Purpose, People, Planet will surge in value compared to Profit. This was a market trend that will become mainstream.
The value of data in saving lives versus the challenge of privacy will come to the fore – will there be a lasting shift in sentiment?
Collaboration – we have seen organisations large and small working together to address the crisis – will that open thinking on ways of working together to address future economic and societal challenges?
Innovation – necessity being the mother of invention
- Ways of working
- Speed of change – “when we have to, we can”

The road to recovery

The road to recovery requires holistic thinking across a number of interconnected areas – below we've separated these into some strategic and operational areas for consideration, although undoubtedly there will be some crossover. We'd love to hear what you think is important for your business.

We have produced a handy one page visual of our suggested key considerations on the road to recovery.

You can also click through the sections of this below to read more about each area.

Strategic considerations:

Operational considerations:

What can businesses do to get ahead?

As businesses steady the ship for the near term many are also contemplating what they need to look like in the future, taking the opportunity to think of potential scenarios they might need to adapt to in the "next normal". This will of course be shrouded in uncertainty, but scenario planning can help inform potential commercial strategies which in turn will impact on current decisions on people, property, finance, supply chain, business model, investment ambitions, culture and leadership.

Naturally planning will be specific to each business, their sector, their customers etc. However, we've put together this list of key themes, including both medium and longer terms factors, that occur to us that may shape thinking and inform different scenario plans:

A 'once in a business time' opportunity

Emerging from this crisis will undoubtedly be difficult, challenging and, in some cases, devastating for individuals and certain businesses. It does however provide the opportunity to rethink and reflect. We've had many conversations with colleagues and clients who are adapting to the "new normal", taking positives from more quality time with their family, a greater appreciation for the outdoors and exercising, enjoying seeing people working from their home environments and less pressure on the working diary from travel.

At the same time there is much to reflect on what's changed at a business level and how this experience could be used to make your business better. It may be instructive to consider if you were starting today from scratch, anticipating potential future opportunities, how would you structure your business? What infrastructure would be needed – new or adapted?

We know of businesses that are doing gap analysis on what needs to change to survive, and then thrive. Some are using formal restructuring tools in a positive way to help shape a better going concern business post-coronavirus, e.g. company voluntary arrangement, restructure or administration light.

If you can find the headroom, use the time now to plan, build, analyse and grow the mindset and ethos in your business to change. People, Planet and Place need to sit alongside Profit for a sustainable future. You may need to use legal processes to restructure, change contracts (etc.), but challenge traditional thinking to unlock future value. Involve your employees, customers and other stakeholders in this process – they will have seen what works and you can use their experiences to generate innovation. Ultimately this should help drive engagement following what's been a challenging time for everyone and help drive business-wide focus and commitment to get back on track.

Getting in touch

If you'd like to talk through any of the themes raised in this article our team of experts are on hand and are able to offer a collaborative and holistic approach to supporting you with getting ready for recovery.

Drop us a line at [email protected] or contact any of the team members below.

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