Quarantine! Wash hands! Social Distance! Lockdown! Self-Isolation! These are words/phrases that all who have, lately, been living on our beloved planet – earth – must intimately know by now. Thanks to the mighty COVID-19! One only needs to log onto any social media network or switch on any radio or television station to receive an avalanche of information – both from the experts and the… let us call them “almost experts”.
You must already know that, world over: schools are being closed; sports events being postponed; flights cancelled; social gatherings restricted; international conferences suspended…so I won’t waste your time with that.
Permit me to digress a little and take you along my professional path of risk management. When delivering trainings about Risk Management, participants have often been asked what their understanding of “risk” is. The answers have been along the lines of “the likelihood of something really terrible happening”, and the like. Well, they are right. But only, in part. Risk – in its broader sense – is defined as:
“the possibility that an event will occur that will impact the achievement of objectives”.
The impact, may be adverse (providing threats) or favorable (providing opportunities) to individuals, institutions, economies, etc. Most people are predisposed to only addressing themselves to the adverse/threat component of risk, and miss out on the immense opportunities that risks carry.
Back to Mr. COVID-19, or should we call her Ms. COVID-19? Okay, we’ll pass on the gender. Since the media is well awash with the potential adverse effects, this article seeks to attend to some of the immense opportunities that arise to businesses in Africa. We have adopted ACLAIM’s 7 Pillar Business Model [1]in examining the probable opportunities [People, Prospects, Partners, Products, Processes, Property, Prize].
Opportunity to implement remote-working
The remote-working practice has been in place for a while now, though not many businesses in Africa have attempted it yet, or have done so in an impromptu manner. Let us tease out some of the potential merits for adopting it during a potential extended lockdown.
Performance measurement: Service-based work places have been accustomed to measuring staff performance from the perspective of their input (e.g. amount of time worked or presence at work). Now, an opportunity is presented to rethink their performance measures to focus more on results/outputs/deliverables.
The discipline and maturity of staff to work from home without physical supervision will have an opportunity to be tested. There will be a temptation for some not to apply themselves fully as they are not being watched. Conversely, there is a possibility of some overworking, as the usual office breaks – for lunch or to return home – will not be present. If staff excel in this setting, more and more companies will be open to adopt the remote-working method even after the COVID-19 pandemic.
Increased productivity and personal reflection: In most cities – where the majority of the businesses are located – people spend, at least, three to four hours each day to prepare to go to their work places and to return home at the end of a grueling day. Remote-working is an opportunity to save 60 – 80 hours a month for each employee. This time could be re-prioritized to allow the employee: increase their productive hours (and, by extension, the company); spend more time on deliberate personal reflection and development; among other strategic focus areas. It may also be argued that if people are allowed to work closer to their loved ones, they may feel less stressed.
Social Media finally becoming social: Is this not the opportunity that all have been waiting for – when Social Media actually becomes social? Remote-working could cause organisations to set up work-related social networks to reach out to each other, for example through WhatsApp groups, Slack groups, Zoom, etc. Rather than the unending sending of “forwards” (on WhatsApp) or “sharing” (on Facebook), this is an opportunity to develop new habits such as using the video call and audio call functionalities to check-in on how colleagues are before discussing the relevant work-related matters at hand.
Emerging-leaders
Crises do have a way of calling out innate leaders to emerge and take key roles. During such times, staff that possess leadership attributes and may not – at present – hold the relevant titles, tend to rise up and take their place. Whether that be through offering support over and above what is required by their job descriptions or suggesting and spearheading innovative ways to weather the storm. This will grant an opportunity to their business leaders to pause and take note of the latent talent resident in the organisation.
Improved work place hygiene
After consistently implementing the World Health Organization’s 40-second #handwashingchallenge, for at least a month, the good habit is likely to stick. Please look it up on Twitter (if you have not yet).
Customer relationship-building
Crises usually create an environment that fosters empathy. The COVID-19 lockdown is a good opportunity for businesses to build stronger relationships with both current and prospective clients. It is an apt time to demonstrate care by providing any support possible within the reach of the company. A time to apply the heart and less of a capitalistic profit focus. Some hotels are providing their facilities to healthcare professionals that are responding to the cause. Providers of Cloud storage software that support remote-working are providing limited free services to businesses that have not been on their platforms before. Mobile telecommunication networks have scrapped costs of smaller mobile money transactions, for a limited time. Public figures that are successful in building robust business are providing online advice to small and medium practices that are getting into panic. Business consultants, like myself, are writing articles such as these and sharing them with the community.
The world will not forget these empathetic actions that bring out the soul of the business.
Changes in business models
Extended periods of crises contribute significantly to changes in Customer Profiles. The current patterns of customer behaviors are likely to change due to the experiences during a crisis such as the COVID-19 pandemic. For example, some may start ordering in more frequently to receive deliveries at their doorsteps, even beyond the lockdown. Others may attempt/increase their online transactions. Such customer profile changes provide opportunity for businesses that are keenly paying attention to expand their Route-To-Market options and create more efficient business models.
Development of new Supply Chains
The COVID-19 pandemic has already caused disruptions in various supply chains. For example, imports from China – or other countries with significant production disruptions – that provide inputs to many supply chains, are expected to reduce significantly. Suppliers or suppliers of suppliers will scale down or even stop production for a while. This is a grand opportunity for businesses in Africa to evaluate the efficiencies of the existing supply chains. Is it possible to obtain some of the inputs locally? Is it possible to find alternative inputs to substitute what was being imported? Is it possible to apply Backward Integration (internally producing portions of the supply chain)? Answers to some of these introspective questions should lead to the building of more sustainable businesses.
Building and strengthening partnerships
Even more than before, during the COVID-19 pandemic, or similar crises, an opportunity is presented for partners in business that may have varying interests to pull together and address the effects of the crisis. It may also be an opportunity to build new strategic partnerships. For instance, during a lockdown, a business that has not been delivering to customers might partner with entities that offer door-step delivery services. If these relationships are well nurtured, they should last beyond the crisis times, increasing the delivery capacity of the businesses.
Product development and modification
The great Greek Philosopher, Plato, is said to have coined the maxim: “necessity is the mother of invention”. Crises like the COVID-19 pandemic, in the past, have provided an opportunity for some of the most ingenious innovations we still apply, to date. More than half of the Fortune 500 companies were founded during a recession. The Basketball was designed by A.G Spalding during the 1893-1896 recession. Henry Heinz invented Ketchup in the 1870s and released it to market towards the end of the recession in 1876. Diet Coke was released in 1982 during a very turbulent economy. And my favorite of these, which almost mirrors the COVID-19 pandemic – Isaac Newton developed his theories on calculus, optics and law of gravity while remote-working in 1665, following the closure of Cambridge University due to the Great Bubonic Plague.
What business do you run? What opportunities do you see to develop new or modify existing products and services during the COVID-19 related lockdowns? Schools that are closed, is this now an opportunity to think through delivering online (live or recorded)? Recruiters, how about Zoom/Google Meet/Skype/Webex, etc for interviews instead of meeting up physically? Trainers, instead of cancelling the trainings, how about exploring how to deliver the same (live or recorded) through online means. Supermarkets, how about sharing price lists of different items online or through apps with opportunities to order and deliver? Gyms, how about sharing with clients some subscription exercise-regimes they can try out from home till they are ready to return? Cab drivers or motor cycle riders, is this not the opportunity to deliver more than ever? Barbers and hair stylists working from specified locations, how about creating a mobile unit? All other businesses, how about thinking through how you can produce lower cost products/services given the reducing purchasing power of the market, hence remain relevant? How about creating products/services with a convenience value proposition for customers whose movements have been curtailed?
The opportunities to develop or modify the products our businesses deliver during current times are endless. Thankfully, the time to think through these is now available.
Testing Business Continuity Plans
A few businesses have documented Business Continuity Plans (BCP). These are systems, processes, policies created to enable a business continue to operate through a disaster and to come out victorious at the end of it. The current lockdowns give opportunity for businesses to test the robustness of their BCPs and explore ways to improve them even further. Businesses that did not have any BCPs in place have had the opportunity to develop, if only rudimentary ones, to enable them survive the COVID-19 storm. During these times, doing nothing is not a strategy to adopt.
Challenging existing policies, systems and procedures
During extended crises, the assumptions and motivations of the existing policies, structures and systems in the organisation that have been taken for granted, are challenged. The pre-crisis approaches to work may not be applicable during the lockdowns. For instance, human resource policies that require staff to be in a specific location from 8:00 a.m. – 5:00 p.m. may no longer be relevant. Biometric tools that require staff to clock time in and out may become obsolete. Processes and tools that measure performance based on staff time input as opposed to results may be challenged. The insistence on using physical documents with lots of signatures, if not replaced by electronic documents and signatures, may paralyze businesses. Do not miss the golden opportunity to challenge polices, systems, structures and procedures that may not be applicable during or after the crisis.
Investment in remote working tools
Especially for service-based businesses, to support remote-working, there is an opportunity for businesses to invest in technology that would enable staff to remain connected and also deliver effectively to clients.
Where required, subscriptions may be considered for audio-visual tools/apps such as: Slack, Zoom, Webex, Skype, Google Meet, Marco Polo, etc to keep staff in communication with each other and with clients.
It would be necessary to invest in accessible online storage tools such as: IDrive, pCloud, OneDrive, iCloud, DropBox, Google Drive, Box, etc. Most of these have free versions with limited functionalities, which may adequately meet the needs of smaller businesses. The medium and larger businesses with more complex needs will need to subscribe.
Given that increased remote work would lead to higher exposure to cyber risks, there will be need to invest in various forms of cybersecurity and to train staff in the relevant basics.
If not already available, some staff may also need laptops as well as internet access. Investment in all the above tools, some of which are free (especially the online tools) will increase the delivery capacities of businesses, both during the current lockdowns and in the post-crisis seasons.
The prize that a company wins for delivering a product/service – that possesses the requisite value proposition to a client – is the profit. All the opportunities mentioned above (people, prospects, partners, products, processes and property) are likely to – either immediately or ultimately – contribute favorably to the profit of the company. A few more direct opportunities are outlined below.
Opportunity to rethink the current cost structure
It is anticipated that there will be significant disruptions to the revenues of several businesses. In order to remain profitable or afloat, this will provide companies an opportunity to review the cost-structures and implement cost management strategies that will be useful even after the crisis period. We suggest that businesses consider ACLAIM’s C.R.I.M.E Cost Management Model as defined below:
Conduit: Evaluate the current costs incurred by the company and identify which ones can be channeled to other parties. For instance, if your business is considering delivery of products to the doorsteps of the customers, consider conduiting the cost of delivery to the customer. Examine your business, you will find some to conduit.
Reduce: Costs of utilities and other related costs are likely to reduce when staff are working from home. Renting smaller office spaces during the lockdown could be extended to life beyond the COVID-19 pandemic. Some staff costs may be reduced, for instance, by reducing the number of working hours and pro-rating staff-related costs accordingly. The staff may use the additional time to apply their dormant talent to earn in other ways. Think through, especially the bigger costs in your business, there will be opportunities to reduce.
Increase: Increase? Increase costs as part of cost management? Yes! There are strategic costs that a business needs to increase in the short-term in order to either reduce costs in the longer-term or, even, increase revenues. While increasing investment in remote-working tools could be a stop-gap measure during the COVID-19 pandemic, it could significantly expand the opportunities of the business through opening up new markets beyond the existing geographical boarders. What costs should your business strategically increase?
Maintain: Some costs may be maintained at current levels due to their strategic nature, and in order not to rock the boat too much to lead to a business capsize. What are these key costs in your company that should not be touched? Remember, there might be a temptation or pressure to maintain all the costs. However, tough times call for good leadership to be creative in ensuring results while maintaining relationships.
Eliminate: There is opportunity to completely eliminate some costs from the business. This is the time to question why the company pays certain costs, and whether value for money is received from them. Does your company need to pay for everything it is currently paying for? Some could be paused for a while and reinstated after the lockdown. Others could be outrightly eliminated.
Opportunity to increase revenues
As already discussed under the previous sections, the expansion of market opportunities, the creation of new products or modification of the existing ones, the building and strengthening of partnerships, all could lead to the business maintaining its current revenue levels during the lockdown, but would definitely lead to increased revenue during the recovery season.
Improved cash flow management
While effective cash flow management is paramount for any business, its importance during crises is even more pronounced. The COVID-19 pandemic will provide opportunities to businesses to scan the Balance Sheet with new lenses.
- Are there fixed assets that are dormant and not bringing in income? Sell them.
- Are there debtors that have not been followed up firmly to clear outstanding dues? Follow them up.
- Are there items of inventory/stock that have been slow-moving or not selling for a long time? They are holding up cash. Sell them – even at what they cost. Your business needs more of cash and not profit, at the moment.
- Are there creditors or suppliers of financing that you are due to pay in the short term? Holding discussions about potentially deferring payment, without losing credibility.
- Are there expenses that you had budgeted for but do not need to pay for immediately? Defer them.
Conclusion
The medical effects of COVID-19 are being studied and addressed by the medical experts, world over. The potential adverse effects to the global economy – ranging from a quick turnaround to a recession – have been ably widely discussed in different fora.
This article is, in no way, aimed at trivializing the possible adverse effects of the COVID-19 pandemic to businesses, neither is it a head-in-sand blind optimism, but it is an attempt to shine a bright light on the opportunities that are presented to businesses and other institutions when faced with crisis.
The vision of ACLAIM Africa Limited, the business that I am honored to provide leadership to, is simply to see “Thriving Organisations”. We define a thriving organization as one that is growing continuously, developing its capabilities to manage complex needs and meeting its objectives by delighting its various stakeholders (employees, clients, partners, shareholders, government, etc). It should be able to accomplish this in a dynamic business environment and to sustain this performance over a long period of time, even through economic downturns. Our hope is that this article will provide insights to businesses (including ours) that challenge us to Thrive.
Benjamin Disraeli, a British Prime Minister in the 19th Century is credited for the quote “I’m prepared for the worst, but hope for the best”. I will slightly amend that to read:
“While I acknowledge the worst, I’m preparing for the best”.
About the author
Alfred Brian Agaba is the Managing Director I Managing Consultant of ACLAIM Africa Limited, a leadership and management consultancy firm. He is an expert in risk management, governance, strategy, business modelling and finance, and is passionate about helping people and organisations thrive. He is Certified Entrepreneur Trainer and Consultant with Regent University International Network of Business Coaches and a Fellow of Chartered Certified Accountants. He can be reached at abagaba@aclaimafrica.com.
[1] Prospects, Products, People, Partners, Property, Processes, Prize.
