06 Mar 2020
Written by Andy Walker, Partner at Oliver Wight EAME
It’s hard to imagine that two months ago hardly anyone had heard of Coronavirus (COVID-19) and now its impact on people, businesses and governments is being felt worldwide. The fact is a ‘pandemic’ was always going to happen, considering the interconnectivity of people across the globe in 2020 and the fact that a person can encounter several thousands of people within a day.
We are already seeing panic buying taking place (especially for antibacterial handwash and hand sanitiser) and the future suddenly seems less certain than it did only a few weeks ago. We have also already seen a fluctuating stock market, the cancellation of major events, and the share prices in some sectors, such as airlines, severely impacted. The knock-on effect of decreased production output from China, one of the biggest manufacturing countries in the world, has had a significant impact on global supply chains in many industries, including technology, retail, automotive, food, tourism and aviation.
With this considered, the question for businesses is - in such a turbulent world, how realistic is it to plan?
Preparing for the unexpected
The answer is very realistic! The quality of your planning will determine if you’re a company who succeeds or one whose survival is at risk. The challenge for most businesses is that they have several plans in place and often they are short-term and unrealistic with an inherent and inbuilt bias.
Although it’s impossible to predict the specifics of future events, it is still possible to be prepared to a level that will help minimise the impact on your business. A business management process such as Integrated Business Planning (IBP) provides one long range integrated plan, allowing businesses to regularly take an outside-in approach, helping to identify vulnerable areas of the business and close gaps.
This starts with asking the right questions, i.e. what if our major supplier is unable to operate? These questions help to uncover the types of events that could pose a threat to your industry and will provide a focus for the contingency plans that need to be put in place to prevent major disruption to your business.
Seizing the opportunity
Having the right processes in place puts you at a distinct competitive advantage. Some of my clients who have a mature IBP process are able to not only develop and dynamically maintain a realistic plan, but also develop scenario plans based around that plan. Those scenario plans drive decision-making and become even more critical as the level of uncertainty increases. Whilst IBP could never have predicted Coronavirus, it could have enabled business to make the plans and decisions required to better deal with it.
Ultimately, it should be the role of the management team to look to the future, but instead, too many leaders are caught up in day-to-day operations and decisions that should be handled at a lower level of the business. This leaves them no time to develop one long-range integrated plan, which is vital for the business to be successful.
From a management perspective, it is only logical for business leaders to ensure that their organisation is prepared for the unknown – not only to mitigate any potential risks to their operations, but also to make the most of the opportunity. After all, it could enable them to get ahead of the competition.
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