Advisory | | Mar 31, 2020
There is no sugarcoating the fact that the coronavirus pandemic is affecting everyone in our country. Businesses that require face-to-face interaction with customers, from restaurants to dentists to theatre companies, are being shut down. The companies that serve these businesses, from marketing consultants to payroll companies, are feeling the impact. Moms and dads are homeschooling their kids with the help of wonderful teachers.
Of course, the people who have suffered with COVID-19, and the people who care for them each day, should always be in our thoughts.
This article is not intended to minimize the hardships people are experiencing. There is, however, a silver lining to be found in every crisis, and the current crisis is no exception. The coronavirus pandemic will force organizations to rethink how they work. More importantly, this crisis is shining a new light on the human element of business and the fact that people will determine how strong an organization will be once the storm has passed.
Priority One: The Health of Your People
Many organizations are in survival mode. Surviving makes it possible to continue to employ and pay their people. As they figure out how to keep going, they need to give their people the time they need away from the office. Allow them to practice social distancing to reduce their risk of getting sick. Make sure at least one parent is home to care for and homeschool children.
The biggest question to ask yourself is this: what can you do to support your people when their day-to-day work tasks are not exactly high on their priority list?
The next step is to figure out the temporary and permanent effects on the revenue of the organization. In many cases, difficult decisions will need to be made. The key is to figure out a way to survive and eventually grow so you can support a higher number of people – both your employees and the customers you serve.
The 9/11 Effect on Business Response
After 9/11, Prager Metis took in an accounting firm that lost their office. They had no files, no computers, and no workspace, but we provided them with the means to rebuild. If they had laptops instead of desktops and their files were stored in the cloud, rebuilding would have been much simpler. Instead, they had to start from scratch.
If you look back at every major crisis we have faced since 9/11, including Hurricanes Katrina and Sandy, and the Great Recession, organizations have had to continuously evaluate their preparedness for these types of events and develop plans to minimize disruption.
That could mean implementing business continuity and disaster recovery plans, migrating data and applications to the cloud, and embracing the concept of remote work. That could mean purchasing a business interruption insurance policy and having a working line of credit in place. After all, it’s a lot easier to borrow money when you don’t have an urgent need. Organizations should also prepare by appointing a volunteer Chief Crisis Officer to serve as the point person for crisis management activities.
In other words, what steps can we take to reduce the risk of being severely impacted by different types of crises? Asking this question and implementing the appropriate solutions and strategies are enormous positives that emerge from negative situations.
Change Becomes Permanent
After 9/11, the first significant moves to the cloud occurred, while backup and redundancy became much higher priorities. Over the years, remote access to corporate data and applications, video conferencing, group chatrooms, and file sharing have shifted from luxury to business necessity. These solutions have been enormously successful at Prager Metis since the coronavirus outbreak.
Each time businesses have been faced with a crisis since 9/11, they have become more reliant upon technology. Why? First, technology helps people, as well as the organization, become more productive and efficient. Instead of trying to cut costs by replacing people with technology, effective leaders use technology to create competitive advantages.
Second, older generations who traditionally have been resilient to change become more open to trying new things. Remote working, flexible schedules, and newer modes of communication, which younger generations have supported since day one, gain acceptance among older generations. They’ll not only be willing to change old work habits, but they’ll also see the future of work and recognize the value of these changes.
This is why change becomes permanent. Has any organization moved from the cloud to an on-premises data center? Have they ever replaced laptops with desktop towers? Is anyone looking to dump Office 365 in favor of the CD-based software that IT staff used to install on every employee’s computer? These changes are positive developments to businesses in general, but may only become a focus after a crisis.
Think about changes to your daily life outside the office. Perhaps you bought groceries online for the first time because it’s safer than going to a store during a pandemic. Once you experience the ease and convenience, can you see yourself getting in the car, driving to a grocery store, grabbing a cart, walking up and down every aisle, waiting in line at checkout, loading groceries into your car, and carrying them into your home? Do you really want to carry heavy bags of dog food to your car when you can order online from Chewy.com?
The grocery store will still be there when you need something right away and it will still be the first option for most families. That said, I expect to see a sharp, permanent spike in online grocery shopping. If it makes life easier, why go back to the old way?
Continue to Challenge Old Models
As Prager Metis navigates the new reality caused by the coronavirus, we’re asking important questions about the sustainability of the current model. Is it possible to develop business relationships if you’re not meeting, greeting, handshaking, and networking face-to-face?
Can webinars be as successful as a live conference? Instead of holding our annual summit the traditional way, can we hold it virtually? What is lost and what is gained? You might save on airfare and accommodations, but you’ll lose opportunities to collaborate and get to know people. You’ll also miss out on valuable time between sessions when relationships are built and deals are often struck.
Just because you can do something doesn’t mean you should. While technology will provide options that didn’t exist in the past, it will never fully replace the confidence and trust gained through in-person, human-to-human interaction. People will always be clamoring for social interaction, but lower-value tasks that can be performed by technology won’t go back to humans. The key is to strike the right balance in your daily operations and be prepared to shift to technology-focused processes when circumstances dictate.
Look at restaurants and other service industries that have been hit the hardest. Are technology-driven restaurants that allow you to order from your smartphone or tablet better prepared for crisis than restaurants that require you to visit their physical location to place an order?
The accounting industry is shifting its focus from compliance to consulting. In the future, a consulting practice will be impacted by a pandemic more than a compliance practice. Compliance is mandated and must be done, while consulting is somewhat elective. For example, tax returns need to be filed, but special projects can be pushed to the backburner. At the same time, this could be an opportunity to expand consulting services because people need more guidance in times of crisis. The leadership of Prager Metis will need to be ready for these types of challenges.
Taking the time to challenge old models will leave your organization in a much stronger position after a crisis.
The Silver Lining
I know it can be difficult to see positivity under these circumstances, but we must continue to push forward as individuals, employees, executives, and business entities. The silver lining of this situation can be found in many forms if we have the will to identify it, analyze it, implement it, and commit to it. Ultimately, technology will help you get through times of change, but the human element will determine how successful you are and ultimately make your world, worth more.