5 ways to prepare your business now for the next major disruption
June 8, 2021
8 minutes to read
Opinions expressed by Contractor the contributors are theirs.
In more than a year since Covid-19 shut down the global economy, we have seen how this pandemic has changed the way we live and do business. And, despite warnings from Bill Gates and others, most people seem to view Covid-19, and the associated economic shutdown it ushered in, as a largely unforeseen – and unpredictable event. As a result, hardly any business on earth had prepared for the scale and scale of its impact.
With the rapid scale-up of vaccine distribution and delivery, there are signs that there is light at the end of the tunnel. Indeed, people these days are increasingly optimistic about a return to normal life (or at least a new normal in which mask-wearing, distancing and hand washing are more common) and Covid-19 will be one of those things that we are looking at. as nothing more than an obstacle on the way to continued economic growth and prosperity.
The problem with this view is not that it is wrong. In fact, it may be true that Covid-19 could not have been predicted, at least not with respect to exactly when it would first appear and the extent of its impact. It may also be true that, like all bad dreams, it will soon be forgotten so that we can all resume the status quo. On the contrary, the problem with this view is that it ignores the one (and most important) lesson we should learn from this pandemic; namely, that Covid-19 is not the first, nor the last, major shock to the world economy. And, while we can’t predict what the next shock will be, when it will strike, who it will affect, or how much it will affect them, we can take steps to isolate our businesses from this fatality before it’s too late. . In what follows, I outline five ways all business owners can prepare now for the next major disruption so they can weather the storm more easily.
Related: How to Prepare for a Major Supply Chain Disruption
1. Always scan
Because it’s nearly impossible to predict where the next major disruption will come from, you’ll need to look for signs of change globally. While there is no exhaustive list of factors to consider, the PESTLE (Political, Economic, Social, Technological, Legal, Environmental) framework provides a good starting point. When you analyze trends in each of these areas, be aware that disruptions typically affect different businesses in different ways. Some disruptions are system-wide, affecting virtually all businesses (such as those associated with economic downturns), while others are more local, affecting only businesses in certain industries (such as those associated with economic downturns). changes in purchasing habits) and / or regions (such as those associated with natural disasters). As an example, cryptocurrency is a relatively recent technological innovation that is increasingly having an impact on global markets. A marginal medium of economic exchange just a few years ago, it officially became mainstream, along with Coinbase, a cryptocurrency exchange that went public earlier this year. If the trend for cryptocurrency to become a widely accepted form of payment continues, it has the potential to radically reshape federal monetary policy, reduce reliance on traditional financial institutions, stimulate complementary technologies. and democratize finance. Whether cyber currency will be the next major disruption (or even a disruption at all) is a guess, but given its vast implications, it’s the kind of warning sign that should at least be on your radar (and not only if you are in banking or a related industry).
2. Invest in R&D
Even though business is booming, this is only a reflection of a temporary adjustment in the product market. And – spoiler alert – there’s a good chance your product or service isn’t a perfect fit for the market now and it sure won’t be tomorrow. Therefore, anticipate inevitable market changes (large and small) by constantly seeking and experimenting with ways to improve this adjustment. While this may not be the same for a landscaping company as it is for a biotech company, both can still benefit from investments in new ideas and new technologies that can improve scale, reach, scale, reach, scale and reach. efficiency and effectiveness of their products and services. Positioning your business as an R&D-focused business has two advantages. First, the ideas generated by this process can improve your current offerings, but more importantly, they can come in handy when a disruption upsets the status quo. Armed with the intellectual capital that you have created in this process, your business will be better able to adapt to new competitive bases (i.e. new products, new services, new features, etc. ) and compete with new companies that are not beholden to the old ways of doing things. Second, if institutionalized into your company’s culture, a focus on R&D encourages all employees to take a forward-looking perspective that will better equip and motivate them to respond to radical change.
3. Constantly reassess your business model
Besides acting like your product or service isn’t perfect, you also need to act like your business model isn’t perfect either. A business model is less about what your business sells and more on How? ‘Or’ What your business produces it, puts it in the hands of customers, and earns a profit from its sale. Considering the choices you’ve made today around these issues, think about how easily your business could adapt if one or more of these choices turn out to be irrelevant due to a disruption tomorrow. For example, Covid-19 has caused the closure of tens of thousands of outlets and restaurants, not because they could not reach customers other than in physical locations, but because they chosen not to to look beyond this age-old model until it is too late. Of course, that doesn’t mean that an online presence is necessarily the answer. In fact, cyber attacks against our Internet infrastructure are becoming more common and so it is not unjustified to assume that they will, at some point in the future, result in a major disruption of world trade. The point to remember then is to continually assess how and why your business is doing things the way it is and, in turn, to experiment with alternatives. Only then will your business model be flexible enough to adapt in the event of a disruption. If you wait until the disruption hits to experiment, your business is unlikely to survive the shock.
Related: 5 Leadership Principles For Crisis Management
4. Don’t wait until it’s too late to start caring about your employees.
When times get tough, entrepreneurs often focus on the survival of the business. After all, the business is their baby and they want to see it live into old age. While this emotional attachment is quite normal based on what we know about entrepreneurial psychology, it’s important to keep in mind that the business has no children to nurture, from college to college. to pay, elderly parents to support, and bills to pay. . But, its employees do. In the midst of a crisis where resources are scarce, it is difficult, if not impossible, to justify saving jobs rather than saving the company, especially in the absence of federal support, such as the Paycheck Protection Program. So plan for a crisis when resources are abundant by investing in your employees so that they are better able to withstand the lean periods that will come with disruptions.
5. It’s good to be afraid
If you think you are overreacting to disruptions that are not yet on the horizon, you are not. In fact, overreacting when times are good is probably not far from where you want to be. It doesn’t mean running around like your hair is on fire screaming that the sky is falling. This means making sure your team understands that while things are going well in the short term, times will becomes difficult, so everyone should prepare for this inevitable by being on the lookout for signs of the next apocalypse.
Ultimately, no one can know what the future holds. But, there are steps you can take today to prepare for an uncertain future. The more alert you are, the more you experiment with possible solutions to possible futures, and the more you invest now in those that depend on your business and on which your business depends, the better positioned your business will be to survive through inevitable hardships. time to come… when it can be.
Related: 5 Things You Can Do Right Now To Prepare For The Post-Coronavirus Business World