How to effectively run a company in the new business reality?
Various types of restrictions imposed by governments due to the COVID-19 pandemic, such as the closure of shops, restaurants, service facilities, shopping centres, the ban on travelling, gathering and finally the closure of borders, have led to the collapse of many economic sectors. Business was not prepared for such restrictions. Now it is important to realise that such situations can happen again and become a permanent risk for business.
The strategy and business model
"Change or die" said Jack Welch. These words have now become prophetic. If an organisation's environment changes faster than its core, it may not survive. That is why it is very important to revise the strategy again. While sharing information with clients, one should listen to their real needs resulting from the new, post-pandemic situation. Some restrictions still apply, face to face business meetings are limited, and the use of public transport is also restricted. It is possible that the clients of our clients have lost their jobs or are afraid of infection, personal protection measures are needed everywhere, most transactions are carried out remotely in a contactless reality.
The work environment has also changed completely. Employees have learnt to work from home and to use the IT tools designed for this purpose, company premises are now empty and documents are being digitised. Therefore, it is necessary to revise the organisations’ strategy.
It is also important to maintain business solidarity in supply chains. If one of the companies involved in such a chain has a problem, this automatically translates into the others. That is why it is so important to have a frank exchange of information with partners who are jointly building value for the clients. In recent months, there have been many reports of rent reductions or postponements of rent payments being made by landlords whose tenants have found themselves in an extremely difficult situation. Unfortunately, in most cases, companies could not count on the special treatment by their business partners.
In this new reality, every company should re-think the following questions:
- Is the strategy implemented the most effective for the present days?
- Does the business model adopted allow for the highest possible profits?
- Is it not worth considering the change of the form of operation and cooperation with clients and contractors (on-site vs online), the form of cooperation with suppliers and the types of distribution channels?
Organisation of an enterprise
Pandemic reality leads to a completely new approach to running a business. Organisations need to become some kind of start-ups that are constantly modelling their business.
The organisational structure of a company should be verified in the first step. Only flat organisational structures allow you to manage your organisation efficiently and make quick decisions. The information that breaks through the multi-level structure of the organisation is distorted, and when it reaches the recipient it is often out of date.
A second point is the approach to business management. The top management should be involved in strategic decision-making processes much more often than it used to be. At the top level - not once a month but once a week, and at the operational level - not once a week but every day. Agile methodology, where self-managed teams meet daily for short, literally 15-minute sessions can help here. In the agile methodology, another important feature is to focus on issues that are crucial for the whole organisation, and all less important ones are described and postponed for consideration later on.
All of the above-mentioned issues are related to the business processes of the organisation. If a company operates in a process model and the organisation is aware of this approach and the processes are well documented, the situation is clear. The course of processes should be verified and adjusted to the implemented changes, including the following:
- simplification of the corporate structure,
- change to the responsibilities for processes,
- making decision-making processes more efficient,
- reducing the length of implementation procedures.
The organisations which do not have process awareness and have no documentation of business processes are in a much more difficult situation. In such enterprises it will be necessary to build such awareness and then to model and describe:
- the key processes - revenue-generating ones,
- support processes which allow the company to maintain its ability to operate, such as accounting, HR, purchasing or administration, and ending with the management ones.
The modelling may concern the present (AS IS) and future (TO BE) situation or TO BE straight away. It is important to be supported by appropriate process modelling tools when analysing business processes. Then a multi-level process model can be created. It will be clear and understandable to all participants of the processes. The processes should be published on the intranet and accessible to all interested parties. Any improvements and suggestions should be verified on an ongoing basis and, if necessary, implemented as part of the process model.
Every organisation developing a long-term strategy should ask the following questions:
- Are internal processes effective and adapted to the new reality?
- Do resources (human, IT, and materials) ensure efficient functioning?
- Are costs flexible enough so that an organisation can easily adapt to a rapidly changing market?
The digital economy
The labour market has undergone a significant transformation during the coronavirus era. The employees of the offices have learned to work remotely. The digital transformation of businesses has been forced to accelerate. Documents had to be digitised so that their digital versions could be edited in a highly dispersed environment. Workflow solutions (ECM - Enterprise Content Management or DMS - Document Management System) have played an important role in this process. A lot of structured and repetitive and thus tedious operations can be automated with RPA technology (Robotic Process Automation). To describe digitisation and automation processes it is necessary to use the tools called BPM (Business Process Management) or BPMS (Business Process Management Suit). These tools are essential for describing processes and selecting those that can be automated and robotized. ERP class applications in certain companies can exchange data on orders and invoices. The production plans are created on the basis of electronic demand from the clients and the production process can then be started.
Most information is obtained from devices equipped with IoT - Internet of things. Devices can inform about shortages in supply by verifying the inventory on the shop shelves or whether it is necessary to replace components that have a certain life expectancy or expiry date. Drones can already make contact-free deliveries. All the above-mentioned elements of the digital economy send a signal that there will be no turning back from this trend, that is why companies should open up to digitisation and look for their place and competitive advantage in this area.
Time after the pandemic will be a new normality for business, in which nothing is given once and for all. Only companies that are able to adapt their businesses quickly to changes in the business environment will survive. Agile activities, strategic and organisational changes, digitisation or finally the rapid recovery of their revenues will determine the competitive advantage in a turbulent business environment and, as a result, the future of companies.
Areas crucial for verifying the potential for digital development:
- Does a company sufficiently take advantage of the opportunities for automation and use of systems to manage a company, make decisions, circulate documents and run operations?
- Will the use of robotisation for improving the efficiency and quality of work really prove successful?
- Are the systems and solutions implemented in the organisation used up to 100% with respect to their capabilities and their adaptation to the company's business model?
