At the onset of the coronavirus (COVID-19) outbreak, hundreds of thousands of employees moved from working in offices and workplaces to working from home in a matter of days.
In the future, business historians will cite this as one of the best examples of business agility in the modern era – and businesses can be rightly proud of what they have achieved.
Unlike the services sector, product businesses – manufacturers, wholesalers and distributors in particular – can’t necessarily send their employees home. Production lines cannot be set up in a living room.
Yet in challenging times, manufacturers are an ever more important part of the economy – delivering the supplies to keep the country and its businesses going.
So how can you adapt your business and make the most of new opportunities? There’s no single playbook but you are by no means without options. Here are five tips to follow.
1. Work on the business, not in it
Forbes Burton is a business rescue and recovery consultancy. Rick Smith is the managing director and his job is to find solutions when business owners can’t.
He says: “I think the key to adaptability is understanding your operation.
“When I go into a business, I’ve got no blinkers on. I’m not emotionally attached to the business and I don’t know the staff, so I approach it with an open mind.
“Gathering basic management information is sometimes quite problematic. Owners often don’t have a bird’s eye view because they spend too much time working in the business, rather than on it.
“Step back from the coal face and look at it from a broader perspective. Only then can you assess a business logically, go back to basics and sacrifice the sacred cows.
“The most dangerous thing I hear is ‘well, this is how we’ve always done it’.
“Every business must adapt and the best way to achieve that is to allocate management time. Delegate other people to handle the day-to-day running of the business, while you solve the big problems with logic, clarity and honesty.”
2. Make adjustments where you can because there will be plenty
Amazon is both the poster child and the bête noir of the retail and logistics industries.
It clearly has the deep pockets to make dramatic adjustments to its operations – something most manufacturers and logistics businesses could only dream of – but the speed and breadth of its response is also admirable and wide ranging.
Amazon has been posting daily updates about its response to coronavirus and, alongside plenty of noble initiatives, is the fact that the company has implemented no fewer than 150 process improvements.
These include day-to-day adjustments such as:
- Handwashing stations
- Provision of gloves, hand sanitiser and wipes
- Social distancing (and the allocation of ‘social distancing ambassadors’)
- An enhanced area cleaning regime
- Alteration of layout of break rooms and kitchens
- Meetings replaced with text messages and signboards.
All of these keep the business thriving – and none are so expensive that only an Amazon could afford them.
Manufacturers can learn from Amazon’s obsessively granular approach: every process in its supply chain is monitored and optimised, whether in good times or bad.
If you think you’ve found every opportunity to refine your business to safely keep the lights on, you probably haven’t.
3. Pivot to new activities or business models
To keep things moving, one answer might be to change the business completely.
The Sausage Man is an importer and wholesaler of specialist German sausages to the catering trade.
Jorg Braese, the company’s sales director, says: “Our customers are pubs, restaurants and events. So when the world changed, on the day of lockdown, our revenue literally dropped to zero.
“I thought about targeting residential customers and discounted the idea.
“But then I went to the supermarket to do my weekly shop and went down the sausage aisle. The shelves were absolutely empty.”
In the space of a week, Braese’s team had added consumer-facing ‘packs’ to their website – batches of sausage products that are large enough to profitably deliver but small enough for consumers to want to buy.
(His WordPress website with a WooCommerce back end is now also integrated into business management software for easy back office administration.)
A Facebook advertising campaign is bringing in a steady stream of business, including repeat buyers.
Braese says his consumer side will continue to be a focus when his wholesale business returns to normal.
He adds: “Residential will definitely one of our ongoing markets – people are referring us to their friends, so it would be a shame if we didn’t carry on. We need to keep refining the offer.
“Previously, we didn’t have the infrastructure, the packaging materials or the pricing models for smaller orders but we’ve managed to make it workable in a crisis, so now we can refine and expand it.”
4. Reconnect directly with customers because everyone is a consumer
The direct-to-consumer (D2C) model is not an option for everyone. However, recognising consumer behaviours will still yield important benefits.
The irony of digital technologies is that we are more connected than ever, yet we are all much more isolated and individualistic in our work lives.
We read more sources and reviews than ever but spend less time sharing our opinions with our peers and plenty of decision-making happens in isolation.
Smart marketers have realised for many years that, even in a business to business (B2B) setting, we are all consumers and we can all be targeted as individuals, not just as representatives of a business.
The coronavirus situation has served to accelerate this isolation. Strengthening the digital connection must therefore become a renewed priority.
Dept, an international digital agency, helps businesses envision digital success. Indeed, it’s a pioneer of D2C. But a key component of Dept’s D2C advice applies to everyone: put effort into communication.
Jonathan Whiteside, principal consultant at Dept, writes: “As COVID-19 continues to affect businesses, companies are losing the face-to-face contact that creates a personal connection between the client and the business. Field sales teams are restricted to working from home.
“Without these contact points, your digital operation, in particular the company website, can become a primary source of contact with the existing client base, and with any potential customers that are looking for a solution to the challenges they are currently facing.
“Any on-site visitor is a chance to boost brand affinity, to upsell and cross-sell, and to learn more about the needs of your business’s audience.
“There’s lots of opportunity to be found in optimising the functions of your site.”
Whiteside suggests re-evaluating your website as a communication tool, adding live chat functionality (which is now available off the shelf), for example.
But even if email is the pinnacle of your online reach, there has never been a better time to invest in deepening your customer relationships digitally.
Nobody expects your business to stay the same.
The advice available from your customer communities will ensure that the future direction continues to meet their needs.
5. Reimagine what your business could be
The hallmark of our discussion so far has been a rigorous and granular reassessment of processes in the business, with no ideas or approaches off limits.
But big challenges enable big changes and coronavirus is a justification to make fundamental alterations to your operation.
Analysts McKinsey says: “The organisations that reinvent themselves will emerge much stronger than those that simply work to reclaim their pre-COVID-19 position.”
Among McKinsey’s opportunities for transformational reinvention are:
- Co-operation and alliances as ‘frenemies’ work together to promote technology innovation while reducing the funding burden.
- Workers’ roles as businesses further automate warehouses, plants and facilities.
- Geographic footprint as global supply chains increase the exposure to health impacts, disruptive trade dynamics, and an uneven global recovery.
- Sourcing as the incremental costs of redundant sourcing outweigh the hazards of sole sourcing.
- Costs as a shift from fixed to variable cost enables a lower break-even volume in times of high volatility.
The effort required to refashion day-to-day operations to survive the present circumstance is of course important. But the most forward-thinking businesses see disruption as an opportunity to restructure for the future.
Coronavirus and your business
We’ve gathered information and resources to help navigate this situation. You can also find out about support for Sage solutions, including enabling home working.