2020, a year that individuals will remember until the end of their lives. More importantly, the year has been more stressful for business people. COVID-19 has presented a very tough situation for the head management of every business. The situation demands confidence, high mental strength, and a bold approach by the business people. All types of companies have taken a hit, and even healthcare organizations face the troubles of unexpected excess demand, and it has been difficult for them to provide for this sudden rise.
- The real estate industry, hospitality industry, tourist industry, and more expect minimum to no business throughout 2020.
- The FMCG industry, entertainment industry, and other such industries who had previous stock are doing good, but with time, as production units were shut, they’ll also face delays and difficulties in managing demand.
- With the opening of the economy in current times, management consultancy firms have noted a definite rise in demand for their services. But this situation is like never before; businesses don’t know whether to re-establish themselves or wait until the scene gets better. Still, management consultancies firms can wait, as clients expect solutions.
Whether public or private, many companies and institutions have studied the market forces and projected the coming shifts and changes in the business environment. Throughout this article, you’ll read about the shifts that can be expected and for which businesses should be prepared. We highlighted the significant changes in the business post-COVID-19 or the latter half of 2020.
As far as a pandemic is concerned, it is still growing, but economies worldwide can’t afford lockdowns. Companies have started opening up, the head management and the management consulting firms are devising strategies to stand strong in this moment of uncertainty.
So Far, How’s The New Normal?
The acceleration of social distancing, digitized services, automation of processes, clear & well-defined communication, and creative & original thinking will define the market leaders in the latter half of 2020. What we mean here is, the current situation is never experienced before. So the process of refueling the motivation in staff, difficulties in remote work, achieving standard sales, and bringing the operations back to position left before lockdown will differ from company to company. The attributes of bold decision making, being patient in work processes, taking every step after necessary consideration, and understanding the consumer & health concerns.
The lockdown also meant that consumers must have a suppressed demand for many products and services. As the economy will revive, and consumers will have more cash in hand, the demand and sales for consumer products will likely increase. So businesses should start preparing for the economic opening and decreased tension among individuals. Currently, there’s a good rise in B2B dealings and transactions. The financial cycle has resumed with payments and orders being increasingly interchanged between the B2B enterprises.
Still, organizations are a bit hesitant in taking loans and overdrafts as they are uncertain about the future, and rumors of re-lockdown are also across the nation. Overall, businesses have started taking a step towards the new normal, and as per current trends, nations might be back to the standard economic transactions by late 2020.
Business Environment And Its Major Shifts
As we all know, the business environment has various stakeholders. These are suppliers, customers, consumers, investors, employees, and many more. Some stakeholder sections consist of many individuals while some not, and this depends upon the business to business as well. Understanding the business environment post-COVID-19 is all about understanding the stakeholders’ situation and expectations for the second half of 2020. Below are among the expected significant shifts:
- Government Health Policies
India, in recent times, has undergone few significant legal changes in terms of corporate and business. With the ‘Unlock’ phase of the economy, there have been some mandatory rules and regulations by the government to maintain safety and contain the virus. Every company needs to give the responsibility to an employee or a group to go through all the government guidelines regarding distancing, sanitizing, and other health concerns. These policies are bound to change with time. Also, HR needs to make sure that every employee is complying with the health laws. There can be strict actions against the premises in which employees aren’t practicing sanitizing, distancing, and other aspects: bigger the organization, bigger the challenge for management to maintain such policies. Businesses need to be ready to comply with all such health policies.
- A Cooperative Support
Supplier, Product/service provider, and customer, these three have a co-existing bond. Through every industry, a supplier either has stock or is in shortage of it. But in the case of goods like FMCG and other such sectors, the raw material also faces a risk of expiry. So suppliers are demanding a fast movement of goods with payments. Providers have increased the pressure of making old credit payments and the payments for new purchases as there’s a temporary shortage of raw material (in some industries). On the customer end, there’s a projected rise in demand for essentials and other consumer goods. Also, in B2B transactions, consumers have to be given a credit period as well. The consumers have a limited budget to spend, but they are accustomed to their consumption patterns.
In this scenario, the businesses that manage their finance and operation well can yield long-term benefits in terms of supplier and consumer loyalty. This is the time for companies to use a part of their reserves for easing their financial transactions and show strong, wise, & calculative moves. Allowing the necessary continuation of services and credit to the ones whose loyalty will be a crucial factor for companies in the future, a company can ensure a smooth business transaction in the future.
- Changing Consumer Expectations
Companies need to consider that such a long period of lockdowns has significantly altered the way a consumer perceives satisfaction, experience with the company, and their consumption pattern. Every industry needs to understand its merits and demerits with this. Some players in the tourism industry have found an innovative solution for their ceased business. The tour guides from the specific location can be hired by the consumer, who will be touring the particular place through video from their home. Only a few sections of society may consume this, but for businesses, it provides them with the option to explore a new opportunity which can later be leveraged to differently-abled, elderly citizens, and medically unfit individuals.
The point here is, businesses need to understand from when consumers will start demanding their services, but till then provide such innovative solutions to them for staying in the market. The digitalized and automated services are in trend, but businesses need to work on effectiveness for better consumer experience and efficiency to ensure profitability and survival. Along with this, businesses requiring consumers to visit their premises need to maintain a strict following of safety standards or introduce home delivery, home visits, or functional personal space in their premises for the consumers.
- Employee Security And Satisfaction
The news of companies laying off their employees and pay cuts hasn’t been hidden from the general public. It is safe to say that every employee might be having some fear about it at the back of the mind. So this will affect their productivity and motivation for work. The HR department has to take a step forward in this situation by ensuring that the employees feel safe and motivated to carry on their work. Another aspect of this is that many small and medium enterprises in India aren’t accustomed to working from home or digitalized working methods. The employees and the head of management need to be made to learn and accept these processes.
The work-from-home option can’t be valid for every business or every business department. So as per government guidelines, employees need to be made aware of necessary safety standards. Due to the premise issue, or others, many enterprises have created two sets of staff and maintain work from home and office on alternate days. Other than this, the situation demands the employees to be more customer-friendly and understanding. In this situation, HR can motivate employees by their feedback on the situation and problems if they are facing. Also, enterprises with lesser business operations can cultivate certain employees to different departments as per their talent and skills.
- Assessing Different Business Functions
As mentioned earlier, the business has several different functions. From the start of lockdown, there has been an emphasis on the marketing department and the HR department. With the unlocking of economies, the same focus will be needed for the production department (to manage the shortage of labor and raw material) and sales department (to convert the potential consumers and leads from lockdown into sales).
During this situation, the finance/accountancy department and IT department can also contribute in significant ways. By providing cost-cutting options, low capital investment options, digitizing and automation options to cover the lack of labor, more effective and efficient quality checking options, and better communication options. Businesses also have the time to analyze and test the functioning of their different departments and motivate them to suggest innovative and corrective measures to deal with the situation. A management professional shall always remember that at a given moment, the diverse business function has different problems and shortcomings of their own. Still, strong head management will always manage these problems and functions in a way that business only grows from synchronized efforts.
Every situation brings an opportunity for the business to be better by facing the challenges it brings with itself. Business environment post-COVID-19 or in the latter half of 2020 is projected can be understood as per the above shifts. The simple solutions in the above points can be helpful. Still, if management and administration find their business activities to be getting way more complicated than the above points, they should surely check in with a management consultancy firm.
Mr. Jaydeep Solanki is a Principal – Business Development at Value Growth Audit. Following his management studies, he gained experience as a consultant in the manufacturing and service industry. Today he boasts ten years of experience in this field. Assisting businesses to grow and develop is his passion; the Value Growth Audit is the medium to provide management consultancy services to all businesses, especially small and medium enterprises. He also aims to digitalize the management consultancy services through VGA.