The chaos created by the COVID-19 pandemic has left many wondering about the future of their businesses.

Across numerous industries, small to medium-sized firm have lost clients, let go of staff, seen a downturn in sales or have had to close completely in the past six months.  

Unfortunately, it looks like there may be more pain to come before the full recovery is realised. The Reserve Bank governor Phillip Lowe said there would be a “shadow cast by the pandemic” and business bounce back will take time.

For individual owners, there’s an opportunity amid the turbulence to look at what their key focus areas should be in light of major behavioural changes that have occurred as a result of this crisis.

Applying lessons from the lockdown

Insights published by the MIT Sloan School of Management point out businesses are slowly moving from the immediate “reactive” phase to a more proactive phase in the recovery journey.

Questions are being raised about what is and isn’t needed in the business of the future, and how individual firms fit into that picture. For example, is a centralised headquarters still necessary and are current costs aligned to future needs?

With many people forced to stay home, there’s been a renewed focus on how we operate remotely and what tools are needed to best support that model into the future.

“Going online is the closest equivalent to low-hanging fruit in the current environment,” Michael Wade and Heidi Bjerken say in MIT Sloan.

Andy Baldwin, the global managing director of EY, told the World Economic Forum he’s seen companies that have adopted a digital adapting to crisis conditions better than others.

“Their busines models and working processes meant that they were able to pivot more rapidly or accelerate changes already underway,” he says. “The businesses that lack a robust digital backbone or an online presence have struggled.”

However, that’s not to say it’s too late for those who haven’t had a strong online presence. The priority for businesses now, he says, should be applying lessons from the crisis to firms.

That may mean re-examining at the sustainability of the face-to-face or bricks and mortar model, working out which clients fit with future business plans and where the gaps or surpluses lie.

Baldwin says recent cultural shifts in behaviour will change how clients seek interaction, which should be taken into account when looking at business strategy. It doesn’t necessarily mean a complete shift to an overnight online model though.

“This might mean developing omni-channel business models that combine digital and face-to-face offerings,” he says.

Immediate actions

According to Carsten Lund Pederson and Thomas Ritter in the Harvard Business Review, businesses need to adopt a new version of business strategist Henry Mintzberg’s 5 Ps. Their COVID version is: position, plan, perspective, projects and preparedness. 

Position relates to where the business sits in the marketplace, while perspective relates to how a company plans to change as a result of the pandemic.

“The challenge is to prioritise and coordinate initiatives that will future-proof the organisation,” they write in the HBR.

“Companies must act today if they are to bounce back in the future,” they say.

The key message is that the operating model of pre-COVID times is likely to be a poor fit with new patterns that has emerged as a result of the pandemic.

Businesses that will come through the next phase in better condition will be the ones who recognise where they can add value and where they may need to rationalise.