As the effects of COVID-19 become clearer, SMEs are faced with serious and unprecedented challenges.
One way of addressing the ramifications for SMEs is to consider their effect on each component of the business:
- How does an enterprise maintain engagement with customers?
- What are the most efficient ways of sourcing suppliers and navigating through supply-chain disruptions?
- How can businesses adopt new systems and adapt their ways of working?
- How do SMEs maintain business continuity whilst safeguarding employees?
Combined with the new raft of legal requirements, and the task of understanding new advice and support schemes from government; the short term demands on SME leaders are tremendous.
Most of the impact of the crisis has been discussed at the macro-level; however, businesses vary tremendously by size, sector, market, suppliers and more. The inability of individual SMEs to affect the market environment must be incredibly frustrating and the anxiety to ‘do something’ whilst their business suffers is rife. Although an abundance of guidance is available to help mitigate the effects of the immediate crisis, it is also important for enterprises to think beyond the ‘now’ by simultaneously planning for life after the lockdown and think-through their strategy.
Practically, this involves reviewing their products and services, operations, and external relations. The current climate of uncertainty may be a ‘forced opportunity’ to re-think the business proposition of the whole enterprise. Bouncing back with a resilient enterprise will ensure longer-term survival and development of the business.
Understanding and adopting ‘organisational ambidexterity’
Although there is no blueprint for change at the enterprise-level, it is essential that business activities are reviewed to ensure continuity where possible and change where necessary. Sometimes called ‘organisational ambidexterity’, this requires considering changes that ultimately strengthen the long-term resilience of the business. For example, which areas in the business are worth developing and which require trimming? This agility is crucial to putting the business in a strong position to survive in the ‘new normal’.
It is clear that the crisis has accelerated burgeoning consumer and market trends – with online activity, cashless payments, and interactive websites already being backbones of modern life. Having an online presence has been imperative for the survival of many firms in the current crisis; with many weathering the crisis predominately because of their website functionality. However, the acceleration in e-commerce may be a shift as consumer behaviour permanently changes.
Even firms with a local market footprint – ‘take-away’ food outlets, and grocers for example, are realising the benefits of a web-presence. Other ‘contact intensive’ sectors, such as gyms, have benefited from delivering their services virtually. This allows not just continuing sales, but also develops a web-based relationship, where messages are easily shared. This review may involve changing the goods and services on offer, how they are produced and delivered, and providing reassurances that the company complies with any new legislative requirements. Reviewing the customer interface is essential for the long-term survival of the business and should be seen as a cornerstone of the ‘new normal’.
This presents an opportunity to review the internal workings of the enterprise, including equipment and operations. Implementing and enhancing digital systems and process have become ‘within reach’ of SMEs. This could be something as simple as developing an online customer base.
The changing world of work
As with any organisation, people are an SME’s most important resource and their safeguarding is a core part of being a responsible business. Therefore, the crisis has required many SMEs to change their ways of working. But, what will the future look like? These enforced measures may have, inadvertently, generated beneficial effects. Teleworking – especially working from home – has some drawbacks that should not be ignored, including isolation and testing employee’s motivation. Yet, for some enterprises, working from home has increased efficiency, deepened trust in the workforce, and developed new ways of communicating with co-workers, customers, and suppliers. Many employees are also realising the benefits of avoiding a daily commute. This may be an opportunity to consider investing and upgrading the digital skills of staff, especially if new systems and ways of working are to be permanent.
Supply chain disruption has been proved disastrous for some businesses, whilst not an issue for others. Finding suppliers requires constant scrutiny – their price, quality, volume, and reliability of shipping – as fractures in supply chains can have major consequences for the business.
Of course, choosing a supplier involves all sorts of considerations, including a sense of loyalty, but in times of rapid change it is worthwhile scanning the marketplace for alternatives. The crisis has demonstrated how supply chains may have to be re-routed to draw upon more of a local, rather than global, footprint on the grounds of certainty.
The importance of an active network
Finally, it is important to consider the external network relations of the business, which provide critical, intangible resources for SMEs in making important strategic decisions. Most SMEs are embedded in their own trusted networks because of finite resources; and so, their accountant, solicitor, sector-based organisations, and local and national support bodies are proving ever more important.
However, the crisis has generated a new imperative: facing a shifting business and legal environment, and consumer behaviour. There is an abundance of general advice, but it is crucial to tune into what is relevant to the enterprise, assimilate and share relevant information with other key colleagues and then act accordingly. Given the crisis it is vital to have an active network that can provide information that is timely, relevant and allows longer term, strategic thinking.
It is indisputable that public health is the top priority at the moment. However, anticipating, preparing, and adapting for the new business environment is essential for the long term-survival of SMEs: and this strategic approach, examining each function in the business, would have its greatest impact if done so now.
