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How to approach a business turnaround strategy

No one could have prepared for the current turmoil the novel COVID-19 coronavirus has presented. Instead, as we rushed to finalise our new-year strategies towards the end of 2019, a hope that 2020 would be the year of ‘20-plenty’ prevailed. Yet, here we are, many working remotely while others scramble to align their business operations for a world gripped by uncertainty.

Already, businesses are closing, industries have been turned upside down completely, and hordes of people have been left jobless and without an income. Once the panic subsides and infection rates decrease, it will be time to rebuild our world.

But even before that, it’s imperative to have a turnaround strategy in place to try to foster business continuity and keep on going in extraordinary circumstances. Many South African businesses are doing just that and it’s inspiring to witness. Here are some of the basics of building a turnaround strategy in very tough times.

4 tips to approach your business turnaround strategy

  1. Put a plan in place

While many of us are still coming to terms with a new reality of self-isolation, work-from-home (WFH) scenarios and social distancing, the South African government has not stood idly by. In fact, in 2016, the government passed the National Influenza Policy and Strategic Plan 2017-2021, which also outlines a potential emergency response plan for a situation such as this one. This shows proactive fore-planning.

As a business leader, try to use scenario planning to predict all possible futures that could impact your organisational operations and have contingency plans for each of the more likely ones. Define your strategic objectives – such as protecting your stakeholders (employees, customers, etc.), inform your key audiences what your plan is and outline specific actions that need to be taken, says Inc. Ensure all stakeholders know the plan and have input into it. 

2. Create a solutions team

When a crisis hits, your employees will look to you as their leader. However, it’s important to remember to delegate. At the start of the COVID-19 outbreak, the Presidency tasked an Inter-Ministerial Committee to steer the country’s efforts against the virus. Last month, President Ramaphosa intensified these efforts by establishing a National Command Council.

The takeaway? Your business needs a small team of your most effective leaders across all levels to manage the situation. Cascade Strategy advises that the team should have clear authority and its role and purpose should be communicated to everyone in the organisation.

Small businesses need to pull together, with everyone involved in proactively coming up with creative business solutions. There should be frequent brainstorming sessions on ways to keep working within the confines of the COVID-19 crisis.

3. Curb your costs

According to the United Nations (UN) International Labour Organization (ILO), the Sars-Cov-2 virus, which causes the COVID-19 disease, could hypothetically cause around 25 million job losses. With South Africa’s economy already struggling and many people living close to the poverty line, the situation could be dire. TransCapital Associates suggests that businesses reduce their overheads and cut anything that is not essential to the operation and, ultimate survival, of the organisation.

Communication is key; having the hard conversations is an imperative. For example, offering your employees reduced salaries but secure jobs and explaining the reasons for this may be more appreciated than a severance cheque. You should also ensure you have cash flow for both the short- and medium-term to alleviate some of the pressure experienced during a crisis.

4. Share your plans

Once your plans for dealing with the current situation are in place, it’s time to communicate these to your audiences – which include your staff, suppliers and the general public.

As soon as President Cyril Ramaphosa declared the COVID-19 outbreak a national state of disaster, health club chain Virgin Active immediately implemented policies to ensure the safety of its staff and members, including options for pausing  memberships, reducing the number of people allowed inside a facility to 100 or less, and upping its cleaning and hygiene protocols – all of which were communicated to members and the media as soon as possible.

As this demonstrates, it’s essential to make your key stakeholders aware of the issues presented by the crisis and the solutions you’ve identified to combat these. It’s also not a bad idea to over-communicate in times like these, especially when a situation could change course quite quickly, says Chron.

Conclusion:

Want to get a foundation in strategic thinking to help foster your turnaround strategy? USB-ED’s Project Management course provides middle to senior managers with the tools to assess and determine situations that can be incorporated into a strategic business plan.

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