Whatever happens with the COVID-19 coronavirus, and we certainly hope it will be contained as quickly as possible, it’s already having a significant and unpredictable impact on global markets and economies.
Naturally, it’s giving businesses and investors plenty of reason for concern. Many corporate leaders and investors want to respond accordingly and take the best steps to help their employees and minimize any negative impact to their business.
Bill Conerly, an economist and member of the Oregon Governor’sCouncil of Economic Advisors, has some quick tips to guide this process in a recent Forbes article.
But Conerly is also fond of pointing out that businesses need to be proactive instead of reactive, and they need to plan for many different contingencies and external changes. These include major shifts and events in the economy, technology, social attitudes, government and competition.
Typically, businesses don’t plan for such contingencies because they’re busy developing and executing plans for growth. When business is booming and times are good, they don’t think about what to do when things go wrong.
But the recent outbreak of the COVID-19 coronavirus is a sober reminder that things can change quickly for any number of reasons, and we can suddenly find ourselves asking some tough and uncomfortable questions:
- What happens if a pandemic disrupts international commerce and disrupts inbound shipments from your overseas suppliers?
- What happens if a crucial tech conference gets cancelled and you lose one of your most critical marketing and networking opportunities?
- What if a number of our employees get sick and our key operations are disrupted or have to be shut down?
- What happens if our portfolio company is in the oil industry and oil prices suddenly crash?
- What if there’s a sudden labor shortage or a temporary run of inflation?
- What if an election result leads to sudden changes in national economic policies?
Asking these sorts of questions is vital to planning for major events and protecting your business or investment portfolio. It’s important to identify the most likely events that could occur and determine how to prepare for them and which actionable steps to take.
For example, if things get really bad, could you sell equitable assets or borrow a temporary line of credit? Could you make some strategic cuts to alleviate costs while maintaining sufficient productivity?
Should your business diversify its product mix, markets, or supplier base to avoid a catastrophe when one of them is disrupted?
It’s impossible to plan for every contingency or quickly execute every possible strategy. At the end of the day, you have to prioritize events and responses, and you need to develop a plan that realistically accounts for your business goals, key contingencies, how you’ll respond, and the timeline to take action.
All of this is particularly important for larger enterprises where complex structures, moving parts, and external factors often increase the difficulty of responding quickly and effectively in the event of a major change or emergency. Nowhere is having a good contingency plan more important.
Moreover, companies can’t afford to wait until the unexpected occurs to develop or test their plans. As we’re now seeing with theCOVID-19 coronavirus, the pandemic is catching many off guard, including businesses, governments, and consumers.
It’s a reminder of how important it is to plan ahead, even when business is good. Companies and investors should never lose sight of the fact that we’re never far from a sudden development that could threaten everything.
Even if you fail at that and you’re caught off-guard by a sudden development, it’s never too late to get started and develop the best contingency plans you can.
Fortunately, whether you’re being proactive or reactive, you can quickly scale up the effort and start taking the right steps by hiring consultants to help you plan. There are many experts in business planning, corporate contingency planning, and management consulting who can help you identify the most likely risks to your business. And they can provide guidance and hands-on assistance to develop the right contingency plans to help you respond and protect your interests.
To explore the possibilities, log into our Graphite platform to post a consulting job and start your search for a pre-vetted and top-caliber expert in business planning, corporate strategy, and management consulting.