COVID-19 and the Future of American Business for 2020 and Beyond

INTRODUCTION

The year 2020 will forever be marked by an unforeseen lesson in vision. We didn’t see it coming, but we all must now recognize where the lesson is leading us. And we, the business and organizational leaders, are obligated to confidently embrace this time for improvement. We must be creative, innovative, and progressive in offering improved employee and customer experiences, more successful business strategies, far more efficient operations, and stronger local, national, and global economies.

Some businesses are healthy and thriving, while countless others will never reopen. Some workers are lamenting their return to the office, while others enthusiastically prepare for a new normal. We, the business leadership community, need to acknowledge the facts of what was, what is, and the future we need to create. Leaders are challenged to set new standards that focus on people at every level, that serves every investor, employee, and customer, and delivers excellence at every product and service interaction.

The American experience has always been fraught with the tension between bold individualism and entrepreneurship and the establishing of a national community to ensure a common good. The interplay between government, business, education, and non-profits is a hallmark of our American economy.

Today, the CEOs of America, small business leaders in every state and entrepreneurs in every community have a new responsibility. 2020 marks the year in which we, the business leadership community, must provide a new vision for the American economy and confidently carve our own path in this new adventure that none of us could have foreseen.

The starting point is innovation of service to employees and customers. How do we serve a marketplace full of new demands with increased technological engagement and exacting expectations of convenience and safety? Our lives and our businesses are being largely remade by this global pandemic which has impacted our businesses, families, employees, customers, and other stakeholders. We can cooperate, compete, and improve. To that end we have diligently gathered a wealth of wisdom and insights from our contemporaries—CEOs and leaders from around the country— who are sharing their understanding of this sea change that is the intersection of commerce, customers, convenience, and caution. Additionally, we have scoured numerous articles, essays, and briefs being drafted in response to this ever-changing time. We have prepared this paper which we hope will guide us all toward quicker success in the coming months, years, and decades.

This paper is crafted for the great leaders we need during this critical time. Leaders need insights, understanding, and strategies for the future. We are in a time of great challenge and transition. The current global pandemic is forcing companies, organizations, and leaders in all areas to move in new directions toward new goals. Some businesses will collapse. Some will thrive. There is no question that all businesses will be different.

It is our desire to provide leaders with ideas and realities in six fundamental areas that will determine future success. We outline some of the most significant challenges CEOs are facing today, including relating to the health of their workers and customers, ensuring the continuity of business operations and distribution channels, adopting new technologies and processes, and adapting business strategies to a new and evolving marketplace.

This paper also shares insights and ideas on how to successfully emerge from this crisis. We present various strategies and solutions to aid you in navigating the changes from unprecedented work stoppages, lack of consumer confidence and spending, new legal requirements and limitations, and ever-changing work from home (WFH) expectations.

The most successful businesses are those that are able to pivot quickly, adapt to new technologies, and lead their people through necessary transitions. Some organizations will not be able to adjust to these new realities brought about by this pandemic, and sadly, they will risk closing. Organizations willing to move quickly, think strategically, and find new opportunities will capitalize on a new talent pool, new resources, and fewer barriers to entry. 

The four of us hope these insights help!

Part Two of Six – PROCESSES

Ask the right questions to get the right answers. Everything should be examined. With so much change coming so quickly, the challenge is finding the right solution as quickly as possible. The caution is that we sacrifice the time needed for discovery—soliciting input from various levels of employees within the larger team, and identifying possible unintended consequences—in favor of action.

Even now, as the pace of work is even more hurried, we must be mindful of the insight of Albert Einstein, “If I had one hour to save the world, I would spend fifty-five minutes defining the problem and only five minutes finding the solution.”

Identify lists of questions and share them with your board of directors, senior management, and employees at every level. Take the time to hear their questions as well. Define the problem, collaborate on solutions, and strategically adjust processes to improve the organization.

Challenge: Value to Customers

Business plans and strategies have historically focused primarily on shareholder value, not value to customers. Driving employee health and productivity will enhance every customer experience.

Opportunity: Shift business plan priorities from shareholder value to stakeholder value. If we put our key stakeholders first, (1) employees, (2) customers, and (3) community, then the shareholder value will take care of itself. This does not diminish profit growth as a goal. Rather, it means that profit is enhanced by caring for employees, customers, and the community.

Leaders have the opportunity to hit the “reset” button and focus on the value of customers. Business plans written earlier in 2020 are no longer valid. Companies may have new products, new service offerings, new vendor and distribution partnerships, and even new target audiences. Now is the time to review plans with a customer-centric focus.

Solution: Rewrite business plans and strategies with key goals and metrics to provide maximum value to stakeholders. Determine which outcomes impact profitability and thus value, and maximize opportunities to reach those outcomes. For example, if employees are more productive and happier working from home either part-time or full-time, establish programs that enable this and track the impact on customer satisfaction, procedures, and profitability.

Challenge: Workplace Safety

For manufacturing facilities and those companies with warehouses and physical plants, there are long-standing procedures for workplace safety. Now, all companies must make workplace safety a priority as the definition of workplace safety has dramatically expanded to now include social distancing, hand washing, more frequent disinfecting of common areas such as breakrooms, bathrooms, refrigerators, copy machines and even the proper use of coffee pots and microwaves.

Pre-COVID-19, other than for those in the hospitality and restaurant industries, organizations, in general, did not need to focus on customer expectations regarding organizational cleanliness and safety. Unless an organization did an inordinately poor job, most customers never noticed. Today and in the future, however, that will dramatically change. Everything from the front-desk appearance to the cleanliness of restrooms will be scrutinized, and customers will surely base decisions on who they will and will not work with based on the organization’s attention to cleanliness and safety detail.

Opportunity: Safety has taken on a new priority which means great enthusiasm for and willingness to participate in workplace safety training. And with this knowledge of safety expectations and protocols comes reduced injuries, personal time off, and production interruptions.

Leaders should gather ideas regarding workplace safety from all employees, not just managers or those in human resources. Front line employees will often have the best ideas, and they are also more likely to follow the rules if they were the ones who helped create them.

Customers want to be assured that the environments in which they shop, dine, visit,–and even the employees they interact with– are clean and safe. Additionally, questions have been raised regarding the cleanliness of home deliveries. If your products were already meeting standards, now is the time to broadcast that. If they weren’t, now is the time to change.

Cleanliness, safety standards, and crisis mitigation plans will be scrutinized during future vendor selection processes. Organizations that exceed expectations will capture market share.

Solution: Workplaces are now going to have to be cleaner and safer. Employees riding in trucks together are going to require to keep more distance. Shared workstations need to be simpler so there are fewer areas that need to be cleaned and spaced out to ensure physical distancing. Invest in quality janitorial services to get and stay clean and build trust with your employees. Help employees understand that all safety, not just cleanliness, is part of their job.

Go the extra step to ensure a clean and safe work environment. Pay attention to the little things – is the lobby organized? Are front desks clean? Are restrooms sanitary? Advertise what you do to keep both employees and customers safe and healthy. Be visible about efforts to provide clean, safe, and healthy products and workspaces. Many company guidelines on COVID-19 response and preparedness will never be read by customers, but there is comfort in seeing a poster, email, or header indicating that one exists.

Challenge: Understanding and Exceeding Customer Service Tolerances and Expectations

The customer experience must now expand to now include post-COVID-19 requirements such as low or no-touch payments and cleaner facilities. In addition, customers who were willing to tolerate lower service standards during the height of the pandemic are now quickly returning to a desire and demand for exceptional service.

Opportunity: The customer experience is the new competitive advantage. Organizations that prioritize how to care for customers will be the ones that succeed. Customers are seeking enhanced health and safety, updated online opportunities, easier processes to follow, and faster and easier physical delivery methods.

Solution: Create improved customer experiences. New online chat, telephone, video, and in-person improvements will be game-changers for growing market share. Organizations that pivot quickly will gain new customers and increase the loyalty of current customers.

Many companies struggle to implement customer support creating long delays, frustrating processes, and delayed deliveries. This is an opportunity to emphasize superior customer support to quickly differentiate from the competition. While customers may be more tolerant in the short-term, companies that do not improve their customer service as businesses open up will experience the wrath of social media negativity. As customers lose patience with poor attitudes or slow processes, they will share their negative interactions with friends and followers.

Customers expect businesses to be online, easily found with customer service numbers prominently displayed, and real people answering the phone. Successful businesses will be available to customers as often, and in as many ways as possible.

Some CEOs are utilizing geographically diverse remote employees to increase their customer service channels (phone, email, chat, and social media) to operating 24/7. Companies selling goods are providing easy-to-use return shipping forms with every customer shipment even though it increases the number of returns. Service companies are allowing customers to schedule appointments online.

Customer service may be the easiest part of any organization to improve as it simply begins with recognizing that we are all customers before we are employees. As such we, and every person on our teams, know what good customer service is and is not. Extensive surveys and costly assessments often yield to common sense and fresh perspectives. Now is the opportunity to capture market share by providing exceptional service, as some of your competitors will surely fall short.

Challenge: Managing Accounts Receivable and Customer Needs

During the pandemic, many customers and suppliers demanded lower prices and extended terms. And many organizations complied with these demands to ensure they retained clients. In the post-COVID-19 era, customers will continue to demand those same artificially low prices and extended terms.

Opportunity: Smart leaders are making tough decisions as to what level of discounting, terms, or debt forgiveness may be required, and how that impacts customer relationships. This is a time to both gain customers and end service to those you don’t want.

Any special accommodations should be explicitly stated in contracts and effectively communicated, so customers understand that the prices and terms they are receiving today are for special circumstances. People have short memories; clearly display the discount and state the end of the special pricing and terms. Do not expect your customers to remember and be willing to return to the pre-crisis prices on their own.

Solution: Build a viable plan for pricing, discounts, and term variation. Identify and empower employees accountable for decisions. Diligently discuss every promise, variation, and final agreement with each customer to ensure mutual understanding. Manage the tension between accommodating your customer’s short-term needs and the benefits of a long-term relationship. Generate ideas for adding more value so that when business is back to more normal conditions, you can charge more because you’re providing more.

Challenge: Managing Change at an Accelerated Pace

This is a season of forced change. Several CEOs have expressed that the pace of change was difficult before the pandemic, and the need for urgency is increasing. There is new technology, new ways to serve customers, new safety and health guidelines, new supply chains, and the list goes on.

Opportunity: Organizations and leaders must proactively manage change, and use it as a strength rather than a weakness. If this pandemic teaches us nothing else, it is that everything can change quickly. Outside forces beyond our control, can have an enormous impact on our ability to succeed. The opportunity lies in learning to use the pace of change to fuel growth.

Solution: Condition teams for change by creating a vision, soliciting input through genuine brainstorming sessions, crafting a strategic plan, challenging employees to own and manage their roles, and rewarding employees for success.

Many CEOs conveyed that they are short of the needed time to adequately manage all of these issues. Although resources may be scarce, now can be the right time to outsource part of developing strategic plans to avoid costly mistakes and delays.

Challenge: Preparing for and Managing a Sudden Outbreak

What plans are in place if there is a sudden outbreak in the office? Some employees can work from home, but what do factories and plants that require on-site workforces do? What happens if 10%, 20%, or even 30% or more of an organization’s employees are unable to work?

Opportunity: Many will continue to reduce their workforces, companies that maintain their workforces and cross-train them well will benefit from the redundancy of labor in difficult circumstances such as an outbreak. An added benefit of maintaining suitable labor levels is the ability to have the right talent at the right time to capitalize on post-COVID-19 opportunities.

Solution: Document the conscious and unconscious processes, tasks, and routines at every employee level to ensure redundancy so others can temporarily fill the gap. This builds an “insurance policy” in the event of widespread absenteeism. Additionally, proper documentation and training expedite the effectiveness of new employees.

Cross-train employees on other work functions to ensure employees are able to support one another. This also enables employees to learn new skills, prepares them for advancement opportunities within the company, and reduces overall employee turnover.

Once a crisis is identified leaders must act swiftly, enacting contingency plans already in place. Advance planning is critical. Anticipate and prepare plans to maintain operations if a percentage of the workforce becomes ill. Know which non-essential activities can be suspended. Have an interim leadership plan to ensure confidence and continuity. Train those who interact with media and community leaders to respond correctly if the crisis is widespread and becomes known within the community. Leaders cannot abdicate the organization’s crisis-response plan to others.

Challenge: Preparing for Senior Leadership Promotion, Retirement, Illness or Death

Organizations are usually only concerned with a sudden illness or death one leader at a time. Now, organizations must plan for the unlikely–yet realistic–possibility that multiple members of leadership could become sick or even die within a very short period of time.

Opportunity: Organizational leadership and boards of directors must have viable succession plans in place. This identifies key individuals for future leadership roles, trains future leaders, and documents roles and responsibilities. Honest discussions with possible new senior leaders foster open dialogue, encourages new ideas and solutions, and breeds confidence in the future of the company.

Solution: Organizations need to review their current and future leadership roles and responsibilities and determine who would assume leadership in the event of a sudden leadership departure, regardless of circumstance. Now is a great time for leaders to assess their strategic plans, including their succession planning. Top-level leaders should be looking to hire leaders of the future, not filling positions for today. That means reassessing job descriptions, organizational charts, and aligning people with their strategic vision.

Leaders need to allocate ample time to document every position and the need for future skillsets. Include lists of daily routines and responsibilities, drafts of decision-making filters, documents pertaining to future planning, summaries of informal ideas, and agreements. Often, the most competent people are only consciously aware of 20-30% of what they do. The rest is done subconsciously as part of normal, everyday work. It may be necessary to have a third party observe leadership to document what goes into the leadership position so that the sudden change in leadership does not leave an organization with inconsistencies.

Leader identification and training must be planned for and implemented. The next generation of leaders should be formally trained. This can include participation in peer councils, facilitated or mastermind groups, or informal training via mentorship. For succession planning resources, visit WhoComesNext.com.

Challenge: Complying with Current and New Regulations

In recent years, many of the regulations and barriers to doing business have been lifted and most leaders are acknowledging it is easier to do business and be successful in this environment. COVID-19 will cause an increase in regulations, as well as change and updates to existing regulations and requirement.

Opportunity: Some audit and compliance firms are facing a slowdown in business as a result of recent inactivity and clients going out of business. Others have capitalized by assisting company compliance with the Paycheck Protection Program and are busier than ever. As such, be aware of how your business partners are functioning at this time. Some might be willing to negotiate lower fees. Some might be placing limits on in-person visits, or conducting more of the audit work remotely, which might make the process shorter and easier. 

For many businesses the need exists for annual audits, reviews, etc. to remain compliant with industry standards or even governmental regulations. These do not go away in a pandemic, at best a small reprieve in time is given.

Solution: Be proactive. Call your service providers and discuss the next steps. Ask them for the new whitepapers in their industries so you can plan accordingly. Talk to local representatives from OSHA, the Department of Health, or Code Enforcement Offices and ask them if there are new guidelines that you need to know.

Challenge: Complying with OSHA Regulations and Labor Laws

Hourly and salaried employees were not designed for a pandemic and the laws and rules in place often don’t fit the current COVID-19 reality, or what the reality looks like as businesses open up both short-term and long-term.

Opportunity: Given the widespread number of furloughed employees and the associated costs, examine how new employee work preferences and the possibility of increased temporary and contract labor will need to be adapted into your hiring, training, managing, developing, and terminating processes. Review legal requirements and implications for both on-site workers and also remote and WFH employees. Consider the repercussions to break rooms, rest rooms, locker rooms, entry/exit areas and transportation hubs as well as policies for WFH employees.

Solution: Identify which laws are the most likely to be violated and build a cost/benefit analysis to determine the best plan of action under a variety of scenarios. Develop clear and concise training and communication programs to ensure employee training, understanding, and compliance. Employees should know what is expected of them to reduce gray areas when it involves OSHA and Labor Laws. Document employee participation in training and their acknowledgement that they have been trained.

Challenge: Alleviating Lack of Operational Control due to Outsourcing and Global Supply Chains

Global and national commerce has numerous positives—widespread competition leads to better products, pricing, terms, and service. Decentralized suppliers allow for redundancy in the event of a regional catastrophe and has provided lower production costs. But our growing unease toward geopolitics, ever-changing international laws, known copyright infringement by foreign governments, and reliance on international shipping carriers makes full dependence upon international supply chains a risk that needs to be reviewed and managed.

Opportunity: A new understanding of the frailty of global supply chains has American businesses seeking to purchase goods from vendors a little closer to home. Sourcing locally or regionally can decrease transportation costs, inventory management expenses, inventory financing costs, and delivery times making companies more agile and creating more flexibility and control.

Consider the impact of just-in-time inventory and what it would do to your organization if your supply chain were to be cut off short-term or long-term. Would it be better to purchase inventory in larger quantities and store inventory even though that may increase overall costs? If you’re a supplier, who was used to orders on a regular basis, plan for larger and less frequent orders and the impact that might have on cash flow, and prepare your team to use the additional time for prospecting and growth.

Solution: Regional suppliers should reintroduce themselves to past clients and solidify relationships with current customers. Plan an aggressive sales strategy to contact prospective and former clients that may have chosen another vendor due to scale. Every prospective customer is worthy of fighting for, especially if they have experienced interruptions in their global supply chain. CEOs and business owners need to diversify their supply chains and work now to find regional and local suppliers.

Purchasing agents should analyze the costs of changing vendors. Unit prices and labor in America have historically been higher than overseas, but this new economy will reveal aggressive tactics from companies to secure new local customers.

Challenge: Mitigating Unstable Transportation Systems

The labor associated with receiving and shipping is creating additional work and adding costs. The increase in goods being delivered is creating delays for shipping companies. The significant increase in shipping rates is not easily absorbed into the cost of the product.

Opportunity: Many CEOs are indicating a moderate level of satisfaction with third-party delivery companies. The service may be sound, but the price is high. Consider developing your own delivery system (e.g. Dominos and Amazon).

Solution: It is possible to place a shipping surcharge on all shipments; however, this needs to be a last resort method due to customer perceptions. Customer observations reveal that people pay close attention to the price of gasoline, internet and mobile phone services, and shipping costs.

Predictability of delivery is the new norm for customers as tracking technology and various “free two-day delivery” options have become common and expected. It may be important to bypass potential choke points if delivery dates are likely at risk.

Challenge: Adapting Automation to Ensure Compliance with Health and Safety Requirements

People adapt when given the right tools and motivation. Employees need to be able to expect they have the right technology for the right task.

Opportunity: Technology has, and is, advancing more quickly than most realize. Tech companies are busy both inventing new technologies and repurposing technologies for new endeavors. These technologies may be able to be implemented to aid in the need for widespread taking of temperatures, automated self-cleaning, and contactless payments and delivery.

Solution: Ask “What if?” scenario questions. Assess whether current IT resources and processes are meeting needs. If not, explore whether a different solution is available. Be an avid reader and learner in the IT world as what you discover may lead to new ideas and solutions. Embrace IT and big data to discover ideas and solutions.