Small
Businesses: Lock down is being lifted – What now?
In South Africa, government has decided to use a phased
approach as far as the lock down requirements are concerned. Full lock down is
stage 5, which is the strictest level. It means that only certain essential
services are allowed to operate, with strict requirements for all others to
stay indoors in their places of residence. Level 4, which is starting on 1 May
2020, means that there will be certain organizations that will be allowed to
start operating again, under strict conditions. Level 3 will be even more
relaxed, etc.
It means that sooner or later we will be able to start
operating as small businesses. Many of us have been closed for the duration of
lock down up to the point where we can start to operate again. Sounds like
really good news, but how easy will it be to pick up from where we left off?
The reality is that a lot of small businesses were not
operational during this time. It means that there was nobody at work, no
customers to be served, and, ultimately, no cash flow. Great news to start
working again! But … We will be operating in a completely changed world.
Some of our customers may have gone out of business due
to the fact that they had no income. Rent had to be paid, employees needed to
be paid, and some organizations would not have been able to survive under those
conditions. Our customers may not be able to do business with us. Think about a
training facility. There will still be serious restrictions on the movement of
people, the number of persons allowed to gather together, etc. Even our
overseas customers, if we were lucky enough to have has them, may have been
affected just as much by the lock down in their own respective countries.
As
lock down is being eased, there are up to point still severe restrictions on the
movement of people. This means that the customers of our customers may not be
able to do business with them, etc. In other words, things may be very
different.
From a business management point of view it means that
the context of our organizations has changed dramatically.
Context forms the
basis of our business planning, including from a strategic point of view. ISO
9001 in clause 4.1 – Understanding the context of the organization – states
that context can have an effect on the strategic planning of the organization.
I think that at the moment that is more true than ever. The business world has
been turned upside down. The economies of the world have in many cases taken a
severe battering, which means that money is less readily available.
Re-assess
context
Now is the time for organizations to re-assess its
context, so that business plans can be adapted to enable us to deal with the
changed circumstances. Context is important. It involves the organization’s
operating environment, which exists both inside and outside the organization.
It needs to be assessed before strategic planning can viably be started. And,
as a result of the COVID-19 virus, the context has changed significantly on a
global scale, not only in individual countries. Every country around the globe
has been affected.
We need to define the external and internal factors that
an organization needs to consider when assessing its risks and opportunities,
so that they can be managed.
Context determines the influence and priority of
stakeholder roles. It also helps to determine how readily sustainability
programs can be adopted and even whether they can help the organization to
where it needs to be to address its social license to operate (the organization
operates because society allows it to do so).
External
context
We need to look at external context from a macro
environmental as well as a micro environmental point of view. The macro
environment includes:
·
Political factors
·
Economic factors
·
Social factors
·
Technology factors
·
Legislative factors (legal factors)
·
Environmental factors
·
Competitors in or entering the industry
sector
·
Buyer power
·
Supplier power
·
Etc
Political factors would now include the ability of
government to impose strict lockdown restrictions, even completely stopping us
for operating. Worldwide there is political tension with conspiracy theories
about China having deliberately started the pandemic, America acting
irrationally in terms of the Corona Virus and its political relations with
China, etc. These factors may have an influence over trade opportunities in
different countries (whether they are true or not, and this article does not
want to promote any of these points of view).
Economic influences include the sharp decline in
economies on a global scale (more so in some countries than others, which may
mean a shift in focus from a marketing point of view).
Some suppliers may have gone out of business, which
means that the surviving suppliers have more power in terms of pricing, etc.
Customers may have realized that they can do without
some of our product offerings, i.e. allowing more people to work from home,
limiting their need for office space, equipment and supplies.
The list goes on.
The micro environment includes:
·
Customers
·
Employees/Volunteers/Members
·
Suppliers
·
Investors
·
Media
·
Direct competitors
·
Etc
Investors in our organizations may have taken a serious
financial knock, meaning that they may be much more careful where and when they
will invest their money.
Our employees have new requirements in terms of us as
organizations ensuring their health and safety, also from a pandemic point of
view. Tour operators may be feeling the pressure in terms of fewer tourists
visiting certain areas, and possibly in smaller groups, etc. Tourists may also
have less money to spend.
The list goes on. Use formal methodologies such as
PESTLE analysis and Porter’s 5 Forces analysis to assess the external context.
Internal
context
The internal context of the organization includes all
internal issues:
·
Product and service offerings
·
Governance, organizational structure, roles
and accountabilities
·
Regulatory requirements
·
Policies, goals and strategies
·
Assets of the organization
·
Capabilities (including knowledge and
resources, such as capital, time, people, processes, systems, technology, etc)
·
Information systems
·
Value system of the organization
·
Culture of the organization
·
Standards, guidelines and models
·
Etc
Key personnel may no longer be available. Cash
availability may be severely restricted. Our regular suppliers may no longer be
available. Employees are worries about their well-being. The list goes on.
Be sure to include the needs and expectations of
external and internal stakeholders (parties) in the analysis as well (as is
required in Clause 4.2 of ISO 9001 – Understanding the needs and expectations
of interested parties. These parties are again internal and external to the
organization.
It is essential that we take a good look at all these
issues to help us to assess how we should be reacting when we are going back
into business.
We use the outcomes of the context assessment to do a
SWOT analysis of our strengths and weaknesses, as well as external
opportunities and threats. We use this information to start setting goals and
objectives for the organization. We can start with vision casting and a mission
statement and then go on to goal setting and the setting of objectives. Our
strategic planning, and, subsequently, our tactical planning will be focused on
the achievement of our goals and objectives.
Conclusion
In some organizations the effects of the pandemic and
the lock down will be more profound than in others. But I believe that it is
essential that all organizations take the time to take stock and re-assess its
position. I believe that all organizations have been affected to a larger or
smaller degree, and my feeling is that in most cases, the effect will be
profound.
As business owners we owe it to ourselves to take stock
and see where we stand in terms of the changed world out there, in which we
need to continue to do business.
Koos
Gouws
SHEQ Management Systems
koosgouws@gmail.com
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