Last Friday the National Cabinet gave its first indications of what “Reopening Australia” may broadly look like over the coming months. We will hear a lot more detailed announcements soon about those policy changes.
Until now, much of our business debate has been about how and when social distancing and travel rules will relax over time so that we can “get back to work”. And what exactly will "Reopening Australia" look like, for your business ? And what might you do differently, not because you have to, but because you choose to ?
Many of us are adopting new habits in our personal life, whether that be taking up baking, adopting new exercise routines or using videoconferencing to talk with friends and family. At the Advisory Collective, we believe that this is also a great time to consciously choose new business habits that will be more appropriate for the “Reopening Australia” era - habits that will make your business more healthy and protect your profits and the value of your business.
Habits Are Important
On the day of the “Reopening Australia” announcement I had a call with a friend who is both an organisational psychologist and an expert in business leadership. Catherine Moynihan and I talked at length about how, for many of us in business, recent restrictions have probably been long enough for most of us to discard some old habits, while new habits may be emerging in an unplanned way that may not last and may challenge many business leaders.
Remember, habits are often efficient and can also be quite effective - they speed up regular routines, use less of our conscious minds and allow us to focus more on novel challenges. But they can also be inefficient, because they can stop us from innovating or putting effort into what is really most important. And they can be very ineffective, eg they may lock us into ways of doing things that soak up valuable resources for not much positive return (as any former smoker can tell you). The "Reopening Australia" period is not a good time for your business to have bad or obsolete habits.
The Effect of Changing Habits on the "Reopening Australia" Business World
Late on Friday, economist Peter Martin appeared on ABC TV’s “The Drum” and shared some valuable insights about the likely behavioural economic impacts of recent restrictions on “Reopening Australia”. He noted that many consumers have already probably lost many of their more expensive spending habits, eg buying new cars and clothes, or taking cruises or flying for work. He also noted that savings as a proportion of income will probably significantly increase again, as they did following the GFC.
Consumer spending is the largest driver of the Australian economy, so these behavioural changes will have a very significant impact on “Reopening Australia” and how quickly our economy can recover from the current recession. This will obviously have serious implications for many Australian businesses that depend on those customers, who may find the “new normal” to be very different from the old one, and in unexpected ways.
Your “Reopening Australia” Business Checklist
Clearly Australian businesses will need to plan now about how they will respond to the likely challenges of the “Reopening Australia” transition period, and choose new habits to put that plan to work. So once again we looked at our Six Pillar Strategic Framework and came up with a short checklist of the most relevant and timely questions that you can ask yourself, to design your “Reopening Australia” business plan:
- Has your own business Purpose changed ?
- How might your business Values need to change ?
- Is your Strategic Plan still fit for purpose, and how do you make sure that you are implementing it well ?
- What can you do to make your business more sustainable ?
- Are your Brand and Marketing Strategies still relevant ?
- How have your key customers and competitors changed their own habits, and what can you do to respond to that ?
- Are your sales incentive schemes still required, or how should they change ?
- How might your Terms of Business need to change, eg your Force Majeure clause ?
- Should you invest in product innovation, to remain relevant to your past customers or acquire new ones ?
- Have you delayed key hires that are now absolutely overdue ?
- What have you learned from the discretionary performance and behavioural contributions of your people, when the business was stressed ?
- How long might you be able to access JobKeeper support ?
- Will you need to reengage “stood down” or laid off employees ?
- How will you manage requests for continuing “work from home” or staggered working hours arrangements ?
- Are your employment contracts right for the new times ?
- How will you budget for FY2021 ?
- Your current budget probably became irrelevant on 13 March 2020 - what agile forecasting habits have you adopted since then, or now need to put in place ?
- Has the economics of your business model changed, eg through reductions to your overheads or the loss of gross margin through falling prices ?
- How will you manage your working capital through these risky times, when you may have burned cash, your customers may have reduced capacity to pay on time and your suppliers may reel in their credit terms ?
- How will your premises needs change if you still have people working from home, or staggering their hours ?
- How might you cope with enforced changes to your production or customer delivery capacity, eg through ongoing social distancing measures ?
- How might your supply chains have changed - and might you be able to capitalise on disruptions in their own business models ?
- Have you critiqued the habits ingrained in your recurring business processes, to see what can be optimised further ?
- Do you have the right business technology systems ?
- Are you managing your digital risks, at a time when more of us are working “virtually” ?
- Did cracks emerge in relationships with your business partners during this stressful time that you need to resolve ?
- Have you reviewed your business loans to see what you should refinance or at least reschedule ?
- Are your trusted business advisers giving you the support you really need now ?
- Have you invested in good risk management practices, or even an updated “SWOT” ?
- Are your insurance and WHS policies still right for your business, especially when governments give you choices again about what you can and can’t do ?
Remember, our clients say that our Business Health Check is a terrific process for determining what you are doing well, and what you might need to improve, as far as these issues (and more) are concerned.
Will You Be Ready to Come Out of Hibernation for "Reopening Australia" ?
Australia appears to have responded better than most countries to the public health challenges of coronavirus, so far - but many Australian businesses have not done as well preserving their “business health” to date, and still face significant risks.
The “Reopening Australia” era will be challenging, but ultimately many of us in business can still choose what we do differently as we emerge from our “business winter” hibernation and set ourselves up for even more success when spring returns, as it always does in time.