Is your company still operating under these challenging conditions, that is a question worth to be asked?
I am asking this question after seeing many companies closing down or retrenching a sizeable number of their employees. I thought that the European environment would be an outlier, but I had to dismiss it, as some of the American companies were also cutting their workforce or retrenching. Some of the companies involved include Macdonald, BP, British Airways, Renault, etc., I am highlighting the ones that are also operating in South Africa and well known.
Is South Africa immune from the impacts of the Covid-19?
The answer is no, some companies in South Africa could not survive the impact of the lockdown or Covid-19, as some had to cut their workforce to size or shut down. This laying off employees or closure was because the business environment was dictating; otherwise. All business types, big or small, needed to take serious measures to combat the associated Covid-19 impacts.
Was this an expected or unexpected event?
The 2020 Covid-19 19 events were unexpected, and therefore no one could predict that this year will be facing such enormous challenges. The Covid-19 is a rare event that will not usually happen, and it is typically a 1 in 100 years event. To predict its occurrence and the outcome was going to be extremely difficult. These rare events, however, raised several questions for all types of businesses, especially about their Strategic business planning processes.
These events raised an important question, whether businesses consider rare events in their business planning processes. In my view, this is an important question of whether you are a small or an established business. This year’s challenging environment has made it at the top of the list that companies in their planning must consider not only the recognised events but also those unknown, examined. Covid-19 or lockdown is an example of such a strange or unexpected event.
The other question that this pandemic brought into the spotlight was the diversification of the entity or business revenue streams. This year has shown that for a business to be resilient, its revenue streams should be well diversified.
The companies that survived so far are those businesses whose sources of revenue were not from one source. As an example, imagine if your income was depended solely on tourism or aviation activities. This dependency on one source would have meant the death of your business, and no government would have prevented or protected that scenario.
In addition to the above, it is becoming crucial that unexpected events be brought to the fore and be considered. Furthermore, businesses should also develop plans that can help them survive. However, this need not only be done as a compliance measure but as an essential business process.
What went wrong this time around?
In my observation, I think one of the problems that had happened this time around, was not because the plans were not there, but it was so unfortunate that some of those plans were never tested and remained outdated.
The inability to plan for these rare events had led to severe business disruption and resulted in several businesses to close. This challenging environment is, therefore, demanding future-fit strategic planning processes, for both small and established businesses.