The events of the past five months upended the business world. At BDO as we worked closely with businesses during this time, providing business advice, financial reporting, and more, we witnessed first-hand the work put in by our own clients and other business-owners to manage an unprecedented crisis and put themselves in a stronger position for the future. Whilst the pandemic continues to pose an ongoing series of challenges for businesses across the board, the lessons learned during lockdown are what will stand them in good stead to continue recovering and ultimately many New Zealand businesses will become stronger as a result.
We have reflected on some of the key strategies we have seen employed by our clients that have allowed them to achieve success during this time. These businesses have displayed effective, awe-inspiring leadership qualities, helping their organisation move forward despite the difficult circumstances and will help them to do so going forward in a post COVID world and beyond.
Taking initiative: Getting stuck in
We can all agree that rolling up your sleeves and getting stuck in the trenches is a sign of decisive leadership. At the height of the pandemic, strong, effective leaders reacted quickly, had good common sense, and took initiative—picking up the phone to set up meetings with their business adviser, or moving office equipment so their staff could immediately work from home. In many cases, adapting to the crisis meant hierarchy rulebooks for decision-making were essentially thrown out the window, in favour of making the move now, creating a totally new landscape for many businesses post-lockdown. True leaders know that this sort of decisive action is necessary to carry a business forward into the future.
Many of our clients demonstrated great initiative, but one leader of a large retail franchise was particularly memorable. They went above and beyond, wasting no time getting to work. They stayed up-to-date with their creditors, reviewed lease agreements and negotiated leases with landlords, spoke with bankers to get adequate overdrafts in place (even if they didn’t need it), and ensured they had a good relationship with the bank, so they knew who to talk to, and what was required. Keeping up this momentum moving forward will be key to staying ahead of the curve in the years to come.
More often than not, franchisor to franchisee relationships are completely separate, with each franchise independently managing their own affairs. Despite this, the leader in question kept up constant communication with franchisees, providing guidance and support to each franchise owner by helping manage wage subsidy applications, and so on. It can be a significant source of relief for franchisees to have absolute trust in their leader. Ultimately, this strong leadership kept the franchise safe, and facilitated the creation of stronger relationships between franchisor and franchisees, which will serve their businesses well into the post-COVID future.
Flexibility: Resetting strategies
Faced with the unfamiliar, most businesses have had to pivot. Strong leaders know that changes have to be made to face the unknown, and looked to re-strategise almost immediately, which involves reforecasting finances and making sure new strategies are viable. Long-term growth plans took a back burner in favour of short-term survival strategies. Many adopted the stop-and-start mentality, asking, “what do we have to stop doing, and what do we need to start doing?”
Industry leaders took it a step further by reaching out and obtaining business advice. This allows businesses to explore different perspectives, and learn from other leaders’ experiences with the situation. While it’s always difficult to change course abruptly, taking the step to obtain external advice gave these leaders the confidence to tackle decision-making in a more efficient manner. Changing course early lays the groundwork for future trajectories too—no one wants to become so focused on the immediate challenges that they get tunnel vision, and fail to consider how the business will progress once the initial shock of a crisis has worn away.
Most of our clients didn’t need prompting and reached out to us for advice on how to reset their strategy. They had good ideas, got a heap of work done themselves, and put the extra hours in to make sure their people were comfortable, leading us to the next major point.
Empathy: Taking care of staff and the community
Having empathy is key in any relationship, and it’s no different in business relations. Internal communications are vital at the best and worst of times, so making sure staff are consulted and keeping open channels of communication are key considerations for many organisations. Regular surveys are a great tool for this, allowing management teams to keep accurate models of the situation, and ask questions like “are we on the right track?”, and “is everyone comfortable?”
Some organisations even extended their efforts and reached out to their communities to provide support. A food and beverage client made a very kind donation of 22 tonnes of rice to a food bank. This focus on giving back to the community was well-received and highlights the importance of helping others and leading by example. After all, supporting the community plays an important role in securing an ideal future for any business; without the community supporting it, a business doesn’t amount to much.
At the not-for-profit level, CEOs and GMs not only stepped up to re-prioritise and re-strategise at the management table, but also stayed passionate in their purpose, and united their workforce. Passion needs to flow through to employees, who also need to maintain purpose. It’s commonly overlooked, but keeping up team morale is just as important as ensuring that a business survives financially. When staff wake up in the morning, what makes them excited to get to work? The answer is a deep understanding of the business’ overall philosophy. Ultimately, organisations with a clear purpose are more successful than those without, throughout a crisis, and beyond.
Staying calm: Making short-term vs long term decisions
We saw many competitors cut wages straight away and fiddle with work hours during the initial lockdown announcements. However, those who set proper groundwork and maintained good communication with staff members found there was no need for knee-jerk reactions. Good leaders know that a little bit of pain can be paid back in spades over the years, and from an employee’s perspective, there isn't much of a relationship if you can’t rely on your company during times of serious crisis.
In some cases, there were already existing issues that prompted these reactions, and certainly some companies were left with no choice but to make those big changes. But those that could continue on working from home did, and some even absorbed a little bit of pain themselves to keep their staff safe, sending a clear signal that these relationships would continue to be a priority for the business.
High Energy: Staying resilient
“When the going gets tough, the tough get going.” This could not be a more apt saying to encapsulate the need for sustained energy and determination. Nothing happens overnight, and yet massive structural changes have had to happen in a short amount of time. Furthermore, huge amounts of energy have been put into understanding new initiatives in subsidies and tax, moving equipment back and forth at the start and end of lockdown, ensuring staff are comfortable, and so on. Keeping up this level of energy for a sustained period of time isn’t easy, but it’s exactly what many industry leaders have committed to doing in order to keep things on track.
It is nothing short of amazing how much of a magnet these people are; like captains on a field, with their teams prepared to listen. The resilience, grit, and determination of these leaders not only helped their respective organisations thrive, but will keep their peers empowered and inspired as we continue to work through the effects of a global pandemic.
Vulnerability: Being open to learning
Good leaders don’t just reflect on what’s happened so they can keep their business afloat; they’re also busy learning how to be in this new environment, and showing vulnerability in the process.
For example, mature leaders have become open to using new technology, developing extra skills, and making themselves more accessible to staff than they’ve ever been before. Staff and leaders both love it, and this renewed sense of openness to new processes and ways of doing things will keep organisations nimble in the long term.
Leading your business in a post-COVID world
Ultimately, business as a whole has changed dramatically for everyone. Strong leadership skills have become more important than ever. It’s no longer enough to know how to run your business; those in leadership positions must now adapt, grow, and sharpen their focus to thrive in this post-pandemic world.
As it stands, COVID-19 is not going to disappear anytime soon, and your business plan must evolve in order to overcome further challenges. If your business needs to re-strategise, contact your BDO business adviser or accountant as soon as possible and be better prepared to seize the future.