Written by: Connor Dales, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
It’s interesting how we as humans have the unique ability to adapt and lean into our resiliency when we are pushed to our limits, (and in some cases even BEYOND what we believed was initially possible.
Just as companies are emerging from an extended crisis mode-way of being, from their immediate response to the pandemic to managing through the thick of the crisis and preparing for the eventual resurgence of on-site/in-person operations and gradual return to the offices-business leaders have been put through a constant state of discomfort forcing them to be innovative and think creatively as they stabilize their companies and organizations.
We as business leaders and entrepreneurs are now often looking ahead a lot more than ever before to plan and implement the latest changes, systems, and give people in our organizations the tools and frameworks to be ready to work wisely and thrive in a post-pandemic world.
As we address the strategic and tactical challenges in front of them will set the path that will ultimately lead to the success of our companies for years to come.
For us to better understand the direction we’re trying to head in we must first understand some of the now common central themes business leaders like us are navigating.
Accelerated Change: One common theme observed from leaders and entrepreneurs I’ve spoken with is the pace of the unprecedented rapid change inside their companies during the period of the pandemic at its height to right now: I’ve listened to statements such as “we’ve accomplished more massive, fundamental growth in the last four months than the last four years.”
Those external environments which businesses have been operating have experienced similar rapid-paced change. Trends that existed prior to the Covid-19 pandemic have significantly accelerated and evolved, challenging businesses to keep pace and fulfill growing demand warranting a need to refocus their strategies for working within the parameters of a new reality.
Across a range of industries, that new reality prominently features transformation driven by technology, data digitalization and advances in our communications. Through the explosive growth of online commerce (E-commerce), video and electronic communications technology (Google Meet, Zoom), and innovative research in healthcare and applications through lockdown phases of the pandemic are prime examples of this.
Entrepreneurs and leaders will need to continue to be creative, innovative, and agile to act FAST in real-time. Governments and regulators will need to adopt these measures of change so they can adapt their approaches, legislative bodies will need to evolve rapidly to address new and emerging issues.
Capital raising will remain a critical concern: Access to enough capital on reasonable terms remains essential to permit businesses to preserve their viability and strengthen their balance sheets for what is likely to be a long and uncertain recovery process ahead, and to position them to achieve their longer-term strategic goals. Government stimulus programs and the current low-interest rate environment are fostering very favorable debt capital markets conditions for corporate issuers.
Debt capital markets transactions are proceeding at extremely healthy clip across a wide range of industries. However, the return of equity markets will be critical to restore balance sheet equilibrium and allow issuers a more traditional suite of financing options, including to support growth projects and acquisitions carrying a higher degree of risk. The prospects and timing for a large-scale and broad-based reopening of the equity capital markets for new issuances remain uncertain.
The limits of globalization: the pandemic experience has profoundly challenged previously held assumptions of a beneficial, continuously advancing process of globalization ‒ open international travel contributed to the spread of the virus, businesses experienced major offshore supply chain disruption and countries realized a shortage of domestically available PPE (and witnessed an international bidding war to obtain scarce supplies).
With the challenges of globalization under these circumstances becoming more apparent, governments and businesses have begun to focus on how they can facilitate more diversified supply chains and strengthen domestic capacity for key industries, including through the growth of national procurement strategies and requirements. Meanwhile, the pre-pandemic trend toward less free and open global trade and investment flows continues to rise.
Since the installation of the Trump administration in the United States in 2016, we have become accustomed to the “America First” refrain. Now in Canada too, a growing “Canada First” public sentiment is gaining momentum, with public support pivoting toward self-interest, protectionism, and a preference for domestic sourcing, investment, and deal flow activity. As a result, many cross-border M&A and investment transactions will become more politically sensitive and challenging to complete.
At the same time, the relationship between many Western countries and China has come under increasing strain. This is posing a major challenge to the China strategy of Canadian and U.S. businesses. Their focus has notably shifted to balancing the need for access to and growth in the China market with the need to mitigate the growing risks such as supply chain over-reliance, increasing restrictions on the activities of foreign firms in China and increasing trade and political friction.
The need for higher government revenues will drive ongoing tax changes: To pay for the massive levels of fiscal stimulus unleashed during the pandemic, governments will seek to raise tax revenues and identify new sources of revenues. Governments can also be expected to focus on measures to discourage companies from transferring operations to lower tax jurisdictions, to challenge offshore tax structures and to maximize the collection of tax revenues from ecommerce and other “new economy” activities within their borders. These factors are likely to result in business leaders reviewing and reformulating their offshoring and supply chain strategies in favor of diversification, redundancy and reduction of tax and political risk.
Focus on the individual and social concerns: the Covid-19 crisis has seen heightened focus on the individual and key social concerns. Unlike the 2008 financial crisis, the primary focus of government intervention—both from a public health perspective and an economic aid perspective—has been on directly on individuals rather than on businesses and the economy. There has also been intensified and sustained public focus on certain key social issues, most significantly on civil rights, anti-racism, and reconciliation with Indigenous peoples.
Business leaders will need to find ways to ensure their corporate strategies reflect these trends and avoid ending up on the wrong side of them. These factors are likely to encourage the further development of a broader stakeholder view of corporate legitimacy where corporate directors’ and officers’ attention will shift toward a model embracing broad principles of stewardship, sustainability, employee well-being and long-term value.
Confronting new risks: Businesses will need to prepare to address emerging or evolving risks in the areas of data security, litigation, and employee misconduct.
The pandemic has brought on heightened awareness of the importance of data security issues, such as developing corporate best practices around digital platforms for payments, privacy, and cybersecurity. These matters have become even higher-stakes pressure points for organizations as they navigate the accelerating shift to the digitization of business services.
With contractual relationships around the world disrupted by Covid-19 impacts, litigation is on the rise and likely will be for the foreseeable future, with consumer class actions and other litigation commencing in jurisdictions across Canada and the United States.
Employee misconduct/white-collar crime (alleged or actual) is an ever-present risk for organizations. When it comes to internal risk mitigation, organizations will want to assess their current compliance and investigations infrastructure to address vulnerabilities and be ready to respond.
Learnings for the future
Even though the Covid-19 pandemic still poses a fundamental challenge to our economy and society, several key insights have become widely known. In navigating the tumultuous economic and social disruption, most businesses have experienced a significant degree of ingenuity and resiliency.
The crisis has accelerated major changes already underway in markets and facilitated critical changes within organizations. This has also exposed major flaws in the architecture of globalization and social structures, such that those issues can begin to be more effectively addressed. These types of learnings will position businesses well to harness new opportunities going forward and respond to other inevitable challenges that they will face.
Following all the recent worldwide challenges that now affect the way we work and live, there are several developments that have helped serve the greater course for progress in recent adaptations likely here to stay. You will notice four specific outliers that will be leading many industries towards further progress.
Small businesses are an essential part of the world’s economy. In America, they employ almost half the workforce. But the pandemic has been harsh to small businesses as many lacked the resources to pivot in a crisis like this. Many small businesses had to shut down because they could not adjust their day-to-day operations to cope with the pandemic. Some small-business owners had to start a new venture or get back to their “regular jobs” to survive the economic downturn. However, many of those business leaders who could make it through the darkest days of the Covid-19 outbreak succeeded in adapting to the new normal in their everyday business functioning.
Change is the only constant phenomenon of this universe. Be it in business or life, changing the way we do things is necessary to keep up with our fast-moving world. Small and mid-sized enterprises (SMEs) that are too rigid to adopt new mechanisms for day-to-day business activities may fail in their endeavors. In today’s time, I believe small businesses must have a flexible business model that can adapt swiftly to changes.
Several small businesses have embraced the new normal and exploited the changing market conditions to find new opportunities. As the CEO of a business analytics company, I predict some of these changes are likely to last post-pandemic as small ventures have witnessed the value they add to their business. Here are four changes that are likely to stay with small businesses in the coming years:
1. Hybrid Business Models
The hybrid business model is one of the early adoptions of the pandemic. It is a business model that includes product sales through a mix of traditional and non-traditional methods. The model uses hardware, software, cloud offerings and other services to run a business successfully. Increased competition and commoditization during the pandemic have made it necessary for many small ventures to adopt hybrid business models along with linear models. These models can be game-changers as they promote collaboration, generate leads, open doors for new sources of revenue and decrease the risk of running a business.
Many successful enterprises had already implemented hybrid business models, but the pandemic forced more small businesses to acknowledge the power and relevance of this model in today’s time. These models can meet the demands of current customers efficiently, and these creative models are likely to last post-pandemic.
2. The Digital Shift
SMEs have taken their merchandise online and conducted transactions digitally. They promoted their businesses online, sold products on e-commerce websites, used AI-based applications for customer service, digitally tracked client data, accepted digital payments, and conducted several business operations digitally.
During a crisis, I think technology is the strongest pillar that can help small businesses stay rooted in their foundations. A technologically well-equipped company can adapt to modern approaches most swiftly. The pandemic allowed small businesses to grow digitally and expand their reach beyond physical limitations. As with hybrid business models, it is not that e-commerce websites or artificial intelligence-based software did not exist before — but it was the pandemic that made many business leaders realize how helpful technology can be in running a business. In my view, the shift to digitally-driven businesses is sure to last.
3. Collaborations and Partnership Programs
Working together has helped SMEs to a great extent in surviving the pandemic. Many small-business owners collaborated with other businesses that could help create stability during the crisis. Partnering with other successful companies can add immense value to your business and support your venture in many ways.
When a small business associates itself with a larger organization, this can open the small business up to more opportunities that can help it grow exponentially. It can open the door for added resources, more leads, increased brand visibility and improved brand equity. The Covid-19 pandemic helped many small enterprises understand the importance of collaboration and partnership programs. Many companies agreed on mutual terms for working in a healthy and less competitive environment. Since collaboration helped resolve financial problems, increased cost savings and gave more creative wings to SMEs, it is likely to last post-Covid-19.
4. The Emergence of New Business Opportunities
Every challenge brings new opportunities. According to U.S. Census Bureau data, entrepreneurs applied for 4.3 million new business identification numbers in 2020, which is 24% more than in 2019. The pandemic resulted in an increased unemployment rate, which forced some people to start their own ventures. It gave them the time to think about giving wings to their dreams. Many aspiring entrepreneurs have a passion and desire to start a business, but because of busy schedules and various responsibilities, many never take the risk. The pandemic left some people with no other options but to start their ventures. I think more people may embrace the path of entrepreneurship even after the pandemic is over.
The adaptations that are most likely to last post-pandemic act like a gateway for business leaders and entrepreneurs to generate leads, target a broader audience and increase their brand visibility. If your business hasn’t already adopted these changes, I recommend getting started right away. For starting with a hybrid business model, the first step is to browse through different models and proceed with the one that best fits your organization’s operations. Similarly, you can contact a digital marketing expert and a website developer to shift your business digitally. To implement the above successfully, it’s crucial for businesses to do their homework. Conduct thorough research and understand how each of these changes will affect your organization, and then proceed accordingly.
To comply with the new normal. Some of these adaptations were more beneficial for their growth and, hence, will likely last post-pandemic. In my view, these changes will make small businesses more resilient and strengthen their foundations.
Connor Dales, Executive Contributor Brainz Magazine
Connor Dales, is a serial entrepreneur, business coach-consultant and a leader in leveraging systems for small, medium, and large sized businesses in addition to serving its owners by facilitating and cultivating strong leadership growth. He's an accredited ICF Certified Coach and has a wealth of knowledge and experience in business and personal/professional development. Connor is passionately committed to ensuring business owners and their teams breakthrough their bottlenecks and challenges to maximize their profitability and elevate their levels of impact! He is the founder of Meta View Coaching Solutions, a coaching-consulting company and online education business on a mission to transform companies from ordinary to extraordinary.
