As the summer comes to an end and fall looms with more uncertainty, it can be tempting to sit back and see what comes next—but if you aren’t careful, you’ll be stuck in reactionary mode and never make forward progress. To successfully weather the storm and recover from the pandemic, you need a strategic plan. You may not know what’s coming around the bend, but you need to be proactive in planning for the future so you don’t get left behind.
There are a range of possibilities for the future which are currently unknowable. How long until the spread of the virus slows? When is there going to be a vaccine? Will there be another round of shut downs? Will there be additional support for individuals and businesses from the government? How long until consumers can resume their old routines, and what will their new routines look like? How long until business travel ramps back up? These aren’t questions any of us can answer right now.
While you don’t know the future, you can project with reasonable certainty a few possible scenarios for your company and evaluate the risk of following the status quo and taking wait-and-see type strategy vs. making an investment in something new and bold. Here is some advice from a Harvard Business Review on managing uncertainty:
"First, develop only a limited number of alternative scenarios—the complexity of juggling more than four or five tends to hinder decision making. Second, avoid developing redundant scenarios that have no unique implications for strategic decision making; make sure each scenario offers a distinct picture of the industry’s structure, conduct, and performance. Third, develop a set of scenarios that collectively account for the probable range of future outcomes and not necessarily the entire possible range."
As you are thinking about the possible scenarios that could play out and impact your strategic decision-making for 2021, here are some sample scenarios to consider:
- Supply chain disruptions - Are any of your key suppliers at risk? If they were to go out of business or be unable to fulfill your needs, do you have a Plan B? Have you identified other possible vendors so you don’t end up with a disruption in your supply chain? Or, can you form a partnership, make an acquisition or find another way to control more of your supply chain, yourself?
- Absence of key employees - Many schools across the country are not returning in-person in the fall, meaning childcare concerns could have a considerable impact on your workforce. Additionally, the longer we go without successfully containing the pandemic, the more likely it becomes that members of your team will be exposed to the virus and need to quarantine, take time to recover, or care for family members who are ill. You need to ensure you have redundancy built into your team so that no one person is the only person who can complete key tasks, and you need to ensure you have a plan to keep your team safe, healthy and productive.
- Impact on customers - Even if you are able to successfully pivot your product or service to fit the current environment—delivering goods to customers’ doors, switching entirely to remote offerings, or putting safety protocols in place—if your customer can’t afford your products or services, you will still not succeed. If your customer is at risk financially or is concerned and cutting expenses, how can you keep your business going? Can you shift to a new market of customers, can you discount or delay collecting payments for existing customers who are impacted? How can you mitigate the risk so your customers still buy from you, or make your product or service indispensable to them so they don’t consider leaving you?
If you are worried about your customers and uncertainty surrounding their future behavior and buying patterns, you are not alone. An article from EY cites a poll sharing, "77% said that changes in customer behavior were the key risk for their company when it comes to forecasting, significantly more than those who identified liquidity and capital restraints (the next most frequent answer).”
What can you do? Talk to your customers: find out what they are worried about, what their concerns are, and what they are willing to spend money on right now and what they are excited to spend money on in the future. Get an idea of what aspects of your products or service they value most and what the pain points are.
As you are identifying scenarios and contingency plans and evaluating whether to hunker down on existing strategies or double down on something new, how will you know when to pull the trigger? What are some leading indicators you should be tracking? How can you identify early warning signs that you can watch to let you know whether to put your contingency plans in place? Develop some KPIs to monitor and help you react quickly to changes in data, and come up with a regular cadence of hearing directly from customers or the people who are working with your customers in sales or service so you have the qualitative data and lessons from the field to better understand when you need to pivot.
Strategic planning in the midst of these unprecedented times is a real challenge. Having an outside perspective to facilitate your session and prompt your thinking with the right questions could be invaluable. If you need help planning for 2021 or making adjustments to your existing strategy, our expert consultants can help.
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