If you have a business, then it has been affected by the ongoing global crisis in some way or the other. Although there are sectors that have practically managed to profit from the pandemic, most small businesses are not part of those sectors, unfortunately.
Table of Contents
- Acknowledgment: Accepting the Change
- Reassurance: Providing Hope
- Resurface: Adapt, Change and Rebuild
- Evaluation: Making Difficult Decisions
This implies that a negative impact is far more likely than a positive one, but the situation as it stands is not hopeless. With the right crisis management plans, it is possible for a large majority of SMEs to weather the pandemic’s socio-financial impacts. Taking a cue from businesses that are currently managing the crisis particularly well, we will now look at aspects of their respective strategies, so that the most important steps can be identified and assimilated by other company owners, as and when required.
The subtle difference between knowledge and acknowledgment is huge in crisis management. Knowledge is when a small café owner is well aware of Covid-19 and the possible repercussions of getting infected by the new strain of coronavirus. Acknowledgment would be acceptance of the same, which is generally followed by taking all advised measures for keeping their café employees and customers safe from the disease.
In an ideal situation, knowledge is soon followed by acknowledgment, at which stage the decision-makers are already in crisis management mode, implementing the first steps of their strategy. Barriers, aka possible reasons for failure to acknowledge even in the presence of confirmed knowledge, are mostly psycho-economic in nature. There is of course human denial, which becomes a particularly difficult issue to deal with, when an entire industry, geographic location, government, or sections of people refuse to accept and adopt preventive measures in the face of a pandemic. Italy experienced something very similar when the virus broke out for the first time in Europe, and a large section of their population refused to follow safety protocols.
The same reaction was also seen in the US, which resulted in numerous deaths and an additional spread of the infection throughout the nation. Small businesses suffered the worst financial brunt on account of their refusal to accept and adapt to the new reality of things. It should be understood and accepted that Covid-19 is a serious pandemic that has already killed nearly a million people. It should also be accepted that in order to remain functional and survive the ongoing crisis, changes will need to be made in accordance with the current and future situations.
Once the situation has been properly appraised and acknowledged, it is time to provide assurance to both employees and customers. The situation has settled down to a degree, although we are still months, if not years away from seeing everything settle back down again in the commercial segment. In this time of unrest and confusion in between, businesses are expected to provide assurance to both customers and employees, to the best of their ability.
There is no point in spreading false optimism, but there is a lot to be optimistic about. For example, the aforementioned café may not be able to operate at full strength in terms of providing seats to their customers, but they can still keep their customers by offering home delivery services within the locality. Their marketing content should similarly focus on what they can do (which is delivering tasty food and coffee at home in this particular example), rather than what the business cannot do at this point of time. Spreading good news when you find it is a better idea, rather than focusing on the grim side of things or creating false hope. Not every post has to be about Covid-19, but when you do decide on addressing the pandemic, ensure that the message ends on a positive note. Vaccines are being developed and death rates have slowed down in the US; both of which are positive, reassuring ideas to work your marketing content around.
The most important aspect of proving assurance right now in 2020 is to not go out of sync with the clients/customers. At a time when nearly everyone is online most of the time, your online presence should be strong and consistent. Social media pages and groups related to the business should be kept active and customers must be kept in the loop of new developments as well. News channels do not generally have anything nice to report, so your target customers are coming online with a dormant hope of positive news, scarce as it may be. If SMEs can act as small beacons of hope and reassurance in the middle of everything that is going on, they will gain a favorable following.
We recently came across this post on the Kettering University blog page, which utilizes an excellent example from the recent past to explain how crisis, operations and change management should work. The post mentions how Samsung managed to weather the massive storm which a faulty battery design led them to. Their 2016 Note 7 flagship smartphones kept exploding or catching fire on their own, threatening to cost the tech giant billons and tarnish their reputation forever. There were lawsuits, constant defamation, mockery on social media and massive losses both in the long and the short-term. It was enough to put even a name as big as Samsung, down and under, but they did not let that happen.
Despite everything, Samsung accepted, acknowledged, and corrected the problem eventually. It did cost them those big billions initially, but they took the hit by recalling each and every one of their Note 7 smartphones dutifully. Those actions created newfound respect for the company in everyone’s mind and come 2018, not only did people get over Samsung’s blunder from 2016, but they had regained their trust in the company with even more affirmation than before. Samsung broke even on losses suffered due to the exploding phones within a surprisingly short time because of their sincerity.
All this went through the way that it did because the tech and business geniuses Samsung have under their payroll, followed every protocol for crisis management, with impeccable perfection and original strategies, specifically created for managing this unprecedented disaster. As we are all facing an unprecedented disaster right now as well, do check out the post because it also explains how the University itself incorporates the same principles in their own online operations and crisis management courses. For entrepreneurs and small business owners, it could be exactly what they need in order to adapt, change, rebuild, and resurface, stronger than before.
Global unemployment rates are at an all-time high right now, which is an obvious and unfortunate result of the Covid-19 recession. Being a small business owner with employees, one may also have to let go of workers that they really cannot afford to keep under their payrolls anymore. It’s a difficult decision and certainly not one that can or should be implemented without a thorough evaluation first. Take note of certain key pointers that might let you handle the situation a lot better than the competition.
- Evaluate and create a hierarchical list of your workforce, based on their importance to the establishment right now
- Estimate if strategic pay cuts can save a majority of the jobs that are non-essential at this time
- If pay cuts cannot save enough jobs, then there would be no business sense in implementing the strategy, as it will only leave you with a disgruntled workforce
- Estimate whether it is feasible to turn some of your non-essential permanent employees into temps for the time being
- Take the time necessary to make all necessary estimations with the help of your HODs and then go through them again to confirm
- Once the hard decisions have been made, assure the rest of your workforce that their jobs are safe for at least the foreseeable future
Lay down your decision in the humblest and gentlest way possible, and remind those that lost their jobs about the fact that this may very well be only temporary. Doors may and possibly will open once the situation begins to improve, which is the truth by all means.
Keep in mind that when you are cutting jobs, it is of the utmost importance to simultaneously reassure and rebuild confidence within your existing workforce. Morale is going to be low even within the remaining employees who did not lose their jobs, but it will grow stronger if you provide them with the reassurance they need. Be transparent about the estimation process, as is deemed fit for the situation. This will make employees still under your payroll feel less insecure about their future and also find reassurance in the fact that they were considered as essential to the business.
Things will most likely begin to change back to its former self by early - mid-2021, but until that day is here, making the company survive via intelligent and careful crisis management planning takes precedence above everything else.