Now that the pandemic seems to be nearing an end, companies are faced with a future that can’t be entirely like their past. That will require them to take inventory, internally and externally, to determine what they learned from the pandemic, what can they live with and what can’t they live without, where they were strong and where they were fragile. And with these answers, they can put themselves on a path that renews their strength or capitalizes on their newfound advantages.
“Companies need to think about how to get better going forward in part by remembering how they got to where they are today,” says Dave Mills, VP of Strategic Accounts at Clark Schaefer Hackett.
Smart Business spoke with Mills about some of the lasting effects of the pandemic and how companies might capitalize on those changes.
How might operations differ because of the pandemic?
Companies of all types and sizes have witnessed how essential their employees really are. They’ve had to place a great deal of trust in them in the shift to remote work and that has certainly paid off in the sense that employees have taken very good care of their companies.
Going forward, companies are likely to make a renewed investment in their development and retention efforts. And that’s increasingly important because right now, it’s hard to find and hire good people, and hard to hang onto them. There could be a doubling down on the importance of culture and how companies identify what makes their culture a market differentiator.
Connective technologies such as Teams and Zoom have shown that there are roles and positions that work well when remote. While more flexibility for certain employees to continue to work from home is expected, some teams will be more effective and more valuable working together in an office, so there should be an effort to create a structure for different roles and positions based on when remote work is most effective — and when it is not. Digging into the details of that means more than just doing a survey. It means getting the contextual information needed to make that determination. Building a talent magnet organization will be just as important for operations as productivity is going forward.
How could supply chain management change?
In the past 10 to 15 years, a common focus has been on limiting the number of suppliers to leverage scale and driving better pricing. Now that some of the risks of relying only on one or two suppliers have materialized, companies are likely to seek out more redundancy in their supply chains. That could also mean varying the country of origin to avoid certain geographical delays and risks. Even before the pandemic, companies were seeking out more domestic suppliers, and now that will accelerate. However, the price tag for such a move is going to be a challenge, depending on the industry and customer sensitivity to price increases.
Further, companies will be more open to keeping extra inventory on hand, seeing it as an investment rather than just an expense. And they will ask some of their suppliers to make sure they have more inventory on hand or pledge to keep more.
Companies will also look to determine who their best suppliers were and seek more partnerships. That’s always been important, but that position has been in competition with finding the lowest-cost provider. Now, there will be more interest in being collaborative and creating supplier partnerships built on trust and relationships.
How should companies evaluate their positions?
Risk assessment in this environment can be difficult, but companies should be adaptable, flexible and open-minded. Stay current with what’s happening and what has changed in your industry’s marketplace, and be clear on your organization’s tolerance for risk or willingness to invest.
Also, companies should look at their customers to learn what has permanently changed for them — what’s not going to come back and what new needs have arisen as a result of the pandemic — and adjust.
Many companies will be stronger coming out of this — it is a unique moment. In those cases, look to see where the competitive landscape has changed and seize the opportunity not just to get back to normal, but to get better and grow.
Insights Accounting is brought to you by Clark Schaefer Hackett