Post-COVID-19 World: Adjustments Businesses Will Have to Make

The ongoing pandemic has had a devastating effect on many businesses big and small. Many have not made it to the other side and others are hanging on by a thread. Every one of them has had to pivot and make changes in their operations and business model as a whole. However, as the vaccine has been released and a slight glimmer of hope has come about for a future post-COVID-19.

Businesses will face their toughest challenge yet: bringing their businesses back amidst an already struggling economy. Leaders will have to create and implement the next normal with resilience, resolve, reimagination, and reform. Specifics will differ depending on the company, the sector, and what parts of the world the business is located in. That being said, these characteristics hold true across sectors. In addition, there are certain strategic areas businesses need to focus on. For example, rebuilding operations, recovering revenue, rethinking their organization and accelerating the adoption of digital solutions. 

Rebuilding operations

The pandemic has dramatically changed the demand and thus the supply for different products and services across all sectors. This shift has exposed weak points in supply chains and service networks, forcing companies to pivot and adapt. Companies have created new levels of visibility, productivity, agility, and customer connectivity. Pivoting and adopting these new changes is only half of the battle, however. As time crawls on, the question then becomes, how will companies maintain their performance?

If not already implemented, companies will have to redesign their supply chains and operations to protect themselves. They will have to rebalance their supplier mix and global asset base as new technologies and changing demand has changed supply chain location. This changing of the location of supply chains is most likely going to accelerate the adoption of other practices such as increased use of external suppliers to aid in internal operations, dual/triple sourcing, and greater cross-training in the workplace. 

Reinventing operations is most likely going to be expensive because of the time and resources the reinvention requires. However, operations that are low-cost and highly flexible are possible as they are already happening. Companies were digitizing their operations even before the pandemic. If they continue to digitize everything at a fast pace, they will succeed as periodicity, flexibility, and quality will increase. 

The reinvention of operations will need to create new value and greater relationships with customers in order to gain an edge going forward. Companies will have to learn how to accelerate their product development, customer experience, customization, sustainability, and ecosystem management. 

Impact of Technology

Technology is also increasing cost transparency as procurement-spend analysis and clean-sheeting are adapted. Other practices such as end-to-end inventory rebalancing, capital-spend diagnostics, and portfolio rationalization will also increase transparency and decrease costs. Companies that haven’t already done so should look to turn more of their fixed costs into variable costs by using “as a service” models. 

The pandemic has required everyone how to learn to complete tasks and work remotely by using digital communication tools. There will be an increased decline in manual tasks and an increase in the demand for technical and analytical support. This will increase investment in workforce training. 

Recover revenue

The rate at which a company will recover its revenue will determine if it will succeed going forward. They will have to rethink their revenue profile and position themselves in a way that they have an edge over their competitors. 

Companies need to identify where their main sources of revenue are coming from and make hard decisions regarding cutting back, restructuring, or expanding. There will also need to be a continued focus on health and safety, continued support of remote selling, flexible payment options, and automating processes to free up sales representatives. 

The speed at which campaigns are launched and decisions are made will have to increase as well. Lack of efficiency is what kills revenue most of the time and can be fixed by solutions such as internal changes within the company. Remote teams will have to have more authority when it comes to decision-making and problems will have to be solved more quickly over a video call. 

What leaders need to keep an eye on

Companies have to take action more than the research and testing processes more than they analyze. There should be an air of agility and accountability among your team by implementing things such as check-ins and reviews. 

Companies will have to analyze how their employees work best. Some people in the company could be more productive working remotely going forwards. Expanding digital channels goes along with this as companies have and will need to continue to advance analytics in order to make faster and better decisions. 

Leaders will also need to reevaluate what their customer values and how this might have changed because of the pandemic. They should tailor the customer experience to fit this. Companies will have to be able to adapt and change the ecosystem by reexamining their supply chain partnerships. 

Rethink your organization

Due to the pandemic, companies had to work in new ways almost instantly. Most of this came from changes in their operating models as focused teams, goals, and rapid decision making are now the norm. Leaders of a company will have to reexamine their mission and what the company represents. If employees share a common sense of purpose and workplace culture, tasks will be completed more efficiently and the result will be better. 

Companies have learned that team work and decisions that are made out of this are more effective than decisions made by an authority figure(s). They will gain a competitive edge if they learn how to decentralize their operations and utilize the right talent when faced with challenges. Simplifying and streamlining organizational structures will also cut down on costs and new leaders will emerge. In order to attract capital such as talent, companies will have to cultivate an environment where people want to work. 

Insight generation will also need to increase as technology has and will continue to change how companies relate to their customers. These insights will help to make connections between goods and services and increase growth and adaptation. 

Increase digitalization and re-imagination

The past year has changed how we go about life. It has changed how we interact with people, how we work, how we spend our time, etc. The integration of digital technology into our lives has only increased across every sector. Technology has played a role in how we all operate during the pandemic, and it will continue to play a vital role in how we all operate post-COVID-19.

Consumer behavior and demand and how the economy works differ from place to place. Depending on the individual and the culture, various activities such as going to a restaurant will occur before they get on a plane or go to a large event. Supply chains will need to be ready in order to navigate the economic recovery successfully. Leaders will need to have a plan and agenda months into the future, yet will need to be able to adapt because of unforeseen circumstances/events. 

Companies will need to rethink their customers and how technology can help with solutions. This differs between parts of the economy. For instance, many retailers have had to create an easy-to-use e-commerce experience that lets a customer do everything online. For travel such as airlines, these companies have and will need to continue to ensure health and safety with “contactless” check-in, boarding, and experiences in-flight. 

Similarly, companies will need to include new data and models into their decision-making. The use of data and analytics will become more important than ever as companies will need to examine demand forecasting, asset management, and new volumes. They will need to improve their IT productivity and make them variable wherever they can to lower their costs. Companies will need to examine nonessential costs related to projects and establish the roles needed to sustain an IT-product platform. Companies will also need to adopt the cloud and automate technology at a faster rate. 

Conclusion

Going back to how one operated before the pandemic is not an option. The world has changed far too much to go back to operating as one did. Instead, companies will need to rethink how they operate, organize, utilize technology, return to work, and set the foundations for recovery in order to succeed going into the future. 

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Resources

https://www.cnbc.com/2020/12/03/mark-cuban-on-how-america-will-change-post-covid-19-pandemic.html

https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business

13 Money Habits You Need to Carry Forward Post COVID-19

The pandemic nearing a year, meaning economic instability for many is nearing a year. More people than ever have taken financial action. According to a survey by The Harris Poll among over 3,000 U.S. adults, close to 4 in 5 Americans (78%) reported that the pandemic caused them to take financial action. In the survey, 40% of people reported that they pay closer attention to finances, 34% of people said that they prioritized saving money more than they did before, 33% of people said they tried for the first time/increased usage of a digital bank service, and 32% of people said that they conducted more bank activities online. Additionally, 31% of people said that they started saving/saved more for emergencies, 22% of people said that they tried to understand more about their finances, 19% of people said that they downloaded a new financial app, 17% of people said that they researched different financial solutions, and 15% of people said that they educated themselves on savings rates that banks offer. With all of this being said, here are some of the top money habits you should continue to carry forward even after the end of the pandemic: 

1. Do more banking online

As seen above, 33% more people used digital banking for the first time or increased their use of digital banking and 32% of Americans said that they conducted more of their bank activities online. Online banking allows people to reduce exposure to COVID-19 and saves time and energy since one doesn’t have to go to a physical location. Even if your bank is not “online-only,” many other banks have websites and apps that allow customers to do almost all of their banking from their phone or computer. Even if you are scared about doing online banking because of security reasons, there are multiple ways to do it safely. Make sure you are a safe Wi-Fi network and use a two-factor authentication on top of checking that the online banking service is able to monitor your account for fraudulent activity. If you are new to the online banking world, make sure to look for one with low or no fees and high interest rates. You might not find something “great” as interest rates are still at a historic low, but as the economy recovers, they will most likely go back up. 

2. Get out of debt and stay out of debt

More people than you would expect have thousands of dollars in credit card debt. Before doing anything else, make sure to pay this debt off. Interest will keep accuring and you will owe more and more as the months go on. 

3. Don’t buy things just because they are on sale

Buying stuff on sale doesn’t save you money, unless it’s a real necessity. It just means that you are buying something at a slightly lower place. If you are using coupons and buying things on sale that you normally buy or you have to buy because you have to live, there is no problem with that. However, if you are buying things on sale just because they are on sale, you are spending money frivolously which is not a good money habit. 

4. Live under your means

Make sure to live on less than what you make. This seems like a pretty basic concept, but most people don’t adhere to this because they are impatient and envious. Yes, it is hard not to want and purchase nice cars, a big home, and expensive clothes, but being up to your ears in monthly payments and owing money to credit card companies is much worse. Buying a bigger house than necessary and then drowning in mortgage debt is not worth it. Additionally, if there is an emergency now or in the future, how are you going to deal with that if you have no savings? Your mental state and relationships will thank you for living under your means. 

5. Look to put your money in a better savings account

A bank account that earns you .01% interest annually is doing nothing for you, especially because the U.S. inflation rate has been around 2% for the last few years. This means that money sitting in a bank account with interest less than 2% is losing value. You need to make sure that your savings account is at least earning you the rate of inflation. 

6. Save/invest for retirement 

Put your money to work now so that you don’t have to later in life. Make sure to invest in your employer-offered retirement plan if they have it. This is one of the easiest ways to invest for retirement because money is automatically pulled out of your paycheck. Thus, you aren’t tempted to put the money somewhere else. You should definitely enroll in this plan if your company offers to match a certain amount of the money that you put into the plan. Secondly, you should invest in a Roth IRA. Even if your company doesn’t offer one, you should invest in one because your money will grow tax-free. You won’t owe money to the government when you reach retirement and need to take money out of the account. 

7. Pay more attention to your finances

Around 40% of Americans said that they pay more attention to their finances because of the pandemic. One should continue this habit into the future by tracking everything you spend for 1-3 months. You can better map out a reasonable budget this way and align your spending and money habits with your income and your goals. One way to break down how much you should be allocated for different things is the 50/30/20 budget. This means that 50% of your income goes towards needs, 30% goes towards wants, and 20% goes towards savings and debt repayment. You can alter this to suit your personal lifestyle, however. 

8. Build an emergency fund

Emergencies happen when you least expect them to. The last thing you want to worry about is how to pay for it in the moment. You should have an emergency fund that is large enough to pay for at least three months (preferably six months) of expenses. We are not living in a fantasy world, and sometimes life is tough. There are very real things like losing one’s job, medical expenses, and family emergencies. 

9. Know when to say ‘no’

You know yourself best. One of the best money habits you can adapt and carry forward is learning how to say ‘no’ to yourself. This is not an easy thing to do, however. There are some simple things to remember when having an inner argument. If what you are deciding on involves more debt, you should say no every single time. If you are trying to decide whether or not to purchase something online, put it in your cart and wait a week to buy it. You will either find something better or lose interest entirely most of the time. Lastly, if you want to buy something in the store, put the item(s) on hold for 24 hours and leave. If you take the time to think about the purchase for a full day, you are much more likely to say no. In addition, driving all the way back to the store is a lot more inconvenient than saying no. 

10. Plan out your meals

Spending money at restaurants or on take-out is one of the easiest ways to spend more money than you plan. One of the best ways to save money on a month to month basis is planning and cooking your meals instead. Cooking meals also means leftovers for lunch or dinner the next day. 

11. Set financial goals

If you don’t set financial goals, how do you track your progress and what are you working toward day in and day out? Setting goals is one of the most important things you can do for yourself. Make sure to set specific short-term and long-term goals for months, years, and much later in life. If you want to grow and be in a desirable position financially, setting financial goals is a must-do. 

12. Look for additional ways to make money

More and more people these days are taking up a side-hustle in addition to their regular job. This could mean starting your own business or getting a second job. Making a little extra money will go a very long way. See our article about the best side hustles here. 

13. Budget, budget, budget

A detailed and thorough budget is essential for healthy finances because it controls what you spend and how you prioritize your money to different sectors of your life. See our article on budgeting here. 

There is always room for improvement regarding one’s financial decisions. However, the good thing is, you aren’t stuck and you can make changes. By adopting some of these money habits mentioned above, you can slowly turn your financial health and overall lifestyle around. 

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Resources

- https://www.nerdwallet.com/article/banking/3-money-habits-to-carry-forward-from-the-pandemic-era?trk=hub_latest_content&trk_channel=web&trk_element=hyperlink&trk_elementPosition=1&trk_location=LatestPosts&trk_sectionCategory=hub_latest_content&trk_copy=3%20Money%20Habits%20to%20Carry%20Forward%20From%20the%20Pandemic%20Era

- https://bethebudget.com/good-money-habits/

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