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Covering post-pandemic c-suite issues

Contents

Covid-19 has presented many challenges in the economic landscape.
Organizations have had to implement new policies and changes on short notice, and have had to adapt the way of working in line with government guidance. With further changes likely ahead, businesses need to remain agile so that they can continue to respond to the guidance in a way that allows businesses to adapt and grow.

In this article, we look at what we can expect to include and consider in a post-pandemic strategy, looking at financial strategy, HR, M&A, and Technology.

Financial Strategy

Any strategy needs a multidisciplinary approach to be successful. Internal factors as well as strategic partners must be taken into account when considering how best to move ahead financially.

Before any decisions are made about the best financial strategy, market and competitor analysis should be part of initial fact-gathering – as PwC notes in their Annual report, auditing has an important role in helping stakeholders make decisions during the crisis. 

As part of the strategy, C-Suite executives must look back at targets and goals set before and during the pandemic to prioritize where possible the needs of the company. This might mean holding off on new hires, or quite the opposite, planning for expansion as the post-pandemic economy recovers.

Throughout this process, planning must take into account wider changes in the economic and business world, such as the upcoming changes to the minimum wage for workers in Long Island, Westchester, and the remainder of New York State in 2021.

According to the Partnership for NYC COVID-19 Impact, most business leaders believe their industry revenue will be affected negatively in the next 6 months, so sound financial strategy suggests that cutting back on spending and streamlining costs where possible will allow companies to focus on growth – and those who can focus on growth through this time are likely to come out stronger post-COVID.

Throughout the pandemic, there has been an upswing in demand for specialist tax advice. Current uncertainty and less than clear guidance from the government has concerned businesses both large and small, so there is a real need for specialist support and advice about outsourcing and accessing available relief. 

Mergers & Acquisitions

Current M&A patterns can be extrapolated from data gathered around the last economic downturn in 2008, combined with information about how businesses are succeeding through the pandemic. M&A strategy should include the important step of analyzing the wider market for scope and growth.

Historically, those who take the initiative to grow despite the economical concerns have been shown to thrive. According to Shoosmiths, amongst the big winners from the post-financial crisis following the 2008 downturn were those companies that acquired quality assets. Smaller deals remain popular, but buyers seem to remain cautious about making bigger deals. It is important to note that even through the pandemic, those who have just closed deals are under pressure to make a return on their investment, even under challenging circumstances like productivity decreases from staffing and workforce disruption. According to the Accenture report, COVID-19: Impact On Mergers & Acquisitions, firms who bought in a downturn tend to have a higher three-year Total Shareholder Return (TSR). Their study shows that the deal volume and value had dropped for the first half of 2020, mainly from a drop in mega-deals while smaller deals continue.

M&A returns in downturns

Increase from M&A during epidemic outbreaks
30%

The volume of opportunistic, distressed, or stressed M&A opportunities will increase throughout the pandemic and even post-pandemic – perfect for those looking for deals. It is important to note, however, that these carry an increased risk. Stress testing in the current environment and potential future climate should be part of the due diligence and risk assessment investigation before making any deal. Shoosmiths note in their report that rapid changes in the industry can affect not only the company itself but also other aspects like the supply chain. Buyers should be placing huge importance on contingency and recovery plans, to understand how they deal with WFH procedures, how interruptions to production or communication can be mitigated. There is an opportunity for strategic growth, but the scope of business needs to have room to grow – and businesses seeking to make deals need to understand that current WFH practices can delay timelines significantly.

The main takeaway from this is that the right deal made in M&A through the pandemic can encourage growth and see a healthy return – if due diligence and risk assessments are completed with a view to the wider impact of Covid-19 and government guidance.

HR Strategy & Culture

The majority of workers are still working remotely – according to the Partnership for New York City, just 8% of the city’s 1.2 million workers returned to the office this summer as reported by the New York Times. Even major players like American Express have only reopened their city offices at 10% capacity, and are extending their work from home policy until June 2021. 

With 95% of businesses implementing WFH policies in New York, it is important that any return-to-work policies take into account local employment laws, like disability and discrimination. Deciding whether employees should remain WFH or return to the office should be a decision made as part of the wider strategy – whether the ultimate direction comes from the CEO or the Head of HR.

Even if employees remain WFH, it is important to maintain your company ethos and culture. PwC offers an example of options to keep employees engaged and involved, through regular online meetings and training sessions that focus on upskilling, communicating, and reassuring, with a special focus on mental and physical health. The importance of regular communication and reassurance for remote employees cannot be understated, and C Suite executives need to find a balance between the benefit of the company and the wellbeing of the employees – keeping motivation and engagement high even remotely. 

If employees are to return to the office, consider a phased approach for employees, much like Amex in the example above. Reducing office capacity as a starting point, and remaining in close communication about what employees can expect and when. Throughout this planning, business continuity should be at the forefront of the strategy should the government increase lockdown measures again.

NYC employees currently WFH
78%

Tech & Digital Strategy

The current pandemic has demonstrated in a very clear way the importance of technology – and the right technology – in business continuity and growth. The combined challenges of remote working, company culture, and strategy have meant that teams need to improve processes and work on analyzing areas of need to manage home working while continuing communication.

The challenges businesses face through Covid-19 have revealed the need for modernization, as many systems and software may have been out of date, hindering remote working. Upgrading or improving current systems may make a difference, such as hosted online data centers to manage and improve M&A timelines – but it might be time for your digital strategy to include a complete overhaul of technology, systems, and software. Digital transformation could also allow IT and security policies and procedures to be upgraded because there are increased risks posed by home working that may not have been taken into account. 

In a study by CyberArk, 57% of IT professionals surveyed said they haven’t increased their security protocols in this period, despite the huge risk. For example, some productivity apps that your employees might be using are more likely to attract phishing attacks according to Lookout data. This is just one facet of the processes that might need updating, and where digital transformation can make a big difference to increase security and productivity.

If the post-pandemic world sees a long-term shift to remote working, there is scope for established businesses to consider acquiring tech start-up companies. There is a growing need for technological advances across the board, and increased consumer demand for innovation that makes an acquisition of this kind attractive. According to Enterprise Talk, “long-term shift to work from home will make acquiring small tech companies a prospect to established businesses that are planning to fit in the post-COVID-19 world.” 

Is your business ready and secure for a remote workforce?