December 2020: Lessons Learned from 2020 for a Prosperous 2021

LESSONS LEARNED FROM 2020 FOR A PROSPEROUS 2021

As we near the end of 2020 and reflect on the challenges and obstacles faced, the lessons we learned will carry us well beyond this year. Flexibility, transition, and transparency are words that accurately describe how organizations had to adapt to our changed world. As we seek to recover, reset, and eventually resume a normal life in 2021, Warren Whitney’s team of professionals took stock of the lessons they learned. Here are some key takeaways from our team of experts to support financial stability, a healthy business model, and a motivated workforce for years to come.

BUDGETING

Due to the unpredictable nature of COVID’s impact, budgeting was an ongoing exercise this year to account for decreases in revenue. Consider these practical tips to help you prepare and streamline the review process:

  1. Build a budgeting model that identifies the significant revenue and expense drivers to make it easier to revise the budget by adjusting the value of these drivers. For example, payroll or facility expenses are significant expense drivers.  Budgeting wages and benefits as an average cost of employment creates a flexible way to budget.  (Note – This may be challenging if there are varied pay scales)
  2. Understand the correlation between overhead and operating cost. If demand decreases, you know how the potential drag may impact profitability.
  3. Act swiftly when there is an opportunity for cost reduction, then consider reversing course when things improve.
  4. Be relentless about maintaining a healthy cash reserve and having access to credit from banks/owners.
  5. Budget for multiple and worst-case scenarios so you can react if and when needed.

Throughout this process, evaluate your business to make both smart and precise cost cuts and wide-ranging cuts.

 

DEVELOP A GROWTH MINDSET

Taking extreme cost-cutting measures could hurt more than help your business, resulting in organizations aiming low and focusing on survival instead of growth. View this as an opportunity to reinvent your business by finding new ways to offer your services. Survey your employees to foster innovation and make brainstorming a regular occurrence. Remember, the old ways of doing business may not be sustainable. Like with budgeting, evaluating how to stay relevant and in front of your customers should be an ongoing effort.

Another concept to consider is M&A opportunities. Look for businesses that have been hurt by the pandemic and are looking to sell. This may be a way for you to grow your business and increase market share.

CUSTOMER RETAINMENT

Your most loyal customers deserve the most attention. Consider ways to build and enhance these long-lasting relationships. Remember, customers not only recommend your business to others, but they can also stay around longer and be candidates for additional goods and services. Develop strategies to inspire, measure, and improve customer loyalty.

STAY INFORMED

Stay abreast of regulations (government mandates) and be prepared to pivot to reduce loss and exposure.  Additionally, know-how COVID is impacting your supply chain.  The combination of the pandemic and trade tariffs have disrupted the supply of some components produced overseas.  On the domestic front, COVID related work stoppages may suddenly impact your supply chain.

VIRTUAL WORK

Remote work has proven effective, and leaders should embrace this as a longstanding investment, not a short-term solution. It is anticipated that nearly half of the workforce will remain remote after the pandemic. Virtual teams have advantages such as increased efficiency and enabling a better work-life integration. Communication is a critical function to productivity, keep your team informed by maintaining an open dialogue and relaying goals and deadlines. Establish a routine with regular status and check-in meetings. When applicable, make sure meetings have stated agendas and recap the action items.

REMOTE ONBOARDING

Starting new employees in a virtual work environment is challenging and requires a well-planned approach. While the essential onboarding checklist remains unchanged, an intentional plan with individual attention will improve the chances for success.  This article outlines what to consider when your company reviews how to adapt onboarding for remote new hires.

TRANSPARENCY

This year called for companies to overcommunicate with their workforces to help offset the pandemic’s uncertain nature. Being transparent became an essential element to reassure employees, keep them happy, and motivated. However, transparency should be a part of your ongoing efforts. It fosters trust, engagement, and well-being. An example of how to do this is sharing the company vision. Sharing the company vision will make your employees feel connected, a part of the team, and give them a deeper understanding of why their job matters.

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Greater success is possible with the right pragmatic actions! If you have any questions or seek further clarification on these items, please call us at 804.282.9566. Warren Whitney is available to evaluate your readiness for today’s new operating environment. Our fractional assistance and project work can help you think through decisions and execute strategies. We can put together cash flow projections, manage HR issues, adapt technology and processes, and devise a strategic plan.

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