Companies that want to survive the current turbulence in the global and South African economies should seize the opportunity to improve operational efficiency and customer focus in the months ahead. Those that adapt fastest to the realities of a downturn in the market will emerge as strong players once the shakeout is complete.
challenging market conditions offer an opportunity to create a more efficient business without making compromises on the customer experience. We’re looking at the current conditions as a rich opportunity to segment our customer base and strengthen the business using a range of levers.
One way is to focus on different elements of the business over shorter periods of time. While we operate in an environment expecting negative to flat growth in the near future, the laser focus could be on maintaining positive cashflow. Thereafter, once a semblance of stability has been achieved, businesses could shift to improving working capital efficiency, restructuring costs and improving margins. This phased approach not only helps to defend profitability in the short-term, but also to ensure sustainability in an increasingly competitive industry in the medium term.
As global economies are negatively affected by the COVID-19 pandemic, and pushed to adjust strategies to cope with the new normal, companies should not allow their course to be set by external events and stakeholders over which they have no control. Instead, they need to look at the factors they can control – their customers’ experience, their operational efficiency, their cost to serve – and optimise them as far as possible.
Though the present environment means most companies are juggling survival in the shorter term and medium-term sustainability,, businesses must look past industry and economic conditions to focus first and foremost on the customer.”
To achieve this, business leaders must spend a lot of time understanding what their customers and in some cases their customers’ customers need to perform better. As business leaders, we need to do more than the run of the mill operational activities we’ve always done and pivot our offering to be relevant for the context and environments within which we operate thus be relevant in the new normal.
The key to meeting this objective is maintaining rather than degrading our focus on our customer value proposition. However, the difficulty is how does one take costs out when this will adversely impact customer service objectives, thus their experience. This is an age-old economics conundrum of managing utility and scarce resources. One way to achieve this is to focus on improving efficiencies through digital transformation that not only optimises internal operations but ultimately enhances the customer’s experience. As such, long term collaborative relationships with customers become central to mutually beneficial activities.
This first appeared in IT-Online: https://it-online.co.za/2020/06/18/market-turmoil-discipline-focus-opportunities/
[Photo by Carlos Muza on Unsplash]