The COVID-19 pandemic and resulting business closures have certainly painted an uncertain future for many organizations. However, with a presidential election around the corner and an unclear picture on the continued impact of the coronavirus, uncertainty might be the name of the game for the near future.
As 2020 draws to a close and a new year dawns, it’s important to understand that economic uncertainty doesn’t necessarily have to have a negative impact to your business. There are steps you can take to help safeguard your company, including developing a business continuity plan.
Settling an Uncertain Future
While COVID-19 dominates the news, there are more sources to economic uncertainty than headline generating topics. Even before the coronavirus broached U.S. shores, the United Nations was hinting at a global recession this year, as trade wars, currency fluctuations, the possibility of a Brexit no-deal and movements in long-term interest rates pushed weaker growth in both advanced and developing countries.
Now as we enter the final quarter of 2020, former predictions have been taken off the table, as the impact of the COVID-19 pandemic continues to alter the economic landscape. Kiplinger reports that economic recovery is underway as third-quarter GDP is anticipated to rise 18% at an annual rate after falling 31.7% in the second quarter.
While GDP growth is certainly good news, Kiplinger also predicts a long road toward full economic recovery. It could take well into 2022 to reach end-of-2019 levels again, as much of second quarter growth was spurred by government spending.
In uncertain times like these, businesses can benefit from the application of a venture team concept. Venture teams spread decision making across a group of experts from within the company, drawing from a larger pool of experience to guide the organization. According to Anthony C. Klotz, Associate Professor at Texas A&M Mays Business School, venture teams are most effective when they adhere to the three components of highly functioning teams:
- Provide a climate of psychological safety: While your business operates under a shared set of values and beliefs, teams have a similar climate. For venture teams to be effective, the environment needs to be one where differing viewpoints are heard and respected.
- Conflict resolution: Several studies show that conflict hinders team functioning, so establishing boundaries is essential. Leaders should develop norms for “healthy fighting” to push conversations in a positive direction. An alternative is to appoint an assigned critic to act as devil’s advocate, critiquing each idea to allow for critical discussion.
- Maintain balance between all players: In every team, there are star players and role players. Too often, it is easy to focus on the big jobs that bring recognition and neglect the smaller tasks that make the business run. During times of uncertainty, it is more important than ever for every player to be a role player when necessary. Even star players will need to roll up their sleeves and get dirty from time to time.
In addition to strong leadership and venture teams, the businesses that survive an uncertain environment will be ones that think ahead and plan for the future. Having a business continuity plan can go a long way in helping your business to achieve success.
Developing a Business Continuity Plan
While business continuity planning often refers to technology crises, such as a ransomware attack, a business continuity plan can also provide peace of mind in an uncertain economy. By creating a plan for recovering from other potential threats, businesses can be prepared to maintain customer relationships and pivot quickly into new opportunities when necessary.
The first step to developing a business continuity plan is to identify all of the risks that could potentially impact the company. As the economy continues to recover from COVID-19, it’s important for a business to understand how different economic recovery scenarios could impact operations and outcomes and prepare for each eventuality.
It’s also important to look at risks outside of the economy that could impact the business. For example, how will your company respond if a second wave of COVID-19 infection forces another closure or expands remote work orders?
Once a business has identified the threats and potential outcomes, the next step is to develop a plan of attack for each scenario. For example, how will your business handle a sudden surge in product or service demand if a vaccine is developed and there is a burst of buying activity? Are there other markets for your products if there are changes in global trade policies? Most importantly, where are your greatest opportunities for growth if a sluggish economy does persist?
Building your business continuity plan takes effort and possibly the help of outside experts, but doing so can be an essential step in surviving economic uncertainty.