Uri Camarena, the Director of Business Consulting here at Meda, sat down with us on Facebook Live to share some tips for how minority business enterprises (MBE) can succeed in our current time of dramatic change and new norm. He shared helpful insights about how to adapt to the new normal because “traditional metrics and assumptions have been rendered irrelevant really.” We now must turn to the advice of those who have been through a similarly drastic time of change in history.
Ian Davis is a former managing partner at McKinsey & Company was quoted during the 2008 financial crisis. What he said then is very relevant now.
- “While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years.”
How Small Businesses Can Adapting to a ‘New Normal”
Step One: Find Resolve
The first step in crisis management is to assess what the priorities are that need to be examined first. Last week, our Director of Financing Solutions, Patrick Pariseau, also discussed prioritizing the immediate needs of your company when he shared his tips via Facebook Live on April 10, 2020. Uri expanded on this by discussing more of the findings from the 2008 McKinsey article. It states that the first step is examining your business’ current situation. “We need to determine the scale, pace, and depth of action required at the state and business levels.”
Step Two: Be Resilient
Resiliency is defined by McKinsey as “the ability to absorb a shock, and to come out of it better than the competition.” They go on to mention that resiliency “…will be the key to survival and long-term prosperity.”
- Companies who were considered resilient through the 2008 financial crisis shared better preparation strategies than other non-resilient companies. They had flexible and quick abilities to cut operating costs and stronger balance sheets.
- If the economic impacts from COVID19 continue, companies will have to rethink their business models. Build backup and safety plans, especially when it comes to supply chain operation. (McKinsey & Company)
- Resiliency in your company can be augmented by focusing on the short-term issues in cash management for liquidity and solvency.
Uri stated that “Cash is King.”
Step Three: Returning to Business
Today, most global supply chains are being affected by COVID19 and Uri shared the importance of each point in the supply chain. He mentioned that the weakest point in the chain will determine the success or failure of a company. Re-opening businesses that have been closed is only the beginning. He recommends that the reassessment of your business’ systems could bring back effective production at pace and at scale of pre-shutdown operations.
Uri said: “I would take the lessons that you’re learning right now and think about them, archive them, and make sure that if this happens again, that you are ready for it.”
Step Four: Reimagining the Framework
A lot of us are asking, will this be the new normal? As the pandemic continues, Uri recommends that business owners should not be afraid to re-imagine your mission, because it is something that must change – it’s not static. Similarly, McKinsey & Company states in their article, “institutions that reinvent themselves to make the most of better insight and foresight, as preferences evolve, will disproportionately succeed.”
Uri said: “Rapid learning is what it takes to drive productivity, especially when labor is unavailable.”
Step Five: Reform
McKinsey & Company states that “business leaders need to anticipate popularly supported changes to policies and regulations as society seeks to avoid, mitigate, and preempt a future health crisis of the kind we are experiencing today.” Uri continues that sentiment and points out that in this time we have tried out the experiment to work from home and have found surprisingly positive results. This is an example of a learned practice that can be implemented to mitigate a potential future crisis.
Uri’s final remark on adapting to a ‘New Normal” gives us a bright outlook on how creativity and new innovative ideas will lead to societal lessons and insights into how adaptation has the power to strengthen us all.
“We’ve learned from this experience, there’s no doubt about that and let’s hope that we will come out of it stronger and more imaginative in the ways that we do business.”