THE DEVELOPMENT OF NEWLY REPORTED CASES IN GERMANY REQUIRES ACTIONS TO BE TAKEN IN A COMPANY – CRISIS MANAGEMENT FOLLOWED BY A RESTART AND RAMP-UP
Since the number of reported infections in Germany is decreasing, politicians have already announced loosening the lockdown restrictions. However, after the lockdown we are going to face another “new normal”. Due to changes in demand, disrupted supply chains and internal mismanagement, some sectors and companies will emerge faster than others.
A proactive and determined corona management action plan was essential to lead companies though the first step of the corona crisis unscathed. Now it is important that companies establish a successful restart management in the post corona crisis phase to strengthen the company’s position and to make it more resilient for the future.
Many of our colleagues at Executive Interim Partners are currently working in companies as interim managers in board positions or as consultants, in order to lead them through the corona crisis unscathed or even strengthened.
We have summarized our practical experience of recent weeks for an effective restart.
Key action list for restarting your business and make it more crisis resilient
In the following weeks, top management need to restart and ramp up their businesses. We have summarized the key actions for the restart.
The „new normal“ will demand resilience, agility and determination from managers
The “new normal” will be characterized by uncertainty since there is neither a vaccine nor a cure available for the coronavirus yet. Hence, companies have to be ready to “restart business” but also have to be able to react and adapt quickly to a “second wave” that may hit them when governmental lockdown restrictions are loosened and the number of reported cases of infections increase again. While preparing for a restart and ramp up, companies are facing several challenges simultaneously.
What the situation looks like today and what actions are to be taken?
Many companies already suffer from liquidity issues due to lockdown. Most companies find themselves in an unpredictable situation which makes it highly challenging to assess their future liquidity needs and requirements.
In spite of specific state- guaranteed loans (e.g. KfW loans in Germany) most companies are struggling to get fresh equity and debt into the company. Commercial banks appear to follow the same strict loan approval process for providing KfW backed loans.
Sales & Customers
Some industries are fully hit by the corona crisis. They now face high volatility and uncertainty in terms of future demand. Business models and target markets are under review according to speed and direction of market recovery while plans for strengthening digital sales channels and shifting to digital marketing are discussed.
Supply Chain Management
Companies find themselves and their suppliers in a scattered situation across Europe and the world with regard to timing and constraints of shutdown release. This non-transparent situation has an impact on survival and delivery reliability through all tiers of the supplier base.
The crisis unfolded lacks in IT infrastructure. Many companies are exposed to high risks in data and cyber security, also as a result of their primary focus on operational continuity and on providing solutions for employees to work from home during shutdown.
While many companies focused on the environmental aspect in the SHE (Safety Health and Environment) standards, there is now a stronger focus on health. Plant managers are working hard to gradually ramp up production and develop new shift models and production plans.
Mergers & Acquisitons
While some companies are considering to raise cash by selling and divesting business units or subsidiaries, others are looking for bargain deals to take advantage of the crisis situation.
Companies have reacted to the COVID-19 crisis by putting a stronger focus on employers’ statutory duty of care for people’s health and safety at work. In addition, many companies have introduced a temporary short-labor regime and executed other restructuring and cost cutting measures.
In the following weeks, top management need to restart and ramp up their businesses. We have summarized the key actions for the restart: