Jules Verne was one of the pioneers of the science fiction/fantasy genre. He was an immensely popular author because he discussed what a lot of people took for granted following the Age of Discovery…venturing into the unknown. Twenty-thousand Leagues Under the Sea, Around the World in Eighty Days and A Journey to the Centre of the Earth remain some of the best-selling books of all time and are widely available today.
As we move on from the Covid-19 Pandemic, the world will look familiar but will be remarkably different, just like the worlds Verne imagined.
Deduction and interrogation
Without being dismissive of the challenges that are involved in the successful execution of a business rescue plan, finding out why a company is in distress, and how to address the root cause of this distress, is a strategic process.
It is not a mystery. It requires consideration of the new world and the strategic models that can be useful tools during a rescue.
This process involves asking some probing questions to interrogate why the company is in distress and make key recommendations going forward:
• what business are you in? Defining this is not as simple as it sounds;
• what does the market look like now;
• who are the company’s current customers and why do they choose to do business with your company;
• if the company were to enter this market today, how would it do it;
• how do companies transition their existing assets and liabilities when formulating a new business;
• what caused the distress? Was it the Pandemic or did the Pandemic bring underlying issues to the surface;
• how do distressed companies deal with business partners while the business is in transition.
This seems like an arduous task. However, it is the first step in mitigating underperformance or distress.
What will the behaviours, wants and needs of your customer be?
The second component of this assessment is oversight and foresight. Who are the customers you want now? What do they want from you? Real insight into customer behaviour will mitigate the business risk of your turnaround strategies.
There has been a definite shift in consumerism in response to the Pandemic which is important to take note of and work into future business models.
At the start of the Pandemic, EY reported that the covid customer is defined by the following characteristics:
• I am wealthy & healthy and want to spend after lockdown;
• I need to conserve my resources and rebuild my wealth;
• I need to remain isolated until the Pandemic goes away;
• We are all going to die so just spend; and
• I am young Covid Free and out of work.
Each of these client segments come with their own challenges and consumption characteristics. However, there are some common characteristics that BRPs need to build into their advice to companies:
• research points out that consumers are 90% more likely to do business with companies that they trust. This trust is built before there is any interaction with the company. This is done through brand association, experience, and social media. Do not ignore digital marketing and be responsive to customers when they ask questions. Current clients belong to the instant gratification generation, if you cannot answer a query in real time, the consumer will go to another company who can;
• health and safety are a priority. If your customer can purchase or consume your product/service in a socially distanced manner (through online purchasing), they will. If you do not have a digital marketplace, develop one. Given the duration and different strains of Covid-19, it will be a long time before we reach any real herd immunity. Ecommerce is a growing trend that is not going to change soon.
It hinges on trust
Trust is the corner stone of industry. Trust is built with clients long before the client contacts a company. Every interaction that you do through online and other marketing channels influences this trust.
Clients want to do business with companies who will make them feel as if they are the only customer. At the same time, the company must be socially responsible and in touch with both customer needs and broader social issues.
Distressed companies may not even need to reinvent the wheel. Do not rebuild or redesign products/services unless it is absolutely necessary. The hardest work, when it comes to becoming more dialled into your client is to enhance the customer experience. Anticipate what your client wants before they vocalise this desire. Eliminate challenges/roadblocks before they become problematic.
Rebuilding trust after a period of distress will engage every element of your business and relationships. Customers and suppliers will be wary, staff will be wary of commitments. Social communication will be key in rebuilding trust in you, your company and your brands.
Confidence and optimism
After any crisis optimism will always rise. It is human nature. We will not dwell in the dark. The roaring twenties followed the great flu epidemic. Your optimism should not be misplaced, but a confident informed approach will help rebuild trust.
Our challenge, as BRPs is to incorporate these subtle elements of our risk management into business rescue plans.
Robin Nicholson is the Director of Corporate-911