6 May 2020 2257

What is waiting for the market in a crisis and how to adapt to it?

Over the past two weeks, in complete self-isolation, we have managed to do what even the largest companies have been trying to do for many years. Over the years, e-commerce has been gradually developed, the possibility of remote work has been tested, and new communication channels have gradually developed that would make working with customers easier, faster and more convenient. All this in a completely unusual way became available and in demand in a matter of days. And now the offices are quietly working online, and messengers and social networks are used as the only effective way to exchange information.

As a result, we understand that such a sharp jump in the development of online communications may be the only way to avoid a complete shutdown of business on a global level. Nevertheless, there are a number of other problems that still remain in question, and the heads of private organizations and government agencies are actively looking for ways to solve them. The first task in this list is the technical impossibility of fulfilling obligations to partners. This is due to the forced reduction in revenue and the inability to keep expenses in the same volume. Goods become less in demand and remain in excess in warehouses due to the transition to remote work, companies stop renting offices and leave only the most necessary specialists. Everyone else just loses their earnings. Long-term marketing projects and planned communications in the market no longer make sense. And this is not counting corporate loans, debts to banks and taxes to the state, which have not yet been canceled. In this connection, the question arises about which payments are in priority, and what to do next if the financial crisis drags on for a long time. It is extremely important to preserve jobs and ensure a stable income for employees, as well as to support everyone who is in a more difficult situation. This can be a restructuring of internal processes or, for example, a reduction in the cost of rent for office space. Only in this way do companies have a chance to survive in the conditions of severe economic stagnation.

The second major problem is maintaining a trusting relationship with your employees. Many of them are worried about their families and every day they become less confident in the future. Finding themselves "overboard" of their native company, many people begin to feel depressed and perceive such a phenomenon as staff reduction at their own expense. That is why it is so important to conduct an open policy to the maximum and give more information about how things are in reality. It is necessary to convey to everyone that the anti-crisis measures taken are forced and have only one goal – to save the company. That they are all temporary and completely depend on the market situation. Understanding this will make it easier for employees to experience these changes on a psychological level. The most effective way to do this is to work remotely. And although it requires some effort and proper organization, people do not lose touch and the usual communication with each other.

It is almost impossible to predict the dynamics of demand recovery in the near future, but planning activities for restarting work will give us the opportunity to prepare for different situations and respond more quickly in the event of market failures. Such as, for example, changes in the behavior of customers and their consumer habits. Obviously, most people will reduce their spending on non-essential items and rationalize their spending. People will buy more online and make fewer impulsive purchases in stores. Another risk is major changes in production and logistics chains, as well as restrictions on the export and import of products between countries. This will lead to an inevitable shortage of products and the ruin of companies in various fields.

A source: https://hbr-russia.ru/liderstvo/lidery/827766

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