Small and midsize business crisis management
Findings from Oxford Economics Research
Our brains typically make future choices and plans regarding our prior experiences. However, we cannot rely on previous occasions to guide our decision-making when the future is uncertain or experiencing something new. The continued uncertainty and the lack of knowledge can be one of the biggest causes of our stress and anxiety. According to Gorka et al., various anxiety disorders, such as panic disorder, social anxiety disorder, and particular phobias, share a response to generalized sensations of dread and heightened reactivity produced by the uncertainty of ambiguous situations.
We believe for both humans and business, uncertainty is the main challenge, forecasting changes brought about by the unprecedented changes of the Pandemic and developing strategies to mitigated associated risks is solution. Though it might have severe consequences to keep thinking about the possible changes and transformations for individuals, it is almost impossible for organizations to survive without considering them. Small businesses, adopting a conservative approach, void of the realities of how to do business in the post pandemic world will invariably find themselves at a disadvantage.
We can easily see that some small and midsized businesses were unprepared for the possible changes by looking at the issues they face today. To determine how well-positioned these organizations were when the crisis struck, SAP and Oxford Economics looked at four crucial areas: short-term survival, talent management, operations, and long-term strategy. They came up with four preliminary plans that will prepare the small and medium-sized enterprises for future growth.
- Manage money!
The severity of existential threats varies by sector, firm size, and geographic location. Yet many small and midsize businesses are battling with cash management, liquidity gaps, and lost revenue while negotiating with suppliers and property owners and waiting for government aid. According to the Oxford Economics research, more than half of the 130 executives say risk management is the most challenging financial function for their growth.
2. Keeping the team together
During the pandemic, keeping the team together and working efficiently has been a challenge. Though we can see improvements related to acceptance of the post pandemic changes, research indicates that “Keeping the team together” is one of the more crucial challenges facing managers. According to the survey, though approximately 60% of executives see flexible working arrangements as an essential tool for the employee experience, only 29% changed their policies regarding the issue.
3. Find a way forward!
Many small and midsize firms are working to adapt to the reality of the current economy by providing new products and services (e.g., delivery, e-commerce), restructuring to suit immediate demands, and collaborating with other businesses in novel ways. When a comparison is made among many companies, the research shows that companies that emphasize innovation, collaboration, and agility are better prepared to respond to sudden and drastic changes.
4. Plan for recovery
As difficult as it may be during a crisis, the most resilient small and midsize businesses will be those that plan now. This entails recognizing changing client demands and preferences, as well as taking advantage of new opportunities.
Gorka, S. M., Lieberman, L., Shankman, S. A., & Phan, K. L. (2017). Startle potentiation to uncertain threat as a psychophysiological indicator of fear-based psychopathology: An examination across multiple internalizing disorders—Journal of abnormal psychology, 126(1), 8.
Is your business prepared for what’s next? (2020). Oxford Economics, 1–6. https://doi.org/https://www.sapvirtualagency.com/Orgs/Initiative.aspx?id=1000018521