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Operations: Time to take stock, and adapt

Joanna Walton Partner, PwC United Kingdom

During the first months of the pandemic, the first priority for many businesses was cutting costs in order to survive. For many, a fairly blunt approach – battening down the hatches and trimming costs that weren’t adding value – worked. But it’s not a long term strategy. We can’t kick this particular can down the road for much longer.

Almost a year on, we’re through Brexit and into our third lockdown and it’s time to reassess. The one thing we know for certain is that when this pandemic ends, we won’t ever return to the pre-pandemic ‘normal’. So much has changed – consumer preferences, accepted working practices, our understanding of what makes a resilient supply chain to name just a few. And that requires a new perspective on operations and costs.

Office Tower in New York City

Let’s take, for example, workforce productivity. The first lockdown prompted as a blitz spirit – we were all in this together and morale, generally, stayed high. Much of the pre-pandemic nervousness about the impact of remote working on productivity was dispelled and in general, the sudden, enforced experiment in mass home working was deemed largely a success. But the cracks are beginning to show. The most tested sections of the workforce, notably home-schooling working parents, are starting to bow under pressure. Remote working doesn’t suit everyone so it can’t be a blanket policy.

Businesses have been in crisis mode for so long that many haven’t had time to take stock and think about their place in a very different business landscape. During the first lockdown, businesses were forced to be reactive, but this time around, proactive wins the day. So here are a few thoughts:

  • Decide where you want to go. Take the time and space needed to form new ideas, a clear direction for the business and a cohesive plan to get there. Who are our customers and how and where do we serve them? What has changed? What is the future of the business and what do we need to do, operationally, to get us there? What are we going to invest in, and build? Make sure you don’t cut the ‘good’ costs along with the bad.
  • Seek an outside perspective. Can’t see the wood for the trees? Then look for another perspective. An outsider’s view can be a revelation, as can insight from peers who are addressing the same situation. The global turmoil gives an opportunity, for those brave enough to take it, to strip your business back to its core and make sure that every pound and hour spent is making you stronger.
  • Communicate. Over the coming months the volume will need to be turned up on encouragement and leadership. Being seen to be ‘doing the right thing’ has never been more important. Stakeholders need reassurance, and to know that there’s a plan for the medium and long term - so you need to have a vision, and a credible roadmap for achieving it. It’s a time to be honest about what’s happened and clear about the future – stick your neck out and say unequivocally that this is the direction we’re heading in, and this is what we’re going to do, and accept that there will be bumps along the road.
  • Focus on sustainability. The pandemic laid bare the vulnerabilities in international supply chains and has forever changed business’s approach to contingency planning. Operational priorities around sustainability and flexibility take on a new importance, reinforced by Brexit – meaning sustainable solutions for the business that reinforce resilience, and making sure that people are focused on the activities that genuinely add value to rebuilding the business.

It’s likely that many businesses will emerge from the pandemic smaller and leaner, but stronger – and that’s not necessarily a bad thing. It has been an extraordinarily tough year for many, but there is good reason to be cautiously optimistic. The pandemic has changed us, and adapting to the new world takes work – but the rewards will be there.

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Joanna Walton

Joanna Walton

Partner, PwC United Kingdom

Tel: +44 7714 567112