P&A Grant Thornton News

4 elements to shape new norm in business amid COVID-19

Marivic Españo, chairperson and CEO of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

Companies and business leaders will have to come to terms with workforce, capital and resources, operational model, and supply chain, which will be essential in shaping the new norm in operating under the COVID-19 pandemic.

“Even if the impact of the COVID-19 pandemic varies across industry sectors and regions, it is no exaggeration to recognize that the struggle is real,” said Marivic Españo, chairperson and CEO of P&A Grant Thornton.

CEOs working urgently to balance dozens of critical priorities each day are starting to focus on two leading questions: “How can we navigate through the crisis to emerge stronger than others in our industry?” and “How can we learn through this experience to win in a new world?”

On the first element of workforce, Españo said that during these uncertain times, businesses must assess their plans and realign their activities to adapt to the new rules prescribed by the government.

“Businesses must be willing to try new practices, switch to better tools, and update action plans for the short, medium, and long terms,” said Españo. “Updated processes will help businesses adapt to a changing market and set them on track to a brighter future,” she added.

On capital and resources, Españo said that during pre-COVID- 19, cash budgets were calculated monthly. Since the coronavirus crisis, however, organizations have been reviewing their cash assets as often as weekly. How do you budget your organization’s cash during such times?

She urged firms to project accounts receivable realistically and review other cash sources. Next, list down all your expenses and other cash outflows. Finally, analyze your accounts payable to suppliers, taxes, and payroll from the previous period.

For operational model, she said that companies must rethink your operational model and allow the business to adapt. In the long term, think about implementing process automation and integrating technology into operations. When reviewing business activities, consider the shift to Industrial Revolution 4.0 or digital transformation.

“Set new business goals with such changes in mind, make in¬formed decisions, and take advantage of every opportunity. Dare to innovate,” said Españo.

On last element but very essential concerns about supply chain.

When a crisis such as COVID-19 hits, she said, organizations need to reinforce their supply chain to continue meeting customer and client demand.

“Securing your supply chains is paramount,” she said. It is done by assessing the situation quickly and then moving forward with an action plan aimed at preventing problems and implementing solutions.

Monitor inventory levels as well by establishing critical inventory thresholds and building stockpiles, as needed. Likewise, strengthen relationships with customers by finding alternative shipping methods, adjusting delivery schedules, and being transparent about your challenges. Lastly, cement supplier relationships by controlling your cash flow and negotiating payment terms.

“The uncertainty that is this far-reaching makes it challenging to control the challenges at hand, let alone in the years ahead. It is imperative to reconstruct for the future and not solve the problems of the past,” she said.

Companies have begun to consider their return to health, but for most, the prepandemic business as usual won’t be nearly enough.

“To move beyond survival mode, organizations need to think beyond their defaults, reimagining how they recover, operate, organize, and use technology, setting the foundations for sustainable success. In a twist of irony, a crisis like this coronavirus pandemic brings new opportunities and should be a trigger to explore new directions,” Espano concluded.

 

As published in Manila Bulletin, dated 23 May 2020