The new coronavirus – COVID-19 – is changing our world in unprecedented ways.
The impact of these changes on our personal lives and businesses is already being considered, with only a handful of probable outcomes being fully understood.
We collectively understand the importance of personal separation, minimizing face to face contact, keeping our distance, thoroughly washing our hands and avoiding touching our face to slow down the spread of the virus.
The objective is to spread the impact over a longer term to help our medical services cope with the burden to reduce the number of infections and ultimately deaths.
Every individual and every business has the collective responsibility to do everything we can to slow the spread of this virus.
There are three outcomes that we can anticipate and plan around – for ourselves, our staff, our businesses and everyone we interact with.
The first outcome is that it will likely be a minimum of 6 to 8 months before things have returned to anything like normal. We have to accept this is now inevitable and on a global scale.
On the 12th March 2020, the UK’s Chief Medical Officer predicted the peak of people contracting COVID-19 being between late May and the end of June, with infection rates begin to decline thereafter.
The New York Times published that infections in the USA are expected to peak in July or August, with 9.4m people infected, and return to “normal” around October.
For almost every business, 6 to 8 months is a lifetime when predicted sales income can no longer be relied upon.
2. Self-isolation and remote working
The second outcome is that self-isolation and the ability to work remotely will have a major impact on available resources during the next 6 to 8 months. We must prepare our organizations to deal with the challenges and pressures arising.
The question we are all asking is how we can best protect ourselves, our families and loved ones.
Avoiding the commute and an office environment is now essential. Enabling remote working should (wherever practical) be fully supported by every business with immediate effect.
We can plan for self-isolation and remote working for every aspect of our organizations' operations, but also make changes to enable this capability wherever possible or as important, wherever necessary.
Probably the highest priority for every CFO is the critical ability to deliver timely and accurate financial management information. If your current processes do not enable 100% remote working, you are in danger of running financially blind.
The third outcome is a post-pandemic recession. Recessions have historically culled weaker businesses and the businesses that survive then prosper by picking up the slack as the markets recover.
This is different. We must plan to protect our organizations and our people from the impact of a shrinking economic environment.
We have never faced a comparable situation where, as in this case, recession is not about commercial sentiment, but rather about everyone avoiding personal interactions and the impact of this is going to be far-reaching as COVID-19 infection rates grow and countries effectively shut down.
Travel, hospitality, entertainment, sports events and retail are already in financial meltdown and we are only a week or two into this from a UK, US and European perspective.
Remote working now a critical business need
It now seems increasingly likely that the government will instigate an enforced lockdown in the immediate future to slow the growing infection rate. If voluntary self-isolation continues to be ignored, they will have no choice. Every business will have to function with all staff working from home.
History shows that taking decisive action at the outset significantly improves the probability of survival. Every CFO has less faith in revenue projections, cashflow is now king and conserving cash is top of their agenda. Timely customer payments are critical, as is the judgement of when to cease supply to mitigate over-exposure to bad customer debt.
For the same reason, ensuring critical suppliers are paid on time may be the difference between survival and failure.
An optimistic view is that this will all blow over in the next 8 – 12 weeks and to take a “wait and see” attitude. If that is your choice, I am sure every reader hopes you are right.
A commercial view is to hope for the best, plan for the worst and get your house in order to be able to meet either outcome, in the knowledge that reality is probably somewhere in between.
There is one more certainty. In the post-pandemic world, staff productivity and making every penny work harder will decide which businesses are best able to reap the rewards of the growing demand.
If you want to find out more about how you can enable your finance team to work from home in the current situation and truly transform your processes, please click here.