BUILDING BUSINESS RESILIENCE THROUGH PIVOT PLANNING
To say that COVID-19 wreaked havoc on the daily lives of people worldwide is an understatement. With unemployment soaring, a majority of companies shifting to a work-from-home strategy and stressors increasing on supply chains across industries, 2020 brought a level of uncertainty that many have never experienced. Just take a look at a few startling stats:
- A $1.5 trillion economic output loss for the United States economy in Q1 2020.
- An estimated $13 billion in losses of beef cattle operations.
- A 10% year-over-year spike in U.S. packaged foods and beverage sales during March 2020.
- $120 billion in lost restaurant sales in three months.
Organizations caught off guard by this shock to the system were forced to scramble to implement entirely new ways of doing business, both internally and with customers. While companies oftentimes have plans in place to deal with common hiccups such as late shipments, technology failures or momentary disruptions in the supply chain, only a few have prepared detailed strategies to react adequately and appropriately to seismic change. COVID-19 made it clear that it is imperative to prepare for the worst, regardless of how unlikely it seems.
WHAT IS BUSINESS RESILIENCE?
“Business resilience is the ability to rapidly adapt and respond to business disruptions, safeguard people and assets, while maintaining continuous business operations.”
During the course of an NFL season, teams spend the week leading up to each game preparing for their opponent. They study opponents to assess strengths and weaknesses, add in new plays to specifically target those weaknesses, practice both the new and standard plays in their playbook and ultimately build a complete game plan to win the game. However, football is a physical sport, and it is not unusual to see a key player go down with an injury early in the game. In this situation, teams don’t simply throw in the towel. They shift their strategy from the one that they worked on all week to plan B or plan C in order to prevail.
While your industry is likely different than professional football, the principles of being prepared to adjust your plan when things go wrong are strikingly similar. Ask yourself how prepared you are to answer the following questions today:
- How will you respond to a potential labor shortage if seasonal workers cannot travel?
- How well-equipped are you to meet a dramatic spike in consumer demand for your product?
- Is your organization or industry adequately prepared to quickly shift supply from one market to another?
- What is your strategy for dealing with sudden transportation challenges in your supply chain?
- Do you have the proper infrastructure and policies in place to support a workforce that works remotely for a sustained period?
If you are uncertain or unprepared to answer those questions relative to your organization or industry, Pivot Planning should be a near-term consideration.
HOW PIVOT PLANNING WORKS
In “The Art of the Long View,” Peter Schwartz describes how the human brain is hardwired to explore the results of the actions we take in our minds before actually executing them. However, since our imaginations are limited through our own worldview, it can be difficult to perceive a completely unexpected future. This is the driving impetus behind scenario planning.
Pivot Planning builds on this methodology by pushing you to explore worst-case environments that could have potentially catastrophic effects on your business. Pivot Planning allows an organization to define a set of core strategies that will be executed regardless of the current environment while also developing the set of strategies that would be employed based on specific scenarios. For example, how does an organization’s approach change when faced with low supply and high consumer demand compared to an environment of high supply and low demand?
In just a few short months since the pandemic hit U.S. shores, numerous beef processing plants shut down, and food producers were not able to meet retail demand despite massive losses at foodservices. Shortages were seen throughout the foodservice and retail industries. Farmer groups had to work double-time to qualify and secure government loans. Various restaurant chains, such as FoodFirst Global Restaurants, the parent company of Brio Italian Mediterranean and Bravo Fresh Italian, were forced to file for bankruptcy.
While these businesses would’ve likely experienced a dip in business due to the environment, Pivot Planning could have provided them the opportunity to mitigate risk and increase the chances of coming out of this pandemic in a better overall position. Since the food and agriculture industries serve as the backbone for our daily lives, they need to be as reliable as possible in a wide range of scenarios. Those with the foresight to prepare will emerge stronger in a new environment.
COVID-19 has demonstrated how important it is to be able to shift entire lifestyles and business practices on a dime, while still remaining operational and effective. Now’s the time to start building a resilience plan to be prepared for the next time disaster strikes.
Learn more about Pivot Planning and how our team of experts can help you.
Contact us at email@example.com to get started today.
- “The Economic Impact of COVID-19 on U.S. Agriculture”, AgAmerica
- “Food Spending Growth Due to Coronavirus in Select Countries Worldwide as of March 2020”, Jan Conway
- “Restaurant sales remain well below normal levels, despite May uptick”, National Restaurant Association
- “The Five Things You Need to Know About Business Resilience Planning”, FMLink
- “These Restaurant Chains Have Declared Bankruptcy Due to the Coronavirus”, Restaurant Business