How Businesses Can Adapt to Changing Mandates Under COVID-19

From China to New York City, government responses to the COVID-19 pandemic create domino effects for many businesses. In cities and states under mandatory lockdown, production shutdowns impact sourcing for supplies, materials, equipment and merchandise. Elsewhere, social distancing constrains activity, leading to lost customers regardless of industry. Areas have closed restaurants, recreational and entertainment venues, leading to unemployment and impacting businesses that are selling consumer goods online. 

Governments make their decisions based on recommendations from virologists and public health agencies such as the Centers for Disease Control and World Health Organization. The public health experts use models to forecast potential scenarios, including the effects of measures such as social distancing, and account for factors such as a vaccine not being available for as long as a year. 

“The first thing you need to do immediately is triage, or what we call a crisis-management mode,” says Nada R. Sanders, PhD, distinguished professor of supply chain management at the D’Amore-McKim School of Business at Northeastern University. “The virologists all agree that this has the potential for major disruption.”

Making quick changes must become the new normal for business owners. Use these strategies to adapt.

1. Cut back expenses.

ATXcursions in Austin, Texas, offers river tubing April through October. Owner Jesse Crouch, who employs 15-20 people, says not everyone has cancelled trips but he won’t know the impact for two months.

“The biggest thing is to cut costs immediately,” he says. “Trim down anything unnecessary, anything you don’t have a contract for. The world is on pause right now and there’s nobody with a reliable prediction about the next several months.”

2. Find alternative sourcing.

If you have suppliers exclusively in COVID-affected countries, Sanders recommends immediately looking for other sources. Businesses should use this moment to diversify by finding alternatives in different geographic regions, since it's likely that sourcing will be affected worldwide.

“Look at your key customers and products, key suppliers, margins and profitability, and make strategic decisions,” Sanders says. “If there’s an area with no source of supply, it will not be restored in the immediate horizon, based on what the virologists are saying.”

3. Adjust processes.

Can you adjust production, operations or services to supply a product or service that has become scarce? This could solve both a supply and a demand challenge. For example, Sanders says a Toronto company quickly made small changes to production during the 2003 SARS outbreak to produce hand sanitizer instead of lotion.

“Figure out if you can tweak your process and produce something that fits into what the market wants while using the sources you have,” she says.

That’s what Alexandria, Virginia-based Building Momentum did. When 3D printers from China became unavailable, Building Momentum, which provides high-tech training to clients, had to figure out how to change the curriculum.

Co-founder and CEO Brad Halsey says there’s an abundant supply of robotics platforms, so his team swapped the two technologies in their training exercise.

“The scarcity of 3D printers has forced us to think of new ways to train by showing how to solve a real-life problem, and then it was a matter of messaging to the client,” he says. 

4. Change with the market's needs.

Building Momentum also brainstormed ways to fill a community need. One result: the idea for a robot that roams buildings to disinfect them with UV light.

Instead of building the robots, the company has been working with local governments on a workforce development initiative to enable others to build them and employ people displaced by closures.

“Think about not just the primary effects but also the secondary and tertiary effects, and how your company could provide resources based on something it does well,” Halsey says. “Tease out a problem and think about the effects, even if they’re minor.”

This approach worked for Gari J. Weilbacher, decluttering and life coach who owns DeClutter to DeLight in Philadelphia. While she typically goes to the clients’ homes, recently she introduced virtual sessions via videoconference.

Figure out if you can tweak your process and produce something that fits into what the market wants while using the sources you have.

—Nada R. Sanders, distinguished professor of supply chain management, D’Amore-McKim School of Business at Northeastern University

After hosting successful virtual sessions, Weilbacher realized this could be valuable for people suddenly working from home.

“Virtual decluttering can help clients who want to set up smart work areas at home and become productive in a new environment,” she says. “It fulfills a very specific need as a result of the coronavirus—and as a business person, it helps me with cash flow.”

5. Seek financial relief.

Find out if you can get financial help as new programs are available. Some examples

• In Seattle, Amazon created a $5 million relief fund for local small businesses.
• New York City will provide zero-interest loans to affected small businesses and grants to those with fewer than five employees.
• States such as Washington are issuing emergency rules changing unemployment requirements for workers whose hours are temporarily eliminated or reduced due to mandatory business closures. 

 Crouch anticipates the summer season will be impacted so strongly that ATXcursions will need to explore emergency financing options.

“Our business is healthy otherwise and we predict strong performance in the next several years,” Crouch says.

He adds that from his previous years as a technology consultant, he’s learned to ask for more than the estimated need.

“You can always pay your loan down faster if you happen to have more cash,” he says.

6. Put the downtime to use.

During unprecedented times, it’s difficult for small-business owners to act beyond survival. But, Halsey says, the advice he tries to give himself is: Breathe and think.

Business owners don’t often have downtime, which is necessary for creative thinking and strategic planning. He says this is a good time to “de-focus"—instead of looking through the microscope (how to meet revenues), look into the telescope (what does 2023 or 2025 look like?). Think about what it's going to take to fulfill that plan — perhaps a new skill set — and use the downtime to learn it.

“You can’t do much about next month in many cases, so take a breath and think about what you can affect, which is 2023.”

Photo: Getty Images