Within 48 hours of COVID-19 lockdown being announced, I know of a boutique clothing company that pivoted their entire organisation to fresh food delivery. And today, almost six months later, they are not just surviving, but thriving, and beating the traditional retailers hands-down, especially on customer service.
How they did this is a masterclass in how every company should be looking for opportunities to take their business into a post-pandemic future. The company immediately accepted that their clothing retail business would not survive an extended lockdown and started figuring out what they could do to protect jobs and grow, despite the pandemic. The founders ignored the company’s historic business, and focused on their organisation’s infrastructure, skills and competitive advantages—this is when the lightbulb moment happened. They realised that small-scale farmers who typically sold their produce to restaurants, hotels and physical farmers’ markets were going to lose their customer-base overnight. But, at the same time, there was going to be an increased demand for fresh fruit and vegetables from customers at home who wanted to restrict their visits to supermarkets. The missing link in bringing the two together was e-commerce operations, brand, a digital marketing machine, and partnerships with small, nimble logistics companies. And this is where the company ticked all the boxes, so overnight transformed from a clothing retailer to fresh food distributor.
A key takeaway is the resilience displayed by the leadership team. Instead of focusing on the negative and what had been lost thanks to the health crisis, they looked to the future, and to the opportunity available to them. This is something every company needs to do right now. If all you are doing is putting out fires and trying to hold on to how things used to be, thinking one day we’ll return to that, you are possibly limiting your ability to get through this disruption. You need to be open to building something new or re-inventing your business and start nurturing green shoots for a world that has fundamentally changed.
And when you’re considering your assets, and how you can redeploy them, don’t forget about your people, especially the millennials and Gen-Zs who are rising through your ranks. Truth be told, and I’m one of the old guard too, they are far more in touch with current trends, and challenges, in the marketplace than we are. I’ve often advised that companies tap into the coalface knowledge of their people when setting budgets in tough times, and this applies to growing through the pandemic as well and listening to inputs from all sides.
A great example of this is a startup in the property sector. As one would expect, their property management and hotel business was hit hard by the lockdown. One of the team came up with the idea that people would want a safe, gym-like environment in which to exercise. The company quickly converted a couple of empty private offices into gym spaces, and a new service was launched. Agility and thinking outside the customer box is key.
What does this have to do with me, the accountant, you’re probably asking now. Surely innovation is for leadership, sales and product, and my job is to keep a tight rein on the purse strings making sure our cashflow is as healthy as possible.
Not entirely. As accountants, we definitely do have responsibility for the purse strings and ensuring business liquidity. However, we are also a temperature gauge for the health of the business and can identify spare capacity, as well as areas of waste and inefficiency, and then put the processes and systems in place that enable the agility the world needs today. We, almost by default, have the opportunity to step into a far more strategic role, both protecting the business from unnecessary risk, but also enabling the business to quickly and responsibly make the changes required for it to remain relevant in today’s world .
And perhaps even directly enable your company or client’s next stage of growth, like a shoe brand, who both diversified and expanded internationally during the pandemic and credit their accountants with much of their success.
In the same way that recessions become self-fulfilling prophecies, with cutbacks driving more cutbacks and shrinkage, this is also true of recoveries, especially given the multiplier effect when you broaden your ecosystem. The harsh truth is what is lost can never be regained, accept it, and grasp the far more exciting challenge of re-focusing on what you do have, and how you can redeploy these assets in new, creative and profitable ways. Plant the seeds, nurture them and watch the green shoots grow.
As published on AccountingWeb - August 2020