As an admirer of frameworks and processes, the COVID-19 pandemic has been an opportunity for me to explore a variety of these in working through how we respond as individuals, families and businesses to the crisis.
As is the case with many crisis management frameworks, phases are generally split into pre-crisis, crisis and post-crisis, with the emphasis often in the backend on being opportunistic and challenging business owners to look to exploit the crisis in finding opportunities that provide both the business and the family the means to rise out of it in the best possible way.
KPMG’s Global Recovery Framework of Reaction – Resilience – Recovery and New Reality is no different and in many of the conversations I am having with colleagues, business families, and friends around the world, while we are all at different stages, overall we have seen many move through Reaction and Resilience over the past few months.
The Reaction and ensuing Resilience addressed many of the immediate needs of businesses and some of the common questions and challenges that have come up can be grouped into financial, operational and commercial resilience, covering issues of cash flow management, financial scenario planning, workforce and supply chain management, technology adoption and protection, customer engagement and lastly, business strategy going forward. The recently published KPMG UK’s COVID-19: A guide to maintaining Enterprise Resilience (PDF 4.2 MB) covers these factors in great depth.
It is this final challenge of the business strategy going forward that is the bridge into the Recovery and New Reality phases where we move to a longer-term and more future-focused discussion on COVID-19. With various governments releasing their macro level plans for the return to the New Reality, now is the opportune time for businesses to do the same and capitalize on potential first mover advantage.
Business families and entrepreneurs are well placed to lean into this challenge, due to their focus on long-term thinking, patient capital mindset, and agile decision-making frameworks. These characteristics enable a transformational agenda across their businesses; the acceleration of digital transformation and focused responsiveness to customers, actions that will determine the speed and success at which businesses can move out of Recovery and into the New Reality.
Whether you are looking at the business strategy or family governance framework (a topic that I will address in a future blog), the mindset applied in either case is similar, where you have a historical norm, a current state which looks very different, and a currently undefined future state. Of the eight outcomes that can be generated from the below flowchart depicting this scenario, there are a few that I would like to call out in particular.