And for the aftermath?
Times of crisis set very high demands for your company’s competitiveness. More than ever before, it is important that your core processes are executable, stable and capable, to ensure happy customers and employees while achieving optimal profit and cashflow.
The crisis is the same for everyone but hits everybody differently.
Many companies are losing revenue and others are even forced to shut down for a period. Employees with valuable knowledge have been sent home, making it harder to take care of the remaining customers. At the same time, severe cash flow problems are appearing when fixed costs are still the same regardless of the turnover. And during all this, adapting the business to the new normal is a big challenge.
Other companies have suddenly gotten very busy. For example, the barriers to e-commerce have never been less and the grocery industry benefits from restaurants and cafes being closed for customers. It presents challenges in terms of scalability and efficiency. Are the supply chains secure? How do you ensure that you can deliver the right quality at the right time, when you are staffed with temps, and maybe have extra high sick leaves due to the corona virus?
Common to all companies is that there is a risk of losing experienced employees with valuable experience and knowledge. Many companies haven’t updated the job descriptions of how they do things. Customers do not lower their demands, and if you try to excuse yourself with the corona-crisis, you will risk the loss of customers.
And what about after the crisis?
The demands to the company will continue to increase a long time after the crisis, with a weakened economy and a “New Normal”. We saw this after the financial crisis in 2008, where we had a long period of lower private consumption, and less willingness from the banks to finance corporate initiatives.
The corona crisis is different from the financial crisis in many ways. We don’t experience the same structural problems in the financial sector this time. On the other hand, we are experiencing far greater increases in unemployment and a severe strain on national finances. The bill for all of this must be paid at some point! For sure, private consumption will be lower for a long time to come.
Who will come out as winners?
The companies that can call themselves winners from this scenario are companies with capable and stable processes, that have a good understanding of their customers and can execute their processes effectively.
The fact that a process is capable and stable enables it to deliver within the demands of the customers – every time. Without unnecessary variation and defects. It is in control and you know what input parameters you need to adjust, and exactly how much, to optimize the product or service. You know your tools, your workplace and your SOPs.
Good understanding of the customers is crucial. How else will you know their requirements and needs? All processes must be based on the customer’s needs, so you know exactly what creates value for the customer. Then you can cut off everything needless and in return add what the customer will pay for. In times of crisis, customer behavior and needs change, and listening to one’s voice of customer is extremely important.
If you know value for your customer “why”, and your processes “how”, you will be able to execute. You can quickly adapt and introduce new tasks to others. It makes no sense delivering flowers for the wedding day a day to late.
The tools in Lean Six Sigma can help achieve all this. See how we can help you in times of crisis and in the aftermath.