But it is very light and is effectively asking everyone to be sensible and pragmatic about contractual commitments. The UK Government has issued some guidance on contractual commitments in this time of crisis. “Follow-the-sun” support centres have suffered when different countries are at the height of infections. Your customer may now want added contractual assurances if the pandemic continues and spikes – assurances that your business model is fit for new world.Your way of operating may have to significantly change inorder to meet the needs of the market.They may equally be trying to conserve cashflow to survive. Your customers may be asking for payment holidays or to be released from certain commitments.You may not be able to hold existing contractual commitments with your customers or suppliers.Everyone will have to go through a cycle or review and renegotiate inorder to adapt – otherwise you bring over only the legacy from the old world.Įxamples of some of the key things that may change in the new world :. Looking at your existing agreements with suppliers and customers is critical. So reviewing, adapting and evolving the business model your organisation has is key. You may find when that new season arrives that no-one wants to work the way you have always worked. The harsh reality is that we don’t know how long winter will be, and if there ever will be a spring. You know when spring will arrive and you know there will be an abundance of plenty then. If you hibernate – you have made plans and built up fat reserves to survive the winter. Some commentators have called furlough as helping to put organisations into hibernation – but this is not correct. Your staffing costs being secured by the government is only ever for a short and finite period of time – so you do not spend cash out of your business whilst revenues are not coming in. The furlough of staff or trimming exec pay is very much a self defence mechanism and is a very short “fight or flight” reaction. Burning your existing cash pile to survive is not adapting. This is very much a dinosaur meets meteor moment – even the largest, sharpest, pointiest of teeth did not survive that!ĭoing nothing and “wait and see” is not wise. The companies that will survive going forward are not necessarily the largest, or the ones with the deepest pockets or even those that are perceived to be at the cutting edge of technology and innovation.Ĭompanies that adapt quickly and look at their current situation as economies slowly reopen – and assess how they should change - will be the ones that flourish going forward. ![]() No one knows where exactly the crash barriers are, if any. No one knows what the final direction will be. ![]() A very sudden, unplanned change in direction, with lots of screeching and burning rubber. The world is going through a “hand break turn” at high speed, on bumpy roads its never seen before. Neither are we entering a “market transition”, a common term used in innumerable executive briefings. The traditional economic rules of demand and supply now only seem to apply to toilet rolls and hand sanitiser. The bottom line is that the economy and the behaviour within it is significantly different from what it ever was before. Other countries across the globe are also suffering, with Germany and Japan formally announcing they are in recession this week, with record unemployment now in the US.īut what does this mean for organisations? What about the business you are trying to run right now? ![]() The UK's Chancellor of the Exchequer, Rishi Sunak, admitted last week in an interview with the BBC that the UK is "very likely" in the middle of a significant recession.įigures show that the UK economy shrank by 2% in the first quarter of the year - the sharpest contraction in more than a decade. Where do companies go now in the "New Normal"?
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