Covid 19 has thrown up incredible challenges for all boards. These include, going concern issues, survival, future financing, managing a workforce from afar and being market relevant.
Assuming the organisation can make it through COVID, one of the key questions to be addressed by the Board, will be assess if the organisation has sustainable business model and if not what to do about it. For some there may not be one.
Business models will be influenced by such factors as: leadership and the level of innovative at board and CEO level, how quickly organisations can move to online, lowering the breakeven point so they can make money at 50% capacity, the internal skills to enable the transition, how fast the competition are responding etc.
The organisations will need to consider their future business models are those related to education, tourism, entertainment, hospitality, sports, fintech, retail and restaurants.
It’s hard to know what will the future will look like.
“Most C.E.O.s today believe that until there is a more effective treatment or a vaccine, that work and life are not going to go back to normal,” said Julie Sweet, chief executive of Accenture.
The time to figure out the future will depend on the strength of an organisations balance sheet. However even large companies will have a limited timeframe in which to act
So what does all mean for boards? Well this is a leadership moment which must come from the Board to take control of an organisation’s destiny. Time will be of the essence. I don’t think organisations have the luxury of spending 4-6 months on developing a plan. They must figure out a way of doing it faster or be overtaken by events.
So this is what your board should do.
- Initiate a strategic review of the business.
- Assess if the current strategy is fit for purpose and seek evidence that it is from the market
- If not initiate the development of a potential new strategy that is sustainable in the current and post COVID climate. Bear in mind that no one knows what the future will look like. So organisations will need to consider various scenarios in their strategic planning and evolving a model that will work
- If there is no future for the business the Board must look at ways to limit diminution in shareholder value by seeking opportunities to sell all or parts of the business, merge with a complementary partner or wind up.
- Assuming that a sustainable business model emerges from the process, then the Board needs to carry out an evaluation of the skills and competencies of the board in the context of the new strategy to see what new skills will be required and those skills and experience that are no longer relevant
- Initiate the search for these new skills recognising that the skills needed in the online world will be in demand.
- Induct these new directors and get cracking!