Risk is an unavoidable part of any managing any business, but no one prepares you for what to do when that risk is unmanageable — such as with the recent COVID-19 pandemic.
The word “unprecedented” was said a lot and while it may have been overused, it was also true. This combination of public health, economic, and social change had never been experienced at this level in our lifetime.
As a result, some businesses sank while others thrived. Some of that was due to luck — for instance, having a product that was in high-demand, like cleaning supplies or toilet paper — but more of it was due to preparation — such as having the technology and processes in place to adapt and scale quickly (such as brands that pivoted to create PPE).
While we deal with the fallout of COVID-19 and potential second wave, businesses must take a hard look at how they responded to the pandemic, and how they can respond moving forward.
There’s a dilemma here, though. On the one hand, we know that being digitally adapted is a great boon for businesses, especially with increased occupational health and safety protocols. As we mentioned, manufacturers and organizations that were already prepared before the pandemic had an easier time scaling during the crisis.
However, what if you weren’t digitally prepared? What if you were in the beginning steps of your digital transformation journey or hadn’t even started yet?
We can talk all day about the benefits of upgrades, process automation, and incorporating more technology into your business, but you may be asking — is now really the time?
If you don’t know what your business will look like next week, next month, or next year, does it make sense to be considering technological investments now? Can you even plan for the future when we have no idea what that future will hold?
The answer to both is yes. But it requires something fundamental: a mindset shift.
Redefining Business Risk
Traditionally, business risk assessment has meant gauging how much inventory you can sell in a certain period. Will you meet your budget forecast and KPIs? Will you be solvent at the end of the year? Will you be able to pay for your investments?
These are important questions — let’s be clear about that. But there is another element of risk that you should also consider.
What are the risks of staying stuck where you are? What are the risks of not changing and not adapting? What are the risks of continuing to do things the same way, when that way is no longer working?
Too often, businesses (and people!) avoid making change because of the fear of the unknown. There might be resistance from staff. There might be questions about return on investment. There might just be the vague feeling of will this really make things any better?
However, the unknown shouldn’t be what stops you from making a needed change. The difference between a fixed and growth mindset is being open to new ideas and willing to change your beliefs and processes.
Balancing Risk and Growth
In an uncertain environment, as we’ve faced recently, growth shouldn’t fall by the wayside (especially when that growth could help your business adapt to the current climate). However, it’s also understandable to have some hesitation and not go charging into a solution without proper forethought.
That said, there are ways to find an equilibrium between the two. Business risk and business growth don’t have to be opposites — they can be partners.
a) Start Small(er)
If you’re considering a technological investment, you don’t need to change your whole business overnight. You won’t go from operating with a full factory staff to lights-out manufacturing in a month.
You can start with one process; solve one problem that will have a big impact.
One example of this is demand-driven material requirements planning (DDMRP). While there is a learning and mindset shift required when you move from traditional MRP to DDMRP, it can often be achieved within your existing ERP and with your existing team while seeing a big return. In an uncertain economy, it can also help you forecast better and find long-term savings, so you don’t have to dispose of unused inventory.
Look for small areas to start that will help you see the greatest rewards.
b) Look for Funding, Grants, and Pilot Programs
Two big concerns with any technology project are:
- How are we going to pay for that? And
- Is this really going to work for our business?
This is the heart of business risk — and both risks can be mitigated.
Funding and grants are one way to resolve the first issue. In southern Ontario, for example, the Canadian Manufacturers & Exporters (CME) association recently released a Technology Assessment Program (TAP) grant of up to $25,000 to help manufacturers find bottlenecks and improve processes.
This is far from the only funding available. We’ve written before about programs that help pay for ERP systems.
In the wake of COVID-19, we may see even more assistance of this kind as provincial, state, and federal governments work to keep manufacturing local, even near-shore existing supply chains. A business transformation partner can help you stay in the know about these opportunities.
There are also programs available for some processes that reduce organizational risk — the second common objection of whether a process works for your business.
Going back to DDMRP, for example, a Demand-Driven Pilot Program allows businesses to test out the process before committing fully to it. Shorter trainings, such as DDBRIX and Demand-Driven Planner courses, can help your team learn more about these processes first.
You don’t have to throw caution to the wind. Instead, you can use that caution to guide your decisions strategically.
c) Seek Out Help
This time may be unprecedented, but you’re not alone. A business transformation consultant can help you make a plan for the changes ahead that works with your budget and your needs.
For instance, at SHEA Global we offer project scopes at a fixed cost and a fixed timeline, so you can prepare ahead for the costs. We can also help you create a strategic timeline and blueprint for change, find funding opportunities, and beyond.
An experienced partner has just that — experience. They will have an understanding of what will work and what challenges might come up for your business and be able to adapt accordingly – including solution selection, implementation, employee buy-in, process automation, and more.
You don’t have to risk your entire company to start making change. And not making any change could be the greatest risk of all.
SHEA Global is your end-to-end business transformation partner. Reach out to us today for a consultation.