preparing new zealand businesses for the post …

PREPARING NEW ZEALAND BUSINESSES FOR THE POST COVID-19 WORLD

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TIMES LIKE THESE REQUIRE NEW AND CREATIVE WAYS OF THINKING.

Over the last 15 years, we’ve worked with hundreds of teams to change the way they work, to problem-solve with customers and staff in mind, and promote a rapid response. We’ve written this whitepaper to help you prepare for sustainability and recovery. If you have any questions, comments or would like to know more about how we can help you, please don’t hesitate to reach out.

BRETT HOLLANDGM [email protected]

ANGUS JAMIESONACCOUNT [email protected]

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INTRODUCTIONWe are in unprecedented times of change. The world and our economy are going to look very different post Covid-19.

The way we live while in lockdown will shape how we work, how we get coffee, our grocery shopping habits, our regular shopping, and how we travel.

Managing people’s immediate and wellbeing should be the top priority right now. It is also important that we look ahead to ensure that this wellbeing continues. This report focuses on preparing your organisation for the mid-to-long-term impacts of a post-Covid world.

1. Why we won’t be going back to the status quo2. Shifts and opportunities for business3. What should you be doing now to prepare for the future?

Response horizons

Generally speaking, companies and agencies are operating in one of three response horizons:

ImmediateHow do we care for staff and customers today while we are in crisis response mode?

SustainmentHow do we ensure that our organisation will be effective and able to serve during the lockdown and over the next 6 months?

RecoveryHow do we ensure that our organisation is well-positioned for the needs of the citizens/customers as the pandemic comes to an end and we work on economic recovery in New Zealand?

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SHIFTS AND OPPORTUNITIES• Why we won’t be going back to the status quo• Shifts and opportunities for businesses

Effectively, we are taking part in the world’s most significant A/B test.

New Zealand has chosen test A: lockdown and closed borders. While others have chosen B - no government-mandated lockdown. We don’t know what the future will hold, but there are some things we do know will happen:

We’ll continue to refine our testing

• We may shift to regional lockdowns depending on clusters of cases.• We will have travel restrictions and limited gatherings.• We will work to protect vulnerable groups.• We will enforce strict hygiene requirements.

We will stick to some of our new habits

• People and organisations will discover the benefits of a new way of life which will challenge business and lifestyle norms.

• We’ll see an increased desire for work/life balance.• Equal access to technology will become more pressing.• Healthcare will see dramatic shifts toward digital transformation.

Shocks are still unfolding

• A report by Axios shows that half of the world’s population is on some form of COVID-19 lockdown.

• Unemployment will rise, potentially to or above levels that haven’t been seen since the 1980s.

• Restrictions on travel will remain in place for some time.

The recovery won’t be unlock and complete freedom. There will be a phased approach to returning to normal.

This may mean:

• Having some regions in Level 4 while some may return to Level 3.• We may move back to Level 4 if necessary.• Restrictions will vary depending on what we are seeing in terms of new cases

etc.

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Why we won’t go back to the status quo

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Shifts and opportunities for businessesThe gradual shift we saw towards the future of work will be accelerated with immediate behavioural changes.

ConnectionAs people disconnect from face-to-face interactions, people will feel increasingly isolated and alone. People are seeking connection, familiarity and understanding. Once people have their basic needs met (shelter, food, water), this connection becomes paramount and a driving force for people’s days.

What to expect

• A rise in remote therapy and coaching.• Demand for companionship.• Online social networks are in their element – a considerable increase in the use

of apps like Houseparty, TikTok, Facebook and Twitter have been noted. • More phone calls and video calls. • Event delivery – from the large-scale to the personal – will take on new forms.

We already see this with SXSW’s virtual film festival with Amazon Prime, or people getting married with live streams.

Travel restrictionsTravel and tourism operators have seen one of the most significant industry impacts. While many aren’t able to travel, others who can are also concerned about going somewhere and not being able to get back home or unsure about insurance issues. People want to stay close to home.

What to expect

• A slow return and closed businesses. • Domestic tourism will likely increase as the lockdown is lifted. • Holidays within driving distance will become more common.

Skills shortagesWe have no idea what the impact of so many workers leaving NZ is going to be on these skills. We don’t know if oil rigs can bring in specialists to fix equipment or vineyards can bring in workers to pick grapes.

What to expect

• Skills shortages becoming more and more prevalent as we start to understand the real impact of closing our borders.

• A shortage of people willing and able to do the types of seasonal work that we depend on from backpackers etc (i.e. ski resorts, fruit picking).

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Remote working becoming the new normalWhānau will be working out new ways to balance their needs across work and home within the confines of their house. New challenges such as working close to your partner or parents, or entertaining the kids while on a video call will become the new normal. We are getting to know our co-workers in a whole new way.

What to expect

• Seeing multiple aspects of people’s lives when usually we only see one. • Reduction in office space to save cash. • People will bring in more equipment like advanced audio-visual setups. • People will have dramatic shifts in availability and capacity as balancing

becomes more real. • New policies on working from home. • Remote working wellbeing will become more critical as companies look to fulfil

their obligations under health and safety legislation.

Unemployment riseIt is hard to say what the impacts will be. It is likely they will be worse than the GFC where unemployment rose to 6.7%. This will have huge implications for New Zealand – there will be more conflict and tension, and people will be feeling uncertain and worried about their circumstances.

As Shamubeel Eaqub notes in an RNZ article, in the last recession, job losses were widespread but most painful in retail, manufacturing, construction, hospitality and logistics. Professional services were largely unscathed, and public services grew.2

New Zealand employers do tend to reduce hours rather than cut staff numbers.

Many will be forced to rethink their career, as whole sectors struggle.

What to expect

• Companies reducing hours. • Entrepreneurial mindsets will be rewarded as people look to boost their

household income. • Remote reskilling and training will see a peak.

Remote deliveryMany in the retail and hospitality sectors will need to shift to an online-first model. We aren’t expecting retail and hospitality to go back to the way it was: there is a need to evolve. However, people will still want to buy things and will always need their flat whites.

What to expect

• Retail evolving into digital-first. • Hospitality continuing to look for ways to create experiences that you can’t get

at home, or new ways of delivering their products.• Supply chain management will become paramount – people will be looking

at how multiple companies can supply goods and services at the same time – minimising contact and courier delivery time.

WHAT SHOULD I BE DOING NOW?This section is made up of a series of templates – choose the ones that best suit you and your company’s needs. • Shifting your horizon

• Planning for sustainability and recovery: a template• Agile marketing planning

• Models of recovery• What actions do I need to take planning template

• Setting up for growth

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Shifting your horizonThe wellbeing of your people and your customers is paramount. Mitigating these risks is crucial, from both a people perspective and an operational, P&L perspective. Managing health and safety risks is an ongoing and iterative process which you’ll want to regularly revisit. It’s also essential to start preparing for the next phase. As the world awakens to a drastically different way of life, industries are going to be forced to do things differently. This is an opportunity for fast and decisive players to help people adjust to the new normal and fulfil their new needs.

Things to think aboutWhole company

• Understand the new environment and both the challenges and opportunities it brings.

• Develop a strategy to outperform your competitors.

People and Practice• Take care of your people – they are your greatest resource. • Think carefully about the structure of your company over the next 18 months

–what does a new look economy mean for your people?• Remember that your people have more to deal with in their everyday lives –

how can your company make it easier for people to adjust to the new normal?• What does each step of the path look like?

Problem-solving methodologies• Develop your creative problem-solving skills: generate solutions and maintain

your resilience while acting quickly and decisively.• Opportunities for impact: the ability to spot opportunities to create a positive

impact that will help your business, your community and the planet to recover.• Tangible action points: a list of tangible actions that you can do to move

forward with clarity, confidence and commitment.

Finance• Cash is king, so ensure you know how much you need for the next 6–12

months.• Understand the mid-to-long term impact. • Examine every cost and know what value it is adding to your business.• Deliver a quality service every time to ensure you get repeat sales.• Know your staff’s needs at this time – what do they need to be operating?• What are the challenges they are facing?• Run counterfactuals of your P&L – know what’s coming. • Re-budget and implement cash preservation measures. • Bring operations into the new normal for the next 18–24 months.

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Engagement, marketing, sales• Conduct customer research so that you know what your customers are looking

for. • Invest money wisely – new products will still need marketing. Make sure you’re

planning for lean and agile marketing planning. See our plan for an agile marketing campaign on page 13.

• Ensure clear and consistent comms are going out from your company about what you can offer and how you can help.

• Look for new opportunities wherever you can – can you go to a new territory? Change your audience? Reinvent if required.

• Present alternatives – give people cost-effective reasons to use your services or product. Can you offer a more cost-efficient alternative to what they’re cutting out?

• Help those in need – can you provide services at a discounted price for those who need help? How can you leverage this market?

Product development• Develop new services, products, markets and operating models.

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Immediate

How do we care for staff and customers today while we are in crisis response mode?

Sustainability

How do we ensure that my organisation will be effective and able to serve during the lockdown and over the next 6 months?

Recovery

How do we ensure that our organisations is well-positioned for the needs of the citizens/customers as the pandemic comes to an end and we work on economic recovery in New Zealand?

• Where are you now?

• What’s most important to you?

• What actions are you taking?

• What are you thinking about for the future?

• Where will you be in 4 weeks?




• Where will you be in 12 weeks?




Planning for sustainability and recovery: a template

Activity

1. Determine what horizon you are currently in– what’s important to you right now?

2. What do you need at different points to ensure you are shifting to the next horizon?

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Immediate

How do we care for staff and customers today while we are in crisis response mode?

Sustainability

How do we ensure that my organisation will be effective and able to serve during the lockdown and over the next 6 months?

Recovery

How do we ensure that our organisations is well-positioned for the needs of the citizens/customers as the pandemic comes to an end and we work on economic recovery in New Zealand?

People and practice

Finance

Operations

Engagement and marketing

Planning for sustainability and recovery: a template

Activity

1. What are the specific actions you or members of your team will take during each time period?

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TASK 1

Identify your goals

Spend time understanding what is going on inside the business - what is your business objective, what do people expect from marketing. Look at goals in terms of present status, and where you need to go.

TASK 2

Understand your product/services

Make a list of all the products/services that your company offers.1. Which of these are most relevant in the current operating environment?2. Who are the customer personas that are buying these products/services?

Remember you sell to people - not companies.

TASK 3

Metrics

Determine what metrics you will be measuring over the next 12 weeks. Think about Google analytics, email opens, sales leads etc.

TASK 4

Identify your focus goal

1. What are the top three channels that will drive this activity?2. Create a SMART goal to measure your activity i.e. we will generate 100x sales

qualified leads by the end of 12 weeks. We will do this using Google Ads, LinkedIn and email campaigns with a $5000 budget.

TASK 5

Mind the gap

Where are your gaps in marketing that will make it harder to reach your goal? Is it unclear products? Is it unclear personas? Is it that you don’t have the people? Fix them as best you can. This is also the time to carefully look at your budget - do you have a budget? Are you earmarking money for the right place?

TASK 6

Create campaigns

Use the data that you’ve created (goal, budget, metrics) and create 2 versions of 1 campaign for A/B testing that will run for a week each. You’re aiming to meet the goal, drive results, touch your persona’s pain points and match it to your offering.

TASK 7

Benchmark

Set up some clear benchmarking goals for each campaign. For example:• Campaign A will see 25 visits to the site and 15 signups. • Campaign B will see 50 visits to the site and 10 signups.

TASK 8

A/B Testing

Launch your campaigns! 3. Launch your campaign across the 3 channels you’ve identified. 4. Change only one parameter for A/B testing. This will give your a clear picture

on what’s working and what’s not.

TASK 9

Analyse your assets

Take a look at the content that you’ve already got and see if any of it can be rejigged for your new campaigns. Once this audit is complete, choose 5 pieces of content to rejig and build your content calendar.

TASK 10

Where are you at?

Ideally by this point, your campaign has been running about a week:1. Look at how you are progressing to your goal. 2. What A/B test is performing the best? What is working, what’s not working

TASK 11

Do some more A/B testing

Do some further A/B testing while your initial successful campaign runs in the background.

TASK 12

Watch the results

Collate the results into an easy-to-read document. Write it for who you report to who may not understand the ins and outs of marketing.

Plan for agile marketing campaign

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Models of recoveryEconomists often use recession shapes as a way to describe the different types of recession. While we’re not specifically covering off a recession in this paper, it is a useful model of recovery to use for Covid-19 recovery.

Recession Pandemic

V-shape The economy suffers a sharp but brief period of economic decline with a clearly defined trough, followed by a strong recovery.

Temporary lockdown, effective control of the virus with strong economic stimulus.

U-shape A U-shaped recession is longer than a V-shaped recession and has a less clearly defined trough. GDP may shrink for several quarters, and only slowly return to trend growth.

Lockdown prolonged throughout New Zealand, or in key regions.

Economic packages from the government continue to ease the damage.

L-shape An L-shaped recession or depression occurs when an economy has a severe recession and does not return to trend line growth for many years, if ever.

Failed control, wide-spread closures and unemployment.

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What does this look like?

PositiveGrowth due to increased demand

Potential industry: online shopping

Mild0–15% revenue loss over the next 6 months

Potential industry: FMCG

Severe15–50% loss over the next 6 months

Potential industry: construction

Catastrophic50%+ revenue loss in the next 6 months

Potential industry: tourism/hospitality

V-shape Increase supply to keep up with increased demand.

Survive. Prepare for fast back-to-normal behaviour.

Survive. Prepare for a slow return to normal customer behaviour.

Put large parts of the business on hold. Prepare for re-start.

U-shape Drive towards growth and market share.

Diverge your income streams, protect and/or improve your competitive position.

Use innovation methodologies to help you pivot.

Use innovation methodologies to help you pivot.

L-shape Drive towards growth and market share.

Diverge your income streams, protect and/or improve your competitive position.

Prepare for new competitors. Reshape your offering.

Abandon market.

Activity

1. Decide where you sit on this table. Think about your position in relation to all three recovery shapes – and what the potential impact to you and your business could be.

2. Use the template on the next page to think about the actions you should take.

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What actions do I need to take – positive recovery model

PositiveGrowth due to increased demand

Potential industry: online shopping

Actions to take right now Actions within next 4 weeks Actions within the next 12 weeks

V-shape

U-shape

L-shape

Activity

1. What actions do you need to take right now, in the next four weeks, and within the next 12 weeks to ensure you come through this period of uncertainty?

2. Use the tips on pages 9 and 10 as a starting point if required.

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What actions do I need to take – mild recovery model

Activity



Mild0–15% revenue loss over the next 6 months

Potential industry: FMCG


V-shape

U-shape

L-shape

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What actions do I need to take – severe recovery model

Activity



Severe15–50% loss over the next 6 months

Potential industry: construction


V-shape

U-shape

L-shape

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What actions do I need to take - catastrophic recovery model

Activity



Catastrophic50%+ revenue loss in the next 6 months

Potential industry: tourism/hospitality

Actions to take right now Actions within next 4-weeks Actions within the next 12-weeks

V-shape

U-shape

L-shape

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Setting up for new growthIt may be that in order to survive, your company needs to set up for new growth through new products or services.

Setting up for new growth can be done quickly and efficiently and it’s something that CHQ specialises in.

Assess the impactDevelop the strategy

Act Make it happen

2-hour Executive workshop

Have a guided discussion on how to create impact and how this new world will impact your business.

Growth strategy

How can you succeed in the new economy?

Develop your tactics

What do you need to make this happen? Do you need to redeploy staff? Do you need to create new products or new ways of delivering services?

Sprints

Run sprint teams dedicated to your new products or services.

Impact analysis

Think about how your customers, market, competitors etc will be impacted by Covid-19.

Pivot

Do you need to repurpose your services or products to meet people’s needs?

Launch new ideas

Be willing to experiment and see what customer reception is.

Spend…wisely

Choose what you’re spending money on carefully – the most successful businesses in a slow-down don’t stop marketing activity – they’re careful about how they do it. Likewise, keep growth alive by investing in it.

Book an executive workshop with us to figure out your growth strategy plan.

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WE’RE HERE TO HELPWe’ve worked with hundreds of teams to change the way they work, to problem-solve with customers and staff in mind, and promote rapid response. We’d love to hear from you about your immediate priorities.

BRETT HOLLANDGM [email protected]

ANGUS JAMIESONACCOUNT [email protected]

preparing new zealand businesses for the post …

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