Reevaluate your business every 6 to 12 months. First take external factors into account, like trends and market conditions. Next, reevaluate your corporate strategies by assessing your existing business plan and aligning with these external factors. Evaluate processes in key departments like HR, IT, marketing, procurement, finance, and leadership.
Your business has likely gone through some major transitions in 2020. But even without a pandemic, companies regularly are impacted by change, whether it comes internally, as with growth, or externally through things like shifting market conditions. Whether or not change is expected, there is a beneficial way to approach new challenges.
The best way to ensure your business is secure during seasons of change is to regularly reevaluate your business operations. This can help you face and adapt strategically to both internal and external factors that impact your firm, allowing you more flexibility while keeping the best interests of all stakeholders in mind.
Taking Stock of External Factors
Start by assessing external factors that affect your business. Pandemic lockdown measures and regulations are the most obvious example. To cope with these, your firm had to make changes that ensured both safety and compliance with government mandates.
It’s also important to evaluate which of these measures should be made permanent. Most companies temporarily allowed staff to work remotely during the pandemic. However, many of the Fortune 500 companies, such as Facebook and Microsoft, are shifting employees to permanent remote work as it improves productivity and reduces turnover.
There are several other strategic drivers impacted by a post-pandemic business climate. Today, businesses are creating platforms that allow people to offer value, rather than simply providing a product in demand. Consider that Airbnb offers a way for everyday people to rent out their homes for travellers instead of owning a chain of properties for rent. This “shift” in corporate valuation can affect the success of your business as well.
Another important external factor to consider is the current market condition, which can be impacted by several conditions. These include changes in political leadership, trade policies, economic factors, legislation and government ordinances, and even social or cultural shifts. This impacts your business sustainability.
In the past, business sustainability only referred to long-term growth as a profit but today, it’s important to ensure that your business makes a positive impact on local and global communities, as well as on the environment. One example of this is environmental, social, and governance business criteria, also known as ESG.
Market Business News defines ESG as “a subset of non-financial performance indicators which include ethical, sustainable and corporate governance issues such as making sure there are systems in place to ensure accountability and managing the corporation’s carbon footprint.” A recent study from McKinsey shows that the better your ESG ratings, the better your debt-to-equity ratio as well as public brand reputation. Today, investors consider ESG an important driver and your company should integrate these strategies into your brand.
Reevaluating Your Business Strategy
Once you have a firm grip on the market and other external factors, you should begin to look internally to reevaluate your current business strategy including goals, growth, and sustainability. How do you begin? Start by breaking down the areas you need to evaluate.
Review Your Current Business Plan
Even if you think your business plan currently addresses all these changes, you might want to revisit it to ensure that everything is in line to achieve sustainable growth. Have you evaluated the impact of ESG on marketing? Are you resuming in-person workplace standards or keeping staff on permanent remote? Are there areas of weakness that you can improve upon, or newly discovered business strengths that can move your company forward?
It’s important to not only understand the concepts impacting today’s markets but to create a plan to achieve them. Many corporate leaders know that sustainability is important in business but only a little more than half have created a plan addressing the issue and only a quarter understand that it can impact competitiveness. Don’t let your company get left behind in this area.
The next critical step is reevaluating your essential business processes to ensure that your company is functioning optimally. To do that, you must map out key areas to investigate and the staff members involved.
Evaluating Key Processes and Departments in Your Business
There are several areas that you can review in your company to make sure your business reevaluation plans are on target. Naturally, this means working with the appropriate departments to ensure a smooth transition for permanent changes in practices, retooling your business plan, and any other pivots or transitions you are undertaking. Here are the key departments to review.
It’s critical to work with the people who manage your staff to keep employees apprised of updates, changes in policy, business goals, and more. If you are integrating ESG for the first time, making remote work options permanent, changing social media policies, or implementing any other adaptations that directly impact the day-to-day requirements of your team, your HR team must be engaged in managing these communications.
To that end, you should review and update your existing employee handbooks and templates. Employees must be aware of and understand changing workplace policies so it’s wise to send out communications highlighting changes and new requirements. Once you have updated and sent out your employee handbook, request your staff to acknowledge and initial that they have received and read the new guidelines.
Information Technology Department
Your IT staff is an important department when changing your business plan. As your company grows, so will your needs for data storage, bandwidth, and cybersecurity as well as hardware and software. This is even more critical if you have remote team members and employ cloud services for your data.
Make sure that your technology is up to date, particularly security services like antivirus software. Discuss potential safety breaches with your IT team to create standards and rules that govern your employees’ use of tech to prevent mishaps. For example, storing corporate, and even personal, credit card data online can put your business at risk. Providing employees with a simple list of technology dos and don’ts can protect your company’s security.
Marketing and Communications Operations
Revamping your business plan may help put you at ease, but periods of change and transition may be difficult for your investors, your customers, or your team. This is a crucial period for working with your marketing and communications department to ensure that everyone is on the same page and that these changes are nothing to fear.
If the thought of communicating major business policies makes you uneasy, remember that you have already weathered the challenges of a global pandemic. The lessons you learned from communicating during the crisis will be invaluable now. Remember to remain calm and clear, and be consistent with your messaging.
The most important rule of corporate communications is to treat all your stakeholders equally. That goes beyond employees and customers to external audiences, potential partners, and possibly even the government. Keeping solid, professional, decisive communications top of mind will elevate your company’s brand by building professionalism and trust.
Your procurement department likely had many challenges in 2020 that perhaps led to unexpected challenges or expenses. Reevaluating your procurement process can help your business function more optimally, saving you time and money. It can also help promote a better quality customer experience.
Lay out your current procurement procedures and examine if there are weaknesses. If your supply chain was a problem during the pandemic, now is a good time to address what went wrong and take steps to prevent future problems. You may want to reevaluate your current vendors as well, with the understanding that some things may have been beyond their ability to fix.
As mentioned, ESG and societal or cultural values are just as important to today’s business models as traditional finances like investment and expenditures. That said, finance and accounting departments often face challenges that may prevent your company from being cost-effective. This is especially true if you implemented temporary measures during the pandemic that have now gone away – or became permanent.
Take the time to review balance reports, collections, and out-of-the-ordinary transactions in your finance department. You may need to revisit and readjust priorities if high-ticket expenses are now part of your budget, such as the costly post-COVID cleaning requirements. These items may require you to juggle your future cash flow requirements.
As your firm grows and as the marketplace changes, you may need to add more staff to properly manage and guide your company through these changes. While legality and compliance are critical, it’s important to hire leaders that are experienced in successful corporate transitions. Ensure that any new executives are a good fit for your corporate culture as well as being bold and honest about changes you are making.
How Often You Should Reevaluate Your Company
There is no hard and fast rule on how often you should reevaluate your business operations, but a timeframe of every six to twelve months is a good rule of thumb. Of course, reevaluations are necessary after a major change as well. For example, revisit post-pandemic measures to see which will remain in place permanently and which will be phased out.
That said, the impetus for a reevaluation might be as simple as a gut check that things are not going as well as you’d like. Business sustainability and improvement require reevaluation. Taking a good, hard look at how things might flow better can build your company into a brand that is reputable, trustworthy, and has a positive impact on the world.