May 29, 2020

Business Recovery Plans: The Key to Moving Forward from Coronavirus

Robert E. PozeskyBy Robert E. Pozesky

The coronavirus pandemic has the business community facing the most challenging economic environment in decades. Many owners and executives have had to shift their attention overnight to expense reduction, cash-flow management, headcount reductions, and complex government programs – all while trying to figure out what comes next.

Even those businesses who have not had to shut down or scale back have been dealing with tight supply chains, shortages, physical distancing, and employee health protections while trying to meet customer commitments. Others, such as food manufacturers, distributors, trucking, and certain health care sectors, have seen big spikes in workload.

Business adviser with clients discussing recovery planRegardless of where an organization finds itself, a different kind of future is coming, and companies need to be ready. Leadership teams must invest the time and energy now to create a corporate plan that guides recovery and emergence from the coronavirus crisis. The following pointers can serve as a guide to developing and executing a recovery plan.

Organizational and Performance Benefits of a Recovery Plan

  • A well-thought-out and clearly communicated directive allows people to see the light at the end of the tunnel and provides a level of comfort and security for employees.
  • A plan gives context for decisions rather than forcing teams to come up with their own playbooks on the fly.
  • The fast pace for making significant decisions and taking action is likely to continue, and it is better to make those decisions based on a plan than without a strategy.
  • People will be willing to commit time to developing a plan that builds on the work done while responding to the pandemic shutdown.
  • Having an active plan in place allows an organization to benefit from the recovery and avoid the struggles and missed opportunities too many companies faced in the years after the 2008-2009 recession.
  • Effectively executing a plan to profitably get back to work is the only way some companies will survive.

Key Considerations for a Recovery Plan

  • Accept that the plan will not be perfect or complete.
  • Target to have a plan ready within weeks of reading this.
  • Keep a strategic mindset while identifying short- and medium-term tactical actions.
  • Identify ways in which practices put in place over the past few months can be expanded or modified, such as a deeper analysis on cash flow by doing scenario planning to identify weaknesses and opportunities, a fresh look at the supply chain, adopting zero-based budgeting after the first round of expense reductions, or identifying process and technology improvements that can be accelerated to meet customer demand with a lower staffing complement.
  • Conduct an objective companywide assessment of performance to identify drivers of revenue and cost and underperforming areas.
  • Develop marketing messages and sales plans that align to the plan.

Recovery Plan Execution Tips

  • Communicate and discuss the plan and continue to do so over the upcoming months.
  • Set expectations and hold people accountable to executing the plan.
  • Establish regular check points to ensure forward progress and maintain momentum.
  • Treat the plan as a live document and use feedback on progress and the changing situation to make adjustments as necessary.
  • Don’t forget to celebrate milestones and successes. It’s been a difficult time and everyone can use some wins.

No crisis recovery plan is going to be perfect. There are too many unknowns as we forge a new normal. Do not let lack of perfection be the enemy of the good. In addition to the benefits outlined above, a recovery plan also creates focus and a rallying point that will help your organization and everyone on your team come through the coronavirus with a foundation for shaping the future.

Robert E. Pozesky, leader of RKL LLP’s strategy and operations consulting practice, facilitates planning sessions with owners and leadership teams and helps clients execute on their plans and improve performance. He can be reached at rpozesky@rklcpa.com.

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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.