“The new normal,” “unprecedented uncertainty,” “the great unknown”: there is no shortage of terms to describe today’s business conditions — none of them particularly positive. If 2020 has taught us anything, it’s that nobody (except the Simpsons) can predict what will happen next.
The foggy future ahead begs the question: How quickly can businesses recover from a pandemic with no expiration date? As spikes in outbreaks temper easing restrictions across the states, companies have to now cautiously feel their way through a complicated recovery process.
At Planful, we see businesses moving through three different phases before they can fully recover from the current pandemic. Let’s explore what those phases look like, ways that companies can begin to regroup and recover, and how we found a silver lining in this dark COVID cloud.
The Three Phases of Crisis Recovery
Independent research-based consulting firm Mint Jutras recently released a paper that states that “every successful business started the year with a plan and budget in hand — plans and budgets that were rendered useless amid a global pandemic.”
We couldn’t agree more. Regardless of whether a business has been impacted positively or negatively by COVID-19, the gravity of the situation has blindsided everyone. The road to economic recovery is long, and we believe companies will have to transition through three core phases before they can recover completely.
- The Ambush Phase. The first phase is what we refer to as the “Ambush Phase.” It represents the first few months (or more) after the onset of COVID-19, where the primary focus for businesses is purely crisis management.
- The pandemic surprised everyone, its impact was significant, and we didn’t quite know where the impact was even coming from. Businesses had to assess their individual situations, triage issues quickly, and make fast decisions to protect themselves.
- The Regroup Phase. The “Regroup Phase” is the second stage of the path toward recovery. Some businesses have made it here already, but most have not. This is the point where business leaders are able to make more short- and mid-term decisions based on what they’ve learned about their business throughout the Ambush Phase.
- The Recovery Phase. The Recovery Phase is the third and final stage when business conditions begin to normalize. Outside of select industries, such as technology or eCommerce who’ve experienced uncharacteristically high demand, there aren’t many businesses in the recovery phase. In other words, most businesses today are neither recovering nor thriving.
How Businesses Can Prepare for Recovery
The good news is that even though recovery is a ways off for most companies, we can all prepare for it today. Mint Jutras explains: “As we see early signs of recovery, it will be important to regroup and reset quickly. You must be able to put a new plan and budget together — and the quicker the better, particularly if you’re strapped for cash.”
So, how can companies pull together new plans quickly? Not only that, but how can they do so knowing that these new plans will continue to change over and over again? According to Mint Jutras, the answer lies in implementing a Continuous Planning process:
“…the plan and the budget will simply be a stake in the ground. Because as we emerge from this crisis, we face an unprecedented level of uncertainty. Nobody can accurately predict what our new normal will be. So not only must you formulate a plan quickly, you will also have to course-correct on an ongoing basis more often. For this, you need a continuous planning process.”
The report also sheds light on what many of us know firsthand: that traditional planning is a slow, iterative process that relies heavily on historical data. When nobody knows what the future will bring, businesses simply can’t afford to wait for months-long planning cycles.
As the world slowly recovers and reopens, businesses need to be able to regroup and recover quickly. This requires frequent course-corrections and fluid planning. Leaders need real-time access to data and the ability to evaluate the impact of disruption and how to move forward.
The right technology is a key component to recovery. Mint Jutras research found that just 14% of survey respondents are able to react to change or incorporate new data into their plans consistently. When those teams move their planning process to the cloud, the percentage nearly doubles. What’s more, it found that only a third of all respondents could continuously modify plans headed into 2020. A Continuous Planning process must be built upon a cloud platform where all organizational data, tasks, deliverables, and collaboration exist within one user experience — accessible to finance and business users anytime and from anywhere. As businesses build out their post-COVID recovery plans, these intuitive planning tools and processes become even more critical for long-term success.
The Silver Lining in the COVID Cloud: Our Customers
It’s easy to become consumed by the negative aspects surrounding a global crisis — it’s a crisis, after all. Yet we’d be remiss not to recognize the achievements of our Planful customers during this difficult time period.
Many of our customers have been the first responders inside their businesses throughout the pandemic. When the market took a turn for the worse in late March, every single CEO and CFO turned to their FP&A team for insight on how to adjust and respond.
Time and time again, we watched our customers rise to new, unforeseen challenges. During our recently concluded Planful Tour, Louis Martinez Luna, Senior Financial and Business Analyst at Bose, shared that his team uses what-if analysis and scenario planning capabilities to help the company adjust to their new normal and plan for reopening.
After the Major League Baseball season ended abruptly this year, Boston Red Sox CFO Tim Zue shared: “Now more than ever, we rely on Planful to help us think through multiple scenarios to make the best decisions. We’re using the platform to game our ‘what-if’ scenarios to manage the impact of COVID-19.”
It’s going to be a long time before our lives return to “normal” — and some things may never return to what they once were. During times of great uncertainty, I believe that the strength, resilience, and goodness of who we are as a community will always preside over periods of uncertainty and doubt.
We see that with our Planful customers today and we’re excited to watch them do even more extraordinary things tomorrow.
How can your FP&A platform empower confident and agile financial decision-making? Join us for our weekly interactive Continuous Planning demo and check out what analyst Cindy Jutras is predicting for the future of business.