How to prepare for a crisis?

Martin Lonsky
March 31, 2020
English

As events are unfolding every day, an important question for businesses has become: how can we minimize the impact?

In the beginning it’s vital to be aware of all the links in your business so that you can make a risk assessment.

Take, for example, what happens when we consider our suppliers. It's quite risky to rely on only one exclusive supplier. Every activity in your business should have a way of buffering their supply, preferably through at least two (or three) different suppliers. Having only one supplier is very unstable for your business. It is even better to spread your suppliers out geographically so you have suppliers from different locations, meaning that if something happens in one area you can still count on your other suppliers to come through. All of this will, however, have an impact on your margins.

Mapping the suppliers locations is necessary and so is calculating the costs (associated with more expensive suppliers) and adjusting it to the marketing and business strategy. A lot of companies seek cheaper suppliers for lowest prices but they fail to take into consideration their margins. The truly savvy business owner, even in these trying times, is able to sell a more expensive product of a higher quality (for example products with Czech Made label).

Cost-cutting without analysis

The other key aspects are internal processes. In times of crises, the processes are even more important than ever. The natural reaction of companies with decreasing profits is to cut costs. Without the process audits they tend to “tighten their belts”, which can lead to undesirable results. Ineffective and unsystematic cost-cutting can also jeopardize the stability of your company and lead to a long-term economic slump (e.g. firing key employees, terminating a strategic contract, etc.). However, this can successfully prevent process companies that audit and uncover the interior and exterior dependencies. It's never too late for process auditing and so is never too late for revising process and supplier links.

What are the advantages of mapping processes during a crisis?

If you know all your supplier links (for example, using BPMN (ISO/IEC 19510:2013) and you are able to easily and visually conceptualize them, it will be that much easier to detect weak spots. If you limit or totally eliminate those weak spots, it follows that they won't have much of an impact on your business.

Management aimed at creating strategic plans (whether it's offensive, crisis, or defensive) usually require mapped processes and authorities. During crisis preparations, the role of management is to look for the strengths (to be increased) and weaknesses (to be limited). Strengths and weaknesses need to be mapped in detail. This includes what activities have to be carried out and what impact it will have on each department and on the customers.

Create the process maps and a strategy

Start with drawing the processes and create a process database (including the links between them). There are a lot of software solutions for that, including Aputime.com. In advance you can use the services of our professionals.

Once you have identified all the dependencies and competences, you have a very strong tool for creating a strategic plan which will be based on real metrics.

Start now.


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