Middle Market: Positioning to Reopen and ReboundApril 16, 2020
It’s no secret that the COVID-19 crisis is negatively impacting business operations for most middle market companies — 86% of them, in fact, according to the National Center for the Middle Market. And 25% of those companies believe COVID-19 will inflict catastrophic damage to their business. Despite this, most companies are confident in their resilience.
Tom Stewart, executive director for the National Center for the Middle Market, shared data and insight on how the virus is impacting middle market enterprises in conversation with AchieveNEXT Managing Director Robyn Pollack and Greg Wood, co-founder and member engagement lead.
What can middle market companies do to help themselves and jump-start the economy?
Stewart explained that companies will respond to the crisis in three stages:
- First aid — Securing continual cash flow from sources like the Payment Protection Program, ensuring safety for customers and employees, and maintaining appropriate outreach and communication to outside parties.
- Improvisation — Making appropriate and timely decisions for your business as the crisis unfolds.
- Envision the future — What can you do to achieve your best-case scenario? Create a strategic vision that includes multiple possible outcomes including worst-case scenarios, and where you want to be.
Consider what projects your company should focus on right now like cost management and transitioning to digital and remote work.
How should businesses handle the fallout?
This process will be extremely difficult for many businesses, acknowledged Stewart. During this time, however, companies have the opportunity to identify weaknesses in their supply chain. Businesses will also realize other weaknesses at this time that are important to learn from moving forward.
Middle market enterprises are better at knowing where they stand today than later on, said Stewart. Though businesses may choose layoffs and furloughs now, human capital teams need to convene to plan for when the company needs those employees back. Employee attraction and development are the biggest factors to middle market growth, he continued.
Instead of focusing on revising the annual budget, businesses should practice continuous financial planning, added Wood. In this unpredictable time, businesses must continuously evolve their financial plan to adapt to this rapidly changing environment.
How can management handle remote work as the new normal?
Remote work is new for many businesses and employees. Some companies may discover that this method could save money in the future and continue to utilize it. As your company navigates working from home, Stewart recommends the following:
- Document everything, especially what is discussed in meetings.
- Assign roles so that everyone knows how to fully participate.
- Learn how to bring people in that are less involved, those silent on conference calls, for example.
- Observe what works well and doesn’t, and let that inform company policy, processes, and procedures for the future.