Author: Tony Rule, Partner at TAG Financial Services
As we enter the final few weeks of the year like no other (for our generation at least), I thought it would be a good idea to reflect on what we have learned during 2020 and what we should take into 2021.
1. We are able to quickly adapt when we need to
The year that was 2020 more than anything else has been about adapting to change. For many of us this involved quickly adjusting to new legislated norms including:
- working from home,
- wearing masks,
- social distancing,
- schooling from home, and
- travel restrictions.
And because we HAD to do it, we were able to do it.
For many businesses, the ability for the team to work from home had long been a pipedream (or nightmare – depending on your perspective), but when working from home was the only option for some – businesses, employees and technology quickly made it work. What would have taken months or years to establish in the past was achieved in days and weeks. And it was not perfect, but 2020 was not about perfection – it was about adapting.
In 2021, let’s make decisions and implement them like our health, safety and business future depends on it. The results you deserve will come.
2. Communicating a clear message to your team is still important
For those of you that decided to communicate and implement an emergency response plan, you probably found that your team appreciated strong leadership through difficult times. And don’t expect that your team will come up to you and say:
“Hey Tony, I really thought you did a good job leading us through the most difficult set of economic, health and social conditions in the last 100 years!”
But if they:
- adapted to new ways of doing things,
- pitched in when they were required to pitch in,
- were accepting of the difficult circumstances that we all faced, and
- were grateful to have a job,
then you can consider that your leadership stood up to the challenge.
Clear communication was always important, but particularly so this year. If you took your communication to new levels in 2020, make a resolution to continue with this in 2021
3. There is more than one way to do business
For many businesses, the lock down should have spelt the end. Many businesses learned to pivot and do things in a new way, including:
- Sit down restaurants became takeaway and delivery restaurants
- Function centres became production studios for reality TV shows
- Walk in shops moved to being online retailers
- Clothing manufacturers became mask manufacturers
- Gin manufacturers became makers of hand sanitizer, and
- Face to face seminars providers moved to online training
These are all situations where business owners have identified an opportunity and have quickly moved their business model to take advantage of that niche. There are less radical examples of changing the way business is done including:
- conducting meetings via Zoom calls,
- providing work electronically rather than printed, and
- working from home rather than in the office.
The key in all these examples is that business was still able to be conducted and in many cases businesses outperformed what they expected to achieve when the pandemic commenced.
Business strategy and the attitude of the business owner continues to be an important driver of business profitability and should not be forgotten in 2021.
4. The rain can come at any time
In a surprisingly small number of days the business environment flicked from prosperous to ominous as the Covid-19 storm clouds rolled in. 2020 was a timely reminder that business owners should be continuously monitoring all aspects of their environment and taking action when action is required.
This potential for variability in business has always been present, but sometimes we can become complacent to the signals (both positive and negative) that are there if we choose to look. There are always threats and opportunities in business and we need to ride those waves or retreat to shore as circumstances dictate.
For many years we have talked about the importance of business owners maintaining a fighting fund to get them through the inevitable tough times when they arrive. In good times that fighting fund can become your opportunity fund – allowing you to cash in on opportunities as they arise. But your fighting fund should never be fully depleted.
A business owner with no cash reserves can be brought to his knees too easily.
5. Business owners and politicians are held to different levels of account
On the whole, I think that governments have done what they can to assist business owners through this very tough year. And certainly, without some of the initiatives that were announced (in particular JobKeeper), our economy would be in a much worse position than it currently finds itself.
One very interesting development during the year was how the Hotel Quarantine Inquiry played out and the inability of senior politicians and bureaucrats to remember how important decisions were made resulting in financial damage to the Victorian economy and the deaths of hundreds of Victorians.
I can’t help but wonder how a company director would have been treated by the judiciary if they took the stand after the death of an employee and said they “could not remember” how important decisions about (say) safety precautions were decided. As a director, the buck stops with you and rather than having to resign, you would be more likely to face jail or be made personally liable for the damages caused.
In 2021, business owners will need to continue to make sure that their assets are protected and that they are complying with their increasing responsibilities as directors. 2020 confirmed that good advice and maintaining the right strategy and attitude are key.
Let’s sign off on 2020 and look forward to a healthy and prosperous new year.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2020. Please do not reproduce without the expressed written consent of the author.