This pandemic has turned the world upside down for us all in so many ways. The loss of life has been nothing short of a disaster – some of our most valued and most vulnerable are at risk.
And at a time where we need each other’s support so much, we find that we are cut off from our wider support networks (at least in the traditional way we might have sought support).
While I am sure we would all prefer not to be going through what we are, there are certainly some positives that have come out of it. You have to admit that the generosity of spirit that most people are showing at a time where there is so much risk is really inspiring. We have also all discovered the benefit of technology and the ways in which we can implement it into our day to day lives to make this process a little easier (and maybe continue to make things easier after the lock down ends). We have also rediscovered the value of staying in touch – talking certainly helps me process the challenges that I am experiencing.
As a business owner, one of the hardest things to cope with is the lack of certainty about what is going to come next. And without that certainty, there is a challenge to plan. It feels like so much of our future is outside our own control right now. Even if we are careful in what we do, others may not be. At the same time being financially careful can create its own problems for the economy.
It's hard to know how to plan when we don’t have a true idea of what the new normal is. In NZ right now, we are in lock down and we are coming to terms with what this means. But what we don’t know is how long different alert levels will remain in place. When alert levels do change we don’t know whether we will all change at the same time and whether some parts of NZ might have to revert to higher levels from time to time as part of continuing to manage this risk. Then we don’t know what is going to happen in the rest of the world. We only have to look at the threat that is being presented to Singapore right now to see that a country that has been so careful and quick to manage the virus can still see a resurgence of it.
With all of this as background, how do we manage our businesses for the future? Well, the good news is that at the core of a good business is good relationships (whether with a business’ own team, its stake holders, its customers or its suppliers.) And managing those relationships should be easier as everyone understands how precarious things are right now. Everyone understands that it is not just important for their business to survive but for as many other businesses as possible to survive.
In forming relationships, we have done so with a set of assumptions. Some of these are expressed in the contracts that record the relationship and some are just implied.
As we move forward we can’t predict the future but we should be aware of the basis on which our relationships have been built, what is important to us, what is important to the other parties in our relationship and how those things might have changed as a result of this global disaster. We may have contractual rights that we can enforce (or other levers to pull) but we need to test whether doing so in this time and environment is the smartest thing to do. We may be in a position where we can insist on a payment or a performance but if that comes at the expense of the survival of our partner is that the smart move?
There is no one answer to how to approach these discussions. What is appropriate for one relationship may not be appropriate for another. In one case we may be able to afford to give a supplier some grace on service levels whereas in another we may not. Consider the difference between service levels in your cleaning contract and the service levels for the maintenance of your production line (machinery that could cause injury if not properly maintained). But then the tolerance you have for your cleaning if you are an office versus a sterile lab may be markedly different.
Over the next couple of weeks we will prepare and share a series of discussion documents and checklists of standard business relationships and the underlying assumptions that may need to be tested at this time (and over the next period of time) as we come out of lock down, as we or partners dip in and out of differing levels of virus management and as we engage with the rest of the world.
We propose to cover the following relationships:
- Supply & distribution
- Confidentiality, Privacy and Data Processing
- Licensing of IP or Technology
- Services (whether contractor, support or outsourcing)
- Shareholder Arrangements
We appreciate that this list may not be all that you are likely to deal with and so we would welcome any input from you on other relationships you would like us to consider. As we post our discussion documents and lists; we would also welcome your thoughts, observations and additions.
What we are discovering is that no one has all of the answers to the problems that we are experiencing - but by working together, we have a much better chance of overcoming them.
We look forward to hearing from you and to catching up with you when we get out the other side of this.
Stay well and stay safe.