It is more than a year, and we are still in this pandemic. Many companies were expecting last year that this pandemic will ease down by the 1st quarter of 2021. Their planning and forecasting are based on that scenario. But look where we are now – the crisis is becoming worst with the new variants.
With the vaccines coming in trickles, the Philippines may still be under this crisis for a longer time – not only in terms of physical health but financial health as well.
But when will this crisis end? How can we plan effectively if we do not know when this pandemic will see its “omega”?
Some people will say that planning will not be effective – it is just a waste of time since you do not know what the future holds anyway. But planning is better than nothing – at least we have a guiding point – no matter how vague it may be at that time. And if possible, our people should be involved in all levels of the organization in planning and brainstorming. Evaluate every idea they have no matter how preposterous or impossible it may be.
It is a matter of creating assumptions and the end state of where you want to be in the future and working backward to determine the steps you have to take to get there. “That aspirational view of yourself then becomes your north star, and you create an emergent strategy to get there, laying out the path you would need to follow—initiatives you would launch, acquisitions you would make, businesses you would shut down or transform—by working backward from your intended end state to the first steps you will take in the here and now” quoting Mark Johnson (source: exceed.economist.com by Terri Williams).
We might be experiencing a slow down now but before you know it the future is here because in a crisis like this the future can happen so fast – and we got to be prepared or we might be caught holding “the empty proverbial bag”. There will be losses especially for those businesses which have been severely affected by the crisis but the game now is how to stay afloat. Recovery is not even to be considered in the near future.
The questions one should ask are – what is my current financial situation, how can I possibly remain afloat with this financial situation, what payments should be prioritized, what loan or other payable agreements can I possibly negotiate further to make it possible for the business to pay?
With regards to remaining afloat – the business should also evaluate what profit/cost centers to maintain and which ones to close given a future scenario where trends might be changing and costs can be difficult to manage in the future.
We can also ask similar questions in our personal lives. What is the state of my financial status today? Do I pay off housing and other loans because of the low-interest rate in deposits which is surpassed by the rates in the lending market? Do I have enough cash to sustain me and my family in case of an emergency crisis or do I have to defer that payment of the loan in full? What are my present resources right now if family finances are affected because of the slowdown in the economy?
This crisis has levelled off the playing field. In other words, rich and poor, small and big companies are all affected although in different ways. When all is said and done we can only forecast and manage the future outcome of our decisions in a limited way.
With this crisis, we can feel helpless but what will carry us through is our strong faith in God Who alone knows what the future holds. Every lesson we learned from this experience will make us wiser if we try to learn as much as we can from it. Hopefully, if we are still there in the future, we can look back that this crisis has brought us to a level higher than where we are before – not only in terms of managing our business but in terms of personal growth.
(Wilma Miranda is a Managing Partner of Inventor, Miranda & Associates, CPAs, and Chair of the Media Affairs Committee of FINEX, Treasurer of Negros Outsourcing Services, Inc., and member of the Board of Directors of KPS Outsourcing, Inc. The views expressed herein do not necessarily reflect the opinion of these institutions.)