It seems nearly every brand and business is trying to capitalize on the pent-up consumer demands of post-pandemic life. However, challenges abound. The risk experts of M Booth and Asfalis Advisors, a strategic partner that focuses on business resilience, recently held a brainstorm to discuss how organizations can press the accelerator responsibly and carefully to avoid pitfalls and set up the business for maximum resilience. Read on to see if your company is ready to manage the coming risks. And if you’d like to discuss, please contact JamesD@mbooth.com or VMathews@asfalisadvisors.com.
4 Ramp-up Risk Categories
We believe that most risks faced by businesses today fall into four categories:
1. Top-down risks:
The pandemic prompted some early retirements and executive-level job changes. With those come losses in experience, company history/knowledge, and general leadership. Restoring these capabilities will be key—especially as companies will need a steady hand to help manage through the other three risk categories.
2. Bottom-up risks:
At this stage, many companies are still frantically hiring to balance labor levels enough to satisfy consumer demands. In this economic cycle, typically:
- Hiring standards are relaxed
- References and background checks become more cursory (or don’t happen at all)
- Onboarding, orientation and training gets rushed (impacting culture, values, retention, and costs)
- Employee turnover remains high, due to high supply of alternate employment
Regardless of industry, these unmanaged risks might mean more challenges in maintaining the quality of products and services provided. For retailers, this could equate to more dissatisfied customers. In food service, this could lead to foodborne illness or losses of food quality. In other industries (think: emergency services, hospital sanitation, airline maintenance), these lapses could be catastrophic if companies are not careful in how they manage their labor force.
3. Inside-out risks:
Today’s employees are also holding their leadership teams accountable for how business is done and expect much more out of their employers. They expect flexibility, sensitivity, and some sense of compensation equity. In some cases, employees (Gen X, Millennials, and Gen Z) are pressuring their organizations to stand up for certain causes that may or may not be directly related to the line of business. While it is not clear if the acceleration of these trends are pandemic related, smarter organizations should begin to consider, if not address, these risks as hiring continues to bring capacity back to meet pre-pandemic levels of demand.
4. Outside-in risks:
Businesses cannot assume that existing structures to support society have remained steady. In some areas of the country, law enforcement levels have declined, sometimes dramatically, and the aviation, public health, and healthcare sectors continue to be strained to, or beyond, capacity. Regulatory agencies may be facing similar levels of labor shortages and turnover. Multiple reports suggest that our nation’s cybersecurity experts get busier by the day. Ultimately, brands and businesses would be wise to become as self-reliant as possible on existing and emerging risks.
Managing Ramp-Up Risk
Our bold prediction is that the brands and companies that manage these risks well in the next few months will have significant advantages over their competitors for the next three-plus years. So, how to begin?
Our agencies agree that there are no easy solutions or quick remedies, but we can help clients build a construct that will help build greater resilience. It begins by getting a cross-functional, multidisciplinary team in a room to have a structured discussion. (We’ve helped some clients build issues-management teams using the same concept—these clients can start there.)
At a minimum, this team should include: senior leadership, operations, human resources, legal, regulatory, risk management, and business continuity experts. Once assembled, here are some starter questions that can help get this meeting off the ground:
- Are we lacking any experience or historic context through any losses to our executive ranks? How can we fill those gaps?
- How do we attract the right quality and diversity of labor now to help ensure we avoid headaches later?
- How do we ensure proper onboarding, recurrent training, and appropriate amounts of spot-checks and oversight is in place to make sure our quality and safety standards remain high?
- What feedback vehicles are in place to help employees make recommendations or express their concerns, internally? How can we use this feedback loop to make meaningful changes for job retention, advancement, and satisfaction?
These questions just scratch the surface of what that meeting might cover. We’d be happy to work with you to develop and facilitate this meeting and keep you ahead of the ramp-up threats facing most businesses today.