For most, this year has been one of steep learning curves, adaptability and a renewed focus on their people. There has also been a good dose of community support and optimism, with South Australia faring well by national and international comparison.
Whatever next year has in store, the lessons of 2020 will stand many in good stead as they prepare to face the winding back of government support and a permanently changed business environment.
This week, three of BDO’s business advisers reflect on the experiences of 2020 and shared their predictions and hopes for 2021.
Reflecting on 2020, what stands out to you? What are your ‘key takeaways’ for business?
Scott Way, Director, Industrial & Organisational Psychology:
It has been a memorable 2020 from many perspectives, with a standout feature being the ability of organisations to adapt to these challenges.
Despite predictions of gloom and doom, most have demonstrated creativity and resilience to adjust so that for the most part they have survived, with some even thriving.
For some organisations, changes to work practices were instituted in a matter of days and although there may have been a financial cost they quickly settled into a ‘new normal’, continuing to service clients, customers and markets.
Perhaps the third ‘takeaway’ has been the quality of leadership shown by business managers and owners. This success came from rapid planning, clear and consistent communication and a healthy balance of empathy towards staff and customers.
Nick Kervin, National Lead and Partner, Digital & Technology Advisory:
In the world of information technology, 2020 was certainly a year of significant change. Many businesses were essentially forced to adopt new ways of working as staff were sent home at the height of the pandemic.
In conversations with Chief Information Officers (CIOs), some reported that COVID-19 helped break down significant change barriers and that talk of ‘digital transformation’ was fast-tracked in a matter of weeks.
Some of our clients who were previously struggling with the adoption of collaboration platforms saw months, if not years, of change happen in mere weeks in order to simply keep functioning.
What we did observe, however, was the creation of some significant ‘technical debt’.
When technology is adopted with urgency, there is a risk that decisions made in the heat of battle will need to be ‘unwound’ at some point.
Eythan Barraclough, Associate Director, Business Services:
Riding the wave of ongoing changes to restrictions and the subsequent impacts to their business has been challenging for many.
Strong financial governance has been integral to managing the impact of restrictions, in particular trading and revenue reductions, workforce management and working capital commitments.
Similarly, businesses have had to have a robust understanding of their financial performance to access government subsidies such as JobKeeper and State Government grants, which have provided essential support to businesses since March.
Many businesses have emerged from this period nimbler and more agile, with employees working from home and clients and customers engaging through virtual means. These will continue to change business models well into the future.
From your interactions with clients this year, how do you feel they and their people fared?
Scott Way: We have conducted several client and staff surveys throughout the year and the results, in addition to the daily contact with businesses we have been working with, suggest that people have held up exceptionally well … given they have just experienced a once in a lifetime event.
Understandably, most have been somewhat unsettled, but they have carried on with their lives, work and social interactions. For a number it has revealed that they can function effectively and productively with flexible working arrangements and for others it has highlighted the ‘pleasure’ they get from going to work and mixing with their colleagues.
The changes brought about by COVID-19 have also revealed to organisations and their people that they don’t need as many face-to-face meetings or travel to meet with clients or colleagues, and that technology can greatly enhance our efficiency.
Nick Kervin: On reflection, it was very pleasing to see almost all of our clients transition to a distributed workforce or working from home arrangement with very little impact to their business operations.
Information Technology was a key enabler for helping soften the blow of our first recession in almost 30 years. If we’d experienced this pandemic 15 to 20 years ago, the ability for businesses to continue to operate would have been significantly harder without the digital tools we take for granted today.
Eythan Barraclough: In South Australia, we have been fortunate that many industries have been able to hold ground throughout COVID-19, with JobKeeper supporting shortfalls in revenue.
Industries such as real estate and retail saw immediate effects in March and April as restrictions impacted trading. Since June, these industries have rebounded favourably with the state re-opening and consumer demand increasing.
With the industries that have been adversely affected by restrictions, in particular hospitality and tourism, businesses continue to require the Federal and State Government support to manage through working capital requirements. They have also faced a renewed financial burden from new short-term restrictions, in particular the recent outbreak in November.
What opportunities do you see for business and organisations in 2021? What should they focus on?
Scott Way: In the lessons of 2020 lie the opportunities for 2021. The ability to rapidly change our ways of working should be remembered when we conduct ‘organisational changes’ in the future. Hopefully, these experiences mean we will be able to adjust to work, staff and client expectations more rapidly.
Effectiveness and efficiency can be enhanced through the greater use of technology and a more purposeful and thoughtful use of time. Communication about future plans and changes can be enhanced by remembering what worked during lockdown periods, namely clear, frequent and personalised messaging underpinned by appropriate empathy for the recipients.
Finally, organisations will be far more sensitive to the health of their staff and customers and therefore conducting more thorough cleaning, staying home when unwell and maintaining physical distancing when necessary.
Nick Kervin: In the year ahead, businesses will need to exploit the adoption of new technology that COVID-19 forced on us in 2020. Based on the significant impact COVID-19 has had on the world, early 2021 is a good time to reassess strategy, objectives and identify how technology can be used to support the refreshed business goals.
Although the economic news can look a bit gloomy, businesses need to hold their nerve and rather than avoiding more investment in IT they should be taking this opportunity to continue transformation.
Eythan Barraclough: Many have used this year to review their business model and with the learnings obtained, ensure that the business is positioned for longer-term sustainability, in particular reviewing fixed costs and margins generated.
With government subsidies winding back, it is important that in early 2021 business owners understand their financial position and have appropriate planning in place to survive beyond JobKeeper and other assistance measures.
The final word, Scott Way:
Although COVID-19 is still here and the impact will be felt for years to come, we should acknowledge the great work done by Australians, South Australians and our respective governments to manage the impact of the virus so well.
When compared to the rest of the world, our willingness to co-operate with health directions, understand the seriousness of the virus and to ‘make do’ in challenging times has been wonderful and in many respects (with our cousins in NZ) it serves as an exemplar to the rest of world.
Business Insight, our weekly look at what’s happening across the SA economy, is brought to you by BDO and will return on 11 January 2021.
Local News Matters
Media diversity is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to guide it forward and you can help with a donation of any size to InDaily. Your contribution goes directly to helping our journalists uncover the facts. Please click below to contribute to InDaily.