Coronavirus, stock exchange losses, countries going in to lockdown, businesses being shut down, stock shortages in the shopping centres.
We live in unprecedented times with the business models of decades’ old organisations quite literally changing overnight.
The radical changes we have seen over the past few weeks have demonstrated the speed at which market dynamics can change, and the need for businesses to respond quickly.
Boards and management teams are needing to respond with urgency to scenario plan and make decisions with imperfect information as the situation unfolds.
The markets that we operate in and the customers we serve are always changing. Whilst the speed of change is not necessarily what we have seen recently, now is a time not just to focus on the immediate crisis at hand, but to think about how to structure management and board meetings so that market changes form part of the regular and ongoing conversation.
From our experience, we observe that management reports typically fall into one of three different categories:
- Activities completed or in progress in the week or month.
- Business KPIs which are typically backward-looking and reviewed to ensure the business metrics are on track, trends can be identified and corrective actions put into place. e.g. finance, HR, work health safety.
- Progress against the strategy which is often a table that lists out the: goals/objectives, comments on the status against them and an indicator (e.g. traffic light).
As part of aspiring to best practice, any discussion of the strategic plan and, in this case, progress against the strategy, is worth including an item to identify and (as required) discuss any changes to the market conditions.
The review of market changes can often be addressed simply with a few bullet points and identifies by exception, any material changes in the market environment since the last report. It is important to identify both what is going on in the external environment and the potential impact on the business.
Sometimes, where a significant change is occurring or has occurred, it might be appropriate to include a white paper or an article talking about the change, or set up a special meeting to consider those changes. A major technology change; action such as a significant merger or acquisition by a supplier, customer or competitor; or change in government/stakeholder funding might lead you to establish a separate meeting of the Board or a sub-committee like risk/finance.
Within the disability sector, we have seen changes every few weeks or months that impact on organisations. Changes to the NDIS price guide, the Royal Commission and new quality and safeguarding requirements are just a few recent examples.
Making a report on market conditions a regular part of the board reporting template can help to keep the Board and management team coming back to the important strategic matters, and not to just be stuck in the operational issues.
Next month we will share more about some tools that can be used to analyse and better understand your market.
If you’d like any assistance with reviewing your market environment, please contact Andrew for an initial obligation free consultation.