29 May What business skills are needed to survive in a post-COVID 19 world?
What business skills are needed to survive in a post-COVID 19 world?
In what is an uncertain and challenging time for many businesses, Associate Professor in accounting at the University of Melbourne, Brad Potter sheds light on how we can survive – and even thrive – despite the downturn.
The health, social and economic impact of COVID-19 is unparalleled. While the full economic consequences are still unclear, the effects of the virus and the measures taken to contain it are precipitating significant change across industries and seeing Australia enter a deep recession.
As well as border closures, various forms of lockdowns and restrictions on how people live and work impacting the access businesses have to revenue – which include the impact of disrupted global supply chains through drastically reduced opening hours – a decrease in consumer confidence is also taking a major toll on revenue. In early August, consumer confidence dropped to 86.5, according to ANZ-Roy Morgan.
As Associate Professor in accounting at the University of Melbourne, Brad Potter says, “a key component of the economic impact of COVID-19 is that most people are a little bit less certain about what the future may hold. When you’re less certain about property values, whether or not you’ll achieve your wealth goals, if you’ll have a job, you’re less likely to take investment risks, less likely to spend on things you don’t necessarily need.”
Of course, less revenue for business leads to less employment, greater uncertainty and thus a vicious cycle. Many businesses then start thinking about how to cut costs. But while this may help with immediate impacts – which may be more, or less, challenging to address depending on whether those businesses have fixed and/or variable costs – the business and economic effects of the pandemic are longer term.
Eased restrictions will likely provide a small economic boost, but as former senior Treasury official Greg Smith says, “Constraints on the movement of people, which could continue for some years, may, in turn, change the course of Australia’s growth pattern and industry structure” (Hutchens, 2020).
Tax reforms, the review of economic policies, industrial relations reform and regulatory reforms will be necessary to “reduce the cost burden on businesses”, as Treasurer Josh Frydenberg has said. But surviving in a changed environment also lies with businesses and the individuals who work in them. The ability to adapt, says Associate Professor Potter, is key.
“When you’re facing the prospect of a significant fall in revenue, you can seek to reduce your cost, but there is also often an also opportunity to explore different ways of generating revenue.”
So how do you become agile? What skills are needed to survive – or even thrive – in a post-coronavirus world? Particularly when so much is uncertain.
Information is power
Associate Professor Potter says having sound broad based information about the nature and operation of your business, and an ability to bring multi-disciplinary thinking are key. “It’s not an accounting problem. It’s not an economics problem. It’s not a management problem. It’s all of that.”
“When businesses are trying to survive in a constrained environment, as they are under COVID-19, it means finding new ways to pursue their business goals.”
“Whether you want to produce another good or operate in a different way, adapting to a new environment requires an understanding of your situation and the ability to make informed decisions. And in order to make informed decisions, you need to have good information at your disposal.”
This allows you to gauge the likely implications of pursuing different lines and the likely costs of not adapting. In a simple example, many companies have moved their activities online. But that required information about what resources were needed to do so and how those resources could be best utilised for an effective outcome. This includes, for example, carefully re-thinking costs, likely revenue streams and opportunities and core business notions such as risk.
These are challenging issues to confront, requiring broad based multi-disciplinary information and an ability to utilise that information in decisions. “Those that were able to do so and develop and leverage their online presence are going really well.”
In the Graduate Certificate in Business, information is the key theme that runs across all subjects. In providing a grounding in a range of business disciplines including accounting analysis to the economics of markets – the link to decisions is always present, says Associate Professor Potter, the Director of the Program.
“We seek to equip students with foundational knowledge in these fields and empower them to link that knowledge to a range of different scenarios, so they develop their capacity to apply multidisciplinary information to making a range of decisions.
“We want to develop an enhanced capacity to think about complex business problems in innovative ways, but in ways that are also underpinned multi-disciplinary perspectives and robust data.”
As well as business owners, the capabilities developed within the certificate are crucial for any role in the workplace, says Associate Professor Potter.
“We all make decisions, and we can all generate ideas. Your capacity to make better decisions and have an impact is enhanced if you’ve got more knowledge and a greater understanding of how to use it.”
In the current climate – where there is even more scrutiny over decision-making and the deployment of resources – this is even more important.
“Being able to utilise diverse information to inform decisions is invaluable right now,” says Associate Professor Potter. “And it can create real opportunities for individuals and the organisation in which they reside.”