Post COVID-19, Sweating the Assets

Without a shadow of doubt COVID-19 has been the most devastating circumstance to hit the global business environment since The Great Depression which began in the USA on 4^th September 1929 with a sudden dramatic fall in stock prices and subsequently led to the Wall Street stock-market crash of 29^th October 1929 (Black Tuesday). Depending on who’s commentary you believe, the austerity caused by The Great Depression lasted up to the beginning of World War II, some ten years later, and drove down world GDP by an estimated 15%. By contrast, COVID-19 has been with us now for only six months and is widely being forecast¹ to drive down the GDP of some major industrialised nations² by almost the same percentage in 2020 alone. The ongoing effects will be felt for some years to come with uncertainty in the financial markets making access to capital increasingly difficult for businesses attempting to emerge from under the cloud of COVID-19 and return to full trading status.

Having been in lockdown since around 23^rd March 2020 businesses are now looking to resume trading. As they do so, they will find the marketplace of the “new normal” a very different, more complicated, and much more competitive space than when they left it some months ago. This necessitates a rapid revision of their strategy, customers and suppliers, operating model and a fundamental review of their own assets in order to restructure them to address the new market conditions and ensure they are maximising the performance of their own working capital.

So, given the already complex nature of restarting operations from a lockdown situation how can businesses simultaneously undertake the necessary review of their strategy, operations and assets to guarantee future trading success where the overriding theme is clearly doing more with less?

“But like Machiavelli tells us, you must use the assets and resources at your disposal. Use them all, and use them to maximum effect.”

—Austin Scott Collins

Here at Centigo, we have 300+ consultants who are highly qualified, well trained and deeply experienced across a wide range of industries that can be deployed rapidly to help you put your business back to work in a safe, structured and compliant manner. Members of our team have successfully helped many businesses, large and small, through this kind of process before and can bring to the table well tried and tested approaches that can be tailored to meet your specific needs.  We can help you: -

At the strategic level:

• Analyse and understand your changed market environment.
• Test and re-baseline your strategy for fit, form and function against the requirements of the “new normal”
• Measure your fitness for the journey to success using our think/build/operate/sustain business model evaluation and creation toolkit.
• Understand the strategy, people, process, digital and technology enablers you can leverage to gain competitive advantage and address your changed needs and the needs of your customers in their changed markets.
  
  

At the operational level:

• Help you in the short, medium- and long-term plug capability gaps created by the new market conditions
• Support you in ramping up your business and right-sizing it for your new trajectory.
• Review your current supplier readiness/supplier management processes against best practice using well-proven, advanced diagnostic tools to identify and correct risks, issues, gaps, exclusions, points of friction, etc.
• Help you to create a detailed, robust “return to market” action plan and help you to put in place any corrective actions resulting from the diagnostic assessment.
• Support you and your people through the “return to market” ramp-up with any necessary procedural, process, and cultural changes that you will of necessity have to make going forwards.
• Add value to your business after ramp-up to ensure you have access to the necessary trained, experienced professionals who can quickly answer your questions and help de-risk and stabilize your journey.
  
  

At the working capital level:

• Provide deep expertise in the processes that drive effective working capital management
• Assess and improve the health of your working capital and cash flow management practices
• Target and improve key working capital performance metrics
• Evaluate and optimise your Cash Conversion Cycle
• Improve Days Sales Outstanding ratios
• Improve Days Payables Outstanding ratios
• Improve Days Inventory Outstanding ratios
• Increase Net Working Capital Value
• Improve Net Working Capital as % of Sales
• Increase Shareholder Added Value
• Improve Return on Capital Employed
• Create active working management dashboards for control, reporting and decision support
  
  

Getting back to work will need the application of different skills and expertise depending on your market sector. Businesses reach out to and rely upon Centigo every day when they realise their changed circumstances now dictate informed, experience and authoritative thinking is required. To find out how Centigo can help you successfully return to competitiveness quickly and safely please feel free to contact us. 

Read previous articles in the series. 

1. OECD Economic Outlook, June 2020
2. France, Italy, UK, Euro area, Canada, USA, Japan