5 Strategic Steps for Chief Operational Officers to Face a Potential Recession
1. Continuous Investment in Digitalization
A recession usually means a greater need for short-term planning or re-planning and an emphasis on flexible business operations. Digitalization helps to cope with that, as it enables automated processes, including fluid capacity planning and resource management. Smart digital solutions are very useful, for example, when it comes to overviewing operational costs and staffing setup, and they enable comprehensive reporting, data transparency and efficient planning in the finance department. That’s why there should remain – especially in times of an economic slowdown – a continuous investment in digitalization, and the COO should play a leading role in finding new ways to digitize operations and processes. Last but not least, a strong focus should be put on tech-enabled people and culture management in order to put digital and thus more efficient processes into practice throughout the whole company. Through this, time demands and costs among teams can be reduced.
2. Granular Tracking of Operational KPIs
A high level of digitalization has the further advantage of enabling granular tracking and automated processing of operational KPIs. This allows real-time reporting and thus real-time decision-making. It’s obvious that in challenging times, companies have to be careful in terms of cost development. This can be effectively supported by automated analytics and data-driven decisions instead of being guided by fear or panic. Once again, the COO should be the driving force here.
3. Entering New Markets While Keeping the Existing Ones
Investment in digital is more than ever a key priority for the sustainability of most business models, and digitization becomes even more important in the age of disruption and economic instability. While competitors may still struggle with implementing digital measures and reduce their marketing and sales activity due to classic cost saving programs, the opportunity should be used to conquer new markets through digital consumer channels, with better and more cost-efficient targeting options. For example, brand awareness and lead generation campaigns can be built up to drive digital and data-enabled growth. In existing markets, COOs need to secure client relationships and contracts by showing to clients that the COO’s team is part of the solution to their problems caused by an economic slowdown.
4. Building a Diverse Client Portfolio
No company will ever be perfectly prepared for a recession, but it can be obviously more cautious by shifting towards a short-term perspective when it comes to monitoring the business’ performance and liquidity. Additionally, it is a wise step to mitigate business risks through the development of a diverse client portfolio. This means diversifying the range of industries the company works with, broadening the scope of activities and work packages, and being open to a greater variety in contract types and work lengths.
5. Boosting Internal Digital Talent Capabilities
Finally, COOs can manage disruption by focusing on the people. There is a lot of uncertainty in the market, and it is the role of the management team to signal confidence. On a similar note, COOs also have to ensure that talent has everything they need to continue to thrive. In this context, it is also crucial to boost internal digital talent capabilities and digital expertise in order to foster automation and efficiency within the business.
Find out more how OMMAX's services help companies to drive digital value.
And if you are more interested in how COOs can better prepare for the future, read Raconteur's publication 'The Future COO' in The Times, where our OMMAX co-founder and partner Christiane Jauch featured.
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