No one knows what the future holds—and as the COVID-19 pandemic has clearly illustrated, it's possible for global catastrophes to arise out of virtually nowhere.
A previously calm, stable business world was essentially flipped upside down in a matter of moments, transforming the economy in a way that no one saw coming and with ramifications that are still wildly unclear.
The thought of a pandemic, war, or economic meltdown is enough to panic any company — because no one is truly immune.
Take a look at Disney, for example. The global entertainment powerhouse saw its business crippled to the tune of billions of dollars as the coronavirus tore through the world economy. With domestic and international parks shut down, cruise ships docked, sports on hold, stores closed, and TV and movie production put on temporary hiatus, the preeminent name in entertainment watched its many revenue streams go black at once.
However, seeing the effects of a little trouble in paradise isn't a reason to throw your hands in the air and walk away. COVID-19 isn't the end of Disney. Due to relatively strong finances and an expert attitude toward planning ahead, it's more than likely that the home of Mickey Mouse will be just fine in time.
With the right approach to future-proofing, it's possible to create a foundation designed to withstand storms, from pestilence and plague to a short-term economic slump.
What is future-proofing?
Much like weatherproofing your property to protect against weather damage or waterproofing your new boots to keep rain from destroying the leather, future-proofing is intended to protect a business from whatever may come to pass in the future. By describing a series of steps companies can take to best anticipate future challenges and create contingency plans for them, future-proofing can provide a way to weather even the most aggressive of metaphorical — and literal, as the case may sometimes be — hurricanes, tornadoes or tsunamis.
Unlike waterproofing or weatherproofing, however, future-proofing is a little less specific and a lot less certain. While the properties of water and the ways to protect against it are well known, the mysteries the future may hold are not.
The concept of future-proofing sounds a little vague, and that's because it is. The strategies behind prepping for the future can vary from industry to industry and company to company.
However, some steps are universal, and taking time now to invest in yourself down the road can be the difference between flourishing and failing.
6 steps to future-proof your business
The future is coming, whether you like it or not. And, unfortunately, the future is unlikely to be a steady stream of sunshine and rainbows. These six steps can help you build a defense, fortifying the walls of your proverbial business fortress against attacks of all shapes and sizes.
1. Adopt new technologies
Technology is always changing. What worked today may be out of date tomorrow, and without the ability to keep up, it's easy to get left behind. For small businesses with limited financial resources to pour into technology, consistently updating systems and employing new approaches can seem wasteful. Unfortunately, failing to keep up can be a costly pitfall in the future.
Say, for example, you still use standard in-house servers for your data rather than adopting cloud-based alternatives. This may work fine for a while, but if a natural disaster levels your office, you may find yourself facing a permanent loss of data.
Taking small steps, like migrating applications and data storage to the cloud, can provide a flexible and more adaptable environment that is better situated to withstand future challenges. One study found that 38% of businesses see enhanced data recovery opportunities as a primary driver for cloud-based transitions.
From leveraging big data to employing AI technology to streamline and optimize workflows, there are a lot of steps businesses can take to improve abilities for the future.
2. Create scalable structures
For most companies, growth is a goal. Being able to increase revenues, reach more customers, and make more sales is usually a part of a long-term business plan. However, succeeding means having an infrastructure in place that makes growth easy.
Future-proofing doesn't just mean putting measures in place to prevent problematic events; it also means being in the best possible position to take advantage of positive opportunities. If growth is on your desired horizon, scalable solutions should be an important part of your present.
What this means will, of course, vary from one business to another, but common scalable strategies include:
3. Learn from your customers
You may love your products, and your employees may love your products, but if your customers don't agree, your business isn't going to go anywhere fast. Customers are the best indicator of what works and what doesn't for your business. The products that sell will keep you afloat, and the things customers like about your business will keep them coming back.
Instead of relying solely on your own ideas and experiences, lean on your customers when working to future-proof your business. Use feedback surveys and customer reviews to learn what is working and what isn't, and use the knowledge provided to plan for your future.
Continuing to stock your shelves with products no one really likes is just wasting money. Put your focus into the products that work and use ideas and feedback provided about everything, from store layout to website design, to offer the best possible customer experience.
Companies that focus on their customers are 60% more profitable than those that don't. An emphasis on customers allows companies to identify what is most important and cater specifically to that.
4. Engage your employees
Your employees are among the most important facets of your operations. Providing indispensable support across everything from customer service to finance, the team you have assembled can make or break you. High turnover can be extremely costly, leaving you with untrained employees without the kind of loyalty that counts when the waves become rough.
A team that will stand by your side can play a big role in making it through both good times and bad, so find ways to engage and invest in your team.
Instead of managing like a dictator, become a leader. Make your employees a part of the process of running the business; listen to advice, solicit feedback, and take grievances to heart. Show your team that you value their thoughts and ideas, and use what you learn to make your company a better place to work.
Payroll seems like an easy place to save money, and sometimes it can be, but failing to properly compensate your employees can lead to a revolving door. Compensation goes beyond cash in the bank too; over half of employees value growth potential over salary.
Even if wages can't be sky-high, make sure the available perks and growth opportunities are worth the trade-off.
5. Optimize your business operations
Every business can run more efficiently. From CRM software that captures customer information at the point of sale to marketing analytic software to email programs that can mass-send marketing messages with little input from you, there are plenty of ways to optimize operations. Optimization can refer to saving time, money, resources, or all of the above, but regardless, the end goal is to improve the way daily business functions are managed.
Effectively optimizing a business means starting at the top and taking a high-level view of day-to-day operations. What are the biggest cost drivers? What tasks take up the most time on a day-to-day basis? Which functions have the largest teams or require the most resources? What, if any, tools are in place to facilitate more effective operations in key business functions?
Once priorities are identified, research on better ways to approach improvements can begin.
Optimization can require an investment, but this isn't necessarily a bad thing. The cliché "it takes money to make money" is a little tired, but spending in key areas now can put you in a better position down the road.
6. Stay up to date with current events and business trends
Running your business in a vacuum is rarely a good idea. Virtually all industries are impacted by current events, like ups and downs in the stock markets and changes in foreign trade agreements, and willfully ignoring this is a good way to end up out of business.
Take COVID-19, for example. Whispers of potential implications started to spread as early as January 2020, with more serious threats emerging in Asia and Europe in February and early March. Countries that took immediate preventative action, like South Korea and Taiwan, were able to somewhat contain the spread, preventing widespread cases and death rates. Countries that did not, like Italy, Spain, and the United States, saw large-scale outbreaks in numerous major metro areas.
Future-proofing isn't a one-and-done kind of practice. How you prepare for what is to come should be an ever-evolving effort. Staying on top of current events and business trends — and doing due diligence into how these kinds of things can affect operations — offers a leg up, helping to highlight pain points and areas in which to improve before it's too late.
Get started with future-proofing your business
Future-proofing shouldn't be something that's on your to-do list for another time; it should be an active part of your ongoing plans and strategies. The process isn't effective if it's the kind of thing you do later. It only works when you get started as soon as possible, because the future isn't going to sit around and wait until you're ready.
1. Get your business in a strong financial position
Tight margins are common in many businesses, but that doesn't mean it's a good way to keep moving forward. When a few weeks, or even a few days, without income can risk closing your doors, your business isn't in a good place to withstand surprises in the future.
Building up a strong balance sheet may seem like a challenge, especially with potential investments required to modernize tech strategies and optimize operations, but shrewd planning now can avoid damage down the road.
Take, for example, how two competitors' approaches to staffing during COVID-19 led to different results. Disney World and Universal Studios in Orlando were both forced to close operations in March as the pandemic began to spread across the United States. While both companies hoped for a rapid reopening, it soon became clear that an extended shutdown was inevitable.
Faced with huge losses and no sign of light at the end of the tunnel, Disney made the challenging choice to furlough virtually their entire staff worldwide, including around 43,000 people at their Florida location alone.
NBCUniversal, with a smaller park footprint and the advantage of a profitable parent company, Comcast, had the financial means to maintain park headcount. When reopening finally became feasible, Universal Studios was ready to roll on June 5th. Disney, however, was forced to set an opening date for over a month later, on July 11th, due to the hurdles in recalling their furloughed team. Because NBCUniversal was prepared financially, the company was better positioned to make forward progress on a faster timetable.
2. Develop an action plan
What does the future look like to you? Where do you see your business in five years, 10 years, or even 20 years down the line? What products or services are a part of your growth plan? What is your plan for the next big recession?
If you don't know the answer to these kinds of questions, now is the time to start thinking about them. A strong future-proofing strategy means having a plan in place to both guide the course of business now and manage situations that may arise as time goes on.
Based on your knowledge of the business and your plans for the future, put together an action plan that touches on the most important aspects of ideal business evolution. Focus on pain points, growth strategies, ideas for accomplishing financial stability, and how to best approach the six steps outlined above to assemble an action plan that addresses every aspect of what the future may have in store.
3. Create a structured process
An action plan is more theoretical, outlining what needs to happen in broad concepts. Translating this to reality, however, means creating a structured and detailed process.
Say, for example, the first task on the future-proofing agenda is to revamp the monthly closing process using more sophisticated reporting tools. This is a good plan, especially if current closing procedures are clunky, inaccurate or time-consuming, but this high-level idea doesn't really address the technical details.
A structured process is far more granular, outlining steps like identifying the major problems in the current closing process, performing due diligence on potential solutions, implementing new software platforms, schedules, or best practices, and rolling these changes out throughout the business. Every item on the action plan needs a process and a timeline, bridging the theoretical and the practical to find a solution that works.
Success in the future is more than a game of chance. To stand the test of time, it's critical to anticipate what's coming and have a game plan for how to meet it. With an effective approach to future-proofing, companies can do their best to make a growing concern an inevitability, not a roll of the dice. There's no way to halt the next COVID-19 in its tracks, but proper preparation can minimize the impact and increase the likelihood of making it out in one piece.
Author: Leigh-Anne Truitt
Bio: Leigh-Anne Truitt is an SEO Specialist at BigCommerce where she researches and discovers strategies to increase organic traffic. Prior to joining the e-commerce industry, Leigh-Anne perfected her marketing skills at The University of Texas at Austin and CanIRank.