Companies worldwide are going through difficult times as a result of the sudden economic recession generated by the current pandemic, encountering various unfortunate scenarios.
The emergency has made operational continuity difficult for many companies, significantly affecting their cash flow. The virus has exposed extreme vulnerabilities in the way enterprises operate. Bold measures, which even in normal times can be challenging, have been required, and the crisis caused by COVID-19 has introduced undeniable complexities. To help your present and future challenges successfully, I can identify three fundamental keys that must be considered so that companies can adapt quickly to changing environmental and market conditions.
The economic uncertainty remains, so it is advisable for a company to make swift decisions to overcome the current crisis. Enterprises that take sound and immediate action will be in a better position to stabilize and resume their operations in the required manner.
We know that there are companies that had a business plan for this year, and that in most cases it will not be possible to execute. What is happening in the economy is something that no company could have predicted. Many have defined the COVID-19 as a force majeure, equating the pandemic and its impact to an unavoidable event. In this sense, it is very difficult at this time to know how and when the markets will come out of recession.
That said, it’s important to be proactive and effective so that the challenges and difficulties that arise can be met, to take advantage of the available resources and optimize the time spent on a task, regardless of the day and time. We must be creative and resourceful in these circumstances.
Some economic disruptions may be temporary, but others will be long-term or, in the worst case, permanent. Being proactive and flexible will allow you to modify your business plans when necessary, so you do not have to start from scratch if an unforeseen variable that needs to be considered arises. This means that you could use the economic downturn as an opportunity to make changes or develop new goals in your business or organization.
2. Clear and accurate communication and information
Effective communication is a fundamental factor to act promptly in finding solutions: it requires everyone’s effort to readjust, clients as well as business lawyers; it adds value to your client’s business by providing essential insight beyond strictly legal advice.
Distressed companies seeking assistance in different legal aspects are sometimes subject to strict guidelines imposed by the corresponding regulators, varying according to their location in the country and their economic activity. Complying with these guidelines or regulations is not always easy. However, technology and registry solutions that ensure compliance with the relevant regulations can alleviate delay in some procedures. The implementation of electronic means is undoubtedly essential. In these situations, it is advisable to keep relationships on an ongoing basis to promote the responsible, accurate and useful flow of information through national, regional and local means. This recommendation also applies to relations with all governmental entities.
3. Acceptance and resilience
Many of the current problems related to the crisis stem from a lack of acceptance of the fact that we face an unprecedented pandemic that, in addition, is not expected to end soon. Ideally, we must find the necessary calm to keep up with the present moment and to be able to attend day-to-day matters. Developing resilience has become vital to overcome difficult circumstances in a positive way. This is how one must rebuild and reorganize, and be open to what life has to offer, without losing one’s identity. The key to resiliency is knowing how to manage the problems that affect us in a productive way.
Each company is in a unique position with respect to available capital, cash flow, and management of lost revenue. Therefore, companies will come out of this situation with different levels of stability. Some will require only a simple procedure, others will go through more complex processes. Unfortunately, some will not be able to recover. Developing a plan of action specific to your business and its needs will improve your preparedness to successfully resume your activities after the crisis. Focus on your position, promote what creates value, strive to make your own company’s resources and potential efficient, and remember to hire professional advisors to help you design a business plan specific to your company’s challenges.
About the author:
With 16 years of experience in the retail, consumer goods, and agroindustry sectors, María Alejandra has experience in corporate, contractual, and regulatory matters as Corporate Legal Inhouse counsel for national and international companies with great trajectories in the country. Her areas of practice also include commercial, environmental, labor, intellectual property, franchising, and administrative law.
She has participated in strategic negotiations that are related to the development of real estate projects, corporate restructuring, as well as legal audits of companies’ due diligence, competence, and mergers and acquisitions. She has led teams in companies of different industries and has participated comprehensively in multi-jurisdictional mergers and acquisitions of significant importance in a variety of sectors.