Never let a good crisis go to waste. So said Winston Churchill during the Second World War. His remarks ring true again, given the unprecedented 2020 that everyone has had. It is a watershed year that at times is referred to as the worst global event that has taken place since those dark days in the 1940s, a moment in life where the realisation of having everything so irreversibly changed can so tangibly be felt.
But despite its turmoil and challenge, the year has also shown us what is possible, when we are faced with adversity and the stakes are high. We adapt, we evolve, we turn on a dime and do things we didn’t think were even possible. We have shown extraordinary resilience and strength during this storm, not least among the backbone of our economy, our SMEs, who collectively employ about 6-million people.
Millions of these small businesses have been at the coal face of this pandemic. And many have not only survived but thrived.
“Despite all the odds, South African SMEs have shown their mettle and risen to the many challenges that the pandemic has thrown at them. They adapted to the situation and found solutions to their problems, in many cases creating opportunity out of adversity,” Retail Capital CEO, Karl Westvig, comments.
Seeing things differently
This is evident in recent research Retail Capital undertook among its customers during the various levels of lockdown. Among key findings, it revealed that 86% of SMEs said they would survive this pandemic, this despite the majority not receiving any relief from their landlords or financial institutions, including Government and the banks, during lockdown. Most of them (73%) also did not earn an income as they (72%) could not trade.
Encouragingly, despite these challenges, 75% of respondents reported learning something new during lockdown that they will apply going forward, while 39% said that they had made some changes to their business model.
“This shows us the resilience our SMEs have. They asked, ‘What can I learn from this situation and how can I turn that into something meaningful?’” says Westvig.
Key learnings
While different SMEs were affected in different ways, there are a few overarching macro-trends that spanned the length and breadth of the country:
The rise of online platforms: We learnt that processes we thought were set in stone, were not. Suddenly, when the world was turned on its head we figured out that there are other possibly better ways to do the same things. Taking this type of mindset into the future will be invaluable for any business. We also learnt that we can reach our customers anywhere.
Disrupted supply chains: When businesses lost access to supply chains that had served them for months or years, they either crumbled or reacted innovatively, by becoming feverishly protective of those that were still intact. We learnt that there are always alternatives – it may not be what you want, or what you think you want, but once you are forced to take the leap and give new ideas a chance, the results can be outstanding.
Funding and payment terms: We learnt that the government failed SMEs and that rhetoric is seldom turned into meaningful and measurable action on the ground where it matters most. This learning is not one of bitterness, rather it is a sober reminder that in the private sector we need to be supportive and innovative. This is why Retail Capital did what was needed in order to disburse hundreds of millions in small business funding while pumping hundreds of millions more back into the economy with payment holidays.
Communication: Transparency and a sense of community go a long way towards generating goodwill. When the chips were down, we found that SMMEs/ SMEs who were candid and upfront with suppliers and customers alike were often first in line to receive stock or new purchases when the economy stuttered back to life.
Job security: Many businesses who were forced to downsize to survive the pandemic realised that they could conduct their business with fewer staff overheads. While this in itself is not good news for an economy that desperately needs to create jobs, it does mean that SMEs are able to invest in new career opportunities as they grow and become more relevant in the fourth industrial revolution.
Digital innovation: One of the best outcomes of the pandemic is that businesses realised that the fourth industrial revolution is not merely marketing speak. We are no longer waiting for it. It is here – we are in the middle of it, and artificial intelligence, machine learning and cloud computing have enabled disruptions to become the norm.
“When you know things are likely to change rapidly, it empowers you to make decisions now that will mitigate the impact on your business. It drives you to build resilience into your business, diversify your supply chain and broaden your customer base. It instils urgency to digitise and takes advantage of everything technology has to offer,” says Westvig. “The pandemic also taught us to simplify; too many balls in the air at one time is not conducive to creating a fertile environment for agility, efficiency and speed.”
A future uncertain
Doing business in 2021 and beyond is going to require an appreciation of this. Things will never return to how they were before and the future remains uncertain. Once the virus is a memory, perhaps office parks will be full again – but the way the businesses in those office parks conduct their affairs will have been changed forever.
“This is not bad news. This is incredibly exciting. It means that we have the opportunity to reimagine our futures, and reimagine the wealth and prosperity we can build for ourselves and children.
“As Nelson Mandela famously said, ‘I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear,’” concludes Westvig.
For inspiring stories of hope during the pandemic download our Unlocked eBook, and visit our YouTube channel for interviews with local #GameChangers.
