Beating COVID
The Weekly Report – October 12, 2020
Short-term planning could yield long-term dividends.
Market uncertainties caused by COVID-19 have made long-term planning impractical for many manufacturers.
But that doesn't mean they shouldn't plan, according to, Steve Haarstad, one of Enterprise Minnesota's expert business consultants. In the current issue of Enterprise Minnesota® magazine, Steve suggests a solution to these manufacturers. "Change the conversation," he says. Change the way you think of planning. Change your timeline for strategic planning — for now — to months instead of years. In other words, ensure your company's long-term stability by capturing the opportunities you can realistically predict.
Steve goes into great detail on his approach to strategic planning in his superlative virtual manufacturing workshop, which many manufacturers around the state have already tuned in for. If you haven't been one of them, you're in luck. He'll be presenting it again Nov. 11.
Steve says the shrewdest long-term strategy for vulnerable manufacturers in the COVID-19 economy may encompass just 90 days, and that COVID-19-era planning should focus on mitigating near-term marketplace fluctuations.
"It's about viability and sustainability," he says. "We don't know what life is going to look like in six months. We have to abandon that long-term view and latch on to any glimmers of hope and convert them into opportunities for the business."
Most manufacturers started 2020 with a positive view of their prospects for the year. When our State of Manufacturing® pollster asked executives to rate their prospects for 2020, even as late as March, 89% were highly optimistic about their prospects for the year. But then things changed.
"Somewhere around March, COVID-19 hit," Haarstad says, "and it changed their business, either for the better or worse."
How well manufacturers survive COVID, he says, may depend on developing a 90-day plan built on clarity. At its core, Haarstad's process urges manufacturers to reframe their vision of year-end success. The reframed success, he says, could be broadly defined as growth, finding new customers, making investments, or capturing a new market. Or it could merely be to stop the bleeding. Planners should represent this vision in a single initiative; the steps toward it should be guided by a carefully drawn short list of key decision indicators.
Steve describes his "sustainability" pandemic planning process as a showcase for "the power of narrowing." It builds on answers to the same four questions manufacturers would have answered, say, six months ago, when they plotted a more traditional three- to five-year plan.
Why does our business exist? Who are we? What's our purpose? What's our culture?
Where are we now? What is the current state of the business?
What's our vision for the future direction of the company?
What do we have to do to enable the company to achieve that vision?
"The answers may not be simple," Haarstad says, "but the questions are."
Haarstad also recommends judicious use of data. "Data tells a story," Haarstad says. When used properly, data can illuminate truths about business performance and suggest ways to adjust sails.
While modern manufacturers have information dashboards that can provide an overwhelming amount of data, Haarstad suggests winnowing it to a handful when making decisions, relying equally on essential performance indicators (KPIs) and key decision indicators (KDIs).
When analyzing data, Haarstad recommends paying attention to a few key factors:
1. Analyze top customers. Evaluate how they might finish 2020 and how their performance might influence your own.
2. Keep tabs on your competitors. Planners should assess the condition of the companies with whom they compete for business, which starts, Haarstad says, with knowing who they are.
3. Conduct a scenario-based SWOT analysis. Assess the strengths, weaknesses, opportunities, and threats based on how well your company has coped with the COVID economy's constraints over, say, the past 12 weeks.
Finally, Steve says, manufacturers should employ a concept known as prospective hindsight to sort of divine what could happen in both best- and worst-cast scenarios.
By using prospective hindsight, strategic planners conceive of hypothetical future events, and plot actions that will either minimize the potential damage (a "pre-mortem") or enhance the possible opportunity (a "pre-parade").
"Hindsight is always 20/20; we can use this tool to change perspective and reframe the situation a little more broadly," he says.
We documented his approach to planning and strategy in the most recent issue of Enterprise Minnesota® magazine. Check that out for a thorough, deep dive on what writer Tom Mason calls the "Planning Paradox."
To read the full story in our magazine, please click here.
October 22 – Investing in Your People to Create Leaders at All Levels
Join talent expert Abbey Hellickson as she demonstrates ways to create an environment that fosters trust, leadership and communication throughout your company. Online via Zoom Learn more and register
October 27 – Sustaining Daily Dialogue
Greg Langfield discusses techniques you can use to help sustain your continuous improvement efforts throughout your organization. Online via Zoom Learn more and register
November 5 – State of Manufacturing Survey Release
The State of Manufacturing® is the most comprehensive survey of Minnesota's manufacturing industry. Join us November 5th as we release our findings from our second survey of 2020 with insights from the impacts of COVID-19. Learn more and register
November 11 – Strategically Navigating an Uncertain Future
Steve Haarstad, one of Enterprise Minnesota's top strategy experts, will show you how to create or adjust your business strategy to weather the next 90 days. Online via Zoom Learn more and register
See more upcoming events
A look back at manufacturing for Douglas County
"The Alexandria Developers" used an industrial development initiative in the 1950's to create public-private investment in manufacturing, which laid the foundation for Douglas County's manufacturing success. Oct. 9, Alexandria Echo Press Read more
Chandler Industries of Montevideo working hard in fight against COVID-19
As demand for their ventilator parts increased 15-fold, Chandler Industries hired 12 new employees and created a new manufacturing process to keep up. Oct. 8, Redwood Falls Gazette Read more
Southeast Minnesota's Manufacturing Week
Southeast Service Cooperative teamed up with 41 organizations, schools and businesses to bring Manufacturing Week to life virtually for Southern and Eastern Minnesota. Oct. 6, Albert Lea Tribune Read more
State of the art medical device manufacturing facility to open in Edina
PetVivo Holdings, Inc., an emerging biomedical device company that focuses on innovative therapeutics for pets, announced its new manufacturing facility to be located in Edina, MN. Oct. 5, Globe News Wire Read more
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