Emerging stronger in the new normal
No individual or organisation is immune to the intense and long-standing repercussions of the COVID-19 pandemic. The dynamic scenarios brought in by this crises requires constant realignment of strategy. There are a few things businesses should consider in such unprecedented and uncertain times.
Crisis management framework
Globally, close to four in 10 (37 percent) of companies that are in a better place after the crisis hit, had proactively invested in a well-defined crisis response programme and governance structure before the crisis hit – and nearly half (50 percent) saw their revenue grow as a result.
A working crisis management framework provides a baseline on which crisis response can be based to make it emphatic, effective, timely, and coordinated. Such a framework is principled on a ‘chain reaction machine’ (Rube Goldberg machine), where one incident sets into motion a series of precise actions, in a pre-defined manner.
A crisis management framework needs a designated crisis leader, who is respected both within and outside the organisation, and an all-rounded crisis management team consisting of other leaders of the organisation who work together with integrity with a well-documented up to date crisis plan. A crisis plan needs depth - must be tested through simulation and scenario building - and breadth - incorporating all unknown scenarios that could possibly put an organisation at risk.
In our view, the COVID-19 crisis brings into focus five main pillars which are immediate imperatives for organisations and their leaders to focus on for survival, business resilience, and to emerge stronger.
People and safety
Working from home with the lingering prospect of lower monetary growth, pressure to remain productive and relevant, little or no help to manage additional family responsibilities, coupled with the anxiety of keeping oneself and one’s family safe from a pandemic can cause serious burn out issues.
Therefore, both during and post the pandemic, organisations should focus on physical and mental well-being of their teams, providing medical support, emotional support, and assurance that is needed during and after the lockdown.
Post-lockdown, since many organisations would have experienced carrying out work remotely, it would be possible to roster physical presence of employees for matters absolutely essential to reboot the business.
Liquidity and cash management
A critical step in the current environment is to conserve cash and manage liquidity. Financial decisions have an impact on customer acquisition, supply chain, profitability, and growth. Simulation of worst case to a realistic scenario based on data modelling and scenario analysis can provide valuable insights into what strategy would best suit the organisation’s long-term interests as well as short-term survival.
While cutting cost and conserving cash would seem to be the most obvious thing to do, an organisation also needs to find ways of generating new cash flows and securing customers through measures such as advance sales, discounts, warranties, and flexible returns, re-purposing existing businesses to address immediate short-term problems.
New cash flows could provide working capital through internal accruals (lower cost) rather than resorting to external borrowing (high cost) or additional equity funding (higher cost). They would also help in providing new revenue streams in the new normal.
It is critical to examine key contracts and assess the coverage in insurance and application of force majeure clauses as there cannot be a ‘one size fits all’.
Business continuity and strategic planning
There are many success stories of companies managing to turn crisis into opportunity by reimagining the business models or by repurposing their products or services ‘in the midst of a crisis’.
In the current situation, there are organisations who flipped their online and offline strategies to respond to the challenge of social distancing and lockdown. This is expected to be the new normal post the pandemic.
Post-lockdown, social distancing on modes of travel such as flights, trains, cabs, etc. may drive up prices for consumers. Organisations that invested in helping employees have a secure remote working environment and tools to drive and measure productivity may continue offline in the new normal, saving real estate cost and improving their profitability.
Due to lesser travel in the future, there could be excess capacity in airlines and railways which could be repurposed into cargo to meet the high demand of transporting goods quickly. The low oil prices at present is an opportunity that most players should take to generate free cash flows.
Supply chain crisis
Supply chain has been one of the most disrupted functions due to restrictions in movements. For many businesses, this has also meant a time to seriously deliberate on developing alternative or more resilient business models.
Managing supply chain during such crises could be extremely complex depending on the length of the chain and its geographical spread. A good response to crisis in supply chain has to be driven by accurate and real time facts and insights gathered through intelligent analytics tools. Mapping critical suppliers, suppliers of suppliers, sources of critical raw materials, inventory levels, costs are not just good to have, rather they are a must-have ingredient for an effective response to a crisis.
In several ways, crisis management in supply chain is a microcosm of an enterprise’s wide crisis management and would have a structure which will reflect the crisis management framework of the organisation. Therefore, implementation of learnings from a crisis and acting on inputs from simulations and scenario building need to be worked upon in a structured manner to emerge stronger.
Organisations which have been able to reimagine and repurpose supply chain and logistics infrastructure are discovering potentially new streams of revenue for the future.
Secured remote working environment
Most technology companies and startups are used to the concept of an agile workforce and agile workspaces and they have been able to transition to remote working better than traditional ‘brick and mortar’ companies.
This new norm of employees working from home, outside the secured office network, has created a lot of opportunities for cyber criminals. Safeguarding against a cyber threat under normal circumstances may fall short when there are newer more ingenious attacks designed to look like genuine COVID-19 communications.
Responding to cyber threats in such crises requires some interventions such as setting up of mechanisms to establish trust like identity management, virtual private networks, endpoint security, and patch updates.
To emerge safer and stronger, an organisation needs to take certain short-term measures such as strengthening of security operations, establishing guidelines for working remotely, employee awareness, and training. And in the long term, an organisation needs to set up a well-defined incident response management centre with a dedicated team.
Succeeding in the new normal
Post the pandemic, most organisations will struggle to restart from where they left off before the crisis. But organisations that reinvent themselves during this period would emerge stronger in the long run. This crisis brings to fore the need for organisations to make crisis planning a priority, organisations with a clear crisis strategy are nimble, have the calibre to switch modes and are able to respond to such situations quickly.
Looking at it positively, a crisis of the scale of COVID-19 represents a unique opportunity as this enables most organisations to add immediate practical experience of dealing with uncertainty, navigating ambiguity, and surviving an uncertain environment.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)