The World is battling with an invisible, destructive and deadly foe which has created a human tragedy, with 2 million people already infected, and more than 120,000 dead, as of mid-April. The highly interconnected nature of our globalised social and economic systems, and the non-stop proliferation of information, have rapidly transformed this human tragedy into a mammoth global political, economic, psychological and social catastrophe.
Businesses world over are working flat out to rapidly stabilize their companies. Survival is the top priority today. We are at the cusp of the greatest recession since the Great Depression, far worse than the Global Financial Crisis. The IMF projects global growth in 2020 to fall by minus 3 per cent. The adverse impact on most advanced economies is expected to be at least double this rate.
No one knows what’s going to be the lasting damage. Businesses are concerned about a massive economic shock. Hundreds of thousands of companies are suffering a collapse of their revenue base; balance sheets have been devalued through lack of activity and markets. Most organisations are currently prioritizing all necessary activities to keep the business running. Many have put on hold strategic programs and are curtailing discretionary activities with little assessment of longer-term consequences to enable them to free up capacity, working capital and management resource.
However, prospering has to be the long term objective. Firms have to run a marathon while running a sprint. Strategy and resilience are no longer academic exercises to which we pay lip service. Business is going to be transformed by COVID-19 – not just for economic reasons. So it is essential to plan how the business has to be transformed to adapt and eventually thrive in the new normal.
Prominent public health experts have warned that we may be at the beginning of a recurring cycle of extremely dangerous global pandemics which we are neither prepared for nor understand. This is predicted – even if we have a vaccine sometime during 2021.
So the period after the current Pandemic reaches its peak and business attempts to return to some form of normality is being labelled the ‘COVID Ready state’. The next eighteen months will probably be extremely volatile and dynamic until a safe vaccine has been developed and rolled out globally In that time, societies the world over have to be on readiness for a second or third outbreak when some cities and regions will experience a local resurgence of the epidemic as restrictions are lifted.
Planning for the months ahead
Businesses will have to plan for on-going pandemic readiness for what the World Health Organisation calls a “COVID ready society” in which Governments and communities will have to immediately take action to suppress small recurrent outbreaks before they can escalate. The goal will be to make sure countries, regions and cities don’t have to resort to lockdowns again. There will be strong measures on social distancing, data-led surveillance and planning for disruptions to business and operations in the targeted affected areas as outbreaks are stamped out at the earliest possible stage. There will be a major implication for business planning as their staff and companies in their supply chain are subject to targeted two-week self-isolation.
To stabilise shattered economies, policymakers are likely to continue at least some fiscal measures to support their economies, even after containment measures begin to relax. It is likely that governments will also need to extend demand creation; offer hiring incentives and assist bailout struggling firms to aid the recovery. Moratoria on debt repayments and debt restructuring will almost certainly need to be continued during the recovery phase.
Existing leadership and risk management skills, capabilities and tools will be DEEPLY challenged to meet the demands of the new COVID ready state. COVID-19 has already highlighted the very real struggle for businesses to adapt quickly in a rapidly changing environment amid government policy confusion. Inaction, hubris and hesitation by certain Governments over a relatively short period of time have already led to catastrophic disruptions. The picture is mixed. Some smaller countries, or states who rapidly introduced test and tracking early on, have performed much better. But such is the scale of the pandemic and economic crisis globally, we are in an extended period of disruption over a number of years. One thing that is certain in this radical uncertainty: we will NEVER return to the status quo ante.
Organisations must accept this and take the necessary urgent steps:
- Recognise that new board and leadership competencies and characteristics are urgently required, for example, adaptive capacity in response to rapidly evolving change; aspirational, yet realistic in the face of crisis and; trustworthy in meeting the needs of staff, customers and other key stakeholders.
- Understand the benefits of virtual, distributed work – including, wherever possible, working from home.
- Develop their management and leadership skills to optimize returns from remote working and CRUCIALLY motivate and engage their staff all concerned by their own and family’s well-being, and the health of the company and their jobs.
- Leverage new working practices to ensure robust, inclusive debate to optimize decision making and enable the rapid flow of information flows to where it is needed.
- Realise that the way they traditionally have managed people will be less effective in the new working from home / social distancing environment.
- Accept that they may need to consider sharing critical resources with rivals – including channels, processes, resource networks, technologies.
- Understand that they must break old habits and develop an improved culture of collaboration across supply chains
- Recognise that social responsibility may become one of the most important evaluations used by investors, customers and regulators. Indeed, profit may be an outcome of social responsibility Maximise the value from robotic process automation, including analytical process automation.
There are signs of the rapid change that firms have made this year – more than 2 billion people are working from home – a change in a matter of weeks. The ADAM Global member, Stratagem Partners is finding from its clients and partners, COVID-19 has also made businesses painfully aware of the fragility of their ecosystems. Now, they are trying to understand and dynamically respond to the rapid wave of new and emerging government policies, legislation, regulation, business practices, competitor and consumer behaviours. Their responses to the crisis will reveal much. Are firms reproducing the past? Or are they using this pandemic as an opportunity, however painful, to transition to a different future? As the old adage says: never waste a good crisis.
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