You must by now know that I am an admirer of Winston Churchill and most of all of his famous quotes which are so ingenious at depicting reality with a good dose of wisdom. Churchill is quoted as saying “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”, which I find is most fitting for the so called transitional phase we are in. Having said so we must all keep in mind that the risk of resurgence is real, and hence to abide by all social distancing and hygiene rules more than ever before.
In my continuous discussions with business leaders, directors and managers, it is obvious that there are common challenges being faced by all which require good guidance to ensure that their organisations have an efficient transition towards the next normal.
From merely surviving to thriving
So far many business leaders were thinking about the next normal and its implications. Now the thinking phase is well over and such business leaders need to make things work i.e. What to stop, start, and accelerate. To emerge stronger from the COVID-19 crisis, companies should start re-skilling their workforces now. The future is not what it used to be. Here are some pointers of things to act upon:
- Business leaders must strike the right balance between hope for the future and the realism that organisations need to hear. There are many diverse forecasts on what comes after COVID-19. Many will be helpful. Some will be right. Business leaders may have some hopes and dreams of their own. Creating value and finding pockets of growth are possible. It is important to have these aspirations, because they form the core of an inner optimism and confidence that organisations need. However, leaders should not inflate aspirations with a unrealistic scenarios about the future.
- Though we are in this transitional phase, the level of uncertainty and unknown remains very high. Many business leaders and managers are still very busy fire fighting in cash management and other areas, whilst now there is a compelling need to manage the transition and hence lead a “next normal” strategy discussion. Managers need to do their best to find out what these issues are,and then work to ensure that the organisation can navigate them. The point is to build the organisational capability to learn quickly and pivot faster than your competitors do. Resilience comes through speed. This may be a new capability that very few organisations have now and they will likely need to spend real time building it.
- Certain industries and sectors are truly struggling and require support. Several disrupted industries and many organisations in the sectors like the tourism sector are severely struggling and require support to safeguard their survival.
Common themes related to the next normal
Mid- to long-term implications and scenarios vary considerably and differentiate between industries. The stark reality is that some industries may never come back to pre-COVID-19 levels. I feel it is of pivotal importance that business leaders ask themselves what went wrong in their response to the crisis so far. Questions like what did we overlook in the past to have a resilient supply chain? How can we improve on this? Did we refuse to evolve our business models, although we knew that technology and shifts in societal preferences were forcing us to do so?
As many business leaders fire fight to preserve cash and are looking at getting a cash injection from banks, possibly through the MDB COVID-19 Guarantee Scheme, it is still extremely important that a right balance between profits and cash flow, though tricky, is well achieved. Many companies are right now sacrificing their future bottom line in order to payback the financing they are presently taking up. That’s not sustainable in the long term and companies will need guidance on how to balance the two.
It is very likely that the government will need to intervene in various economic sectors like never before, to prop them up. It will thus be vital for all businesses and economic operators to keep a constant flow of communication with government and regulators to make sure that any assistance comes in the right shape and form and in a timely manner.
On the other end of the spectrum, I still have discussions with certain business leaders who had kept “their gun powder dry” and are now looking around for good opportunities to purchase certain businesses. It may actually be the right time for responsible acquisitions, but they need to be sensitive and allow sellers a good path to exit.
Cyber risk is growing. Remote working increases the “attack possibility” for criminals. Many businesses are still overwhelmed when dealing with some proper work-from-home technology and the need for stringent cyber security.
Innovation may never have been so important. Innovation has always been essential to solving big problems. The world is looking not just for new things but also for new ways of doing things (especially on the people side, where we need new behaviours, long-term rather than short-term), capabilities, and work ethics.
Once we are speaking about people, it will be of vital importance that business leaders support their people. Many employees are facing unprecedented challenges as they struggle to work from home whilst juggling with home schooling and taking care of children. As business leaders you need to make sure that any transition to return to the office is well managed and most of all is based on a sense of support and understanding. These are defining moments and people will surely remember who were those who assisted them in their most vulnerable and difficult times and who did not. These matters are likely to become more important when speaking about working conditions than other hygiene factors like wage levels.
The path ahead will surely have ups and downs and will require resilience. As lockdowns are relaxed and segments of the economy reopen, viral resurgences and unforeseen events will keep growth from being a straight line going up. It will likely be a lengthy process of preserving “lives and livelihoods” over several months, if not years. Thus a word for Board directors. It is the board’s responsibility to coach and advise its management team, especially when the terrain is trickier than usual. However, boards should not mistake the need for vigorous debate with the need for consensus. More than ever, a bias to action is essential, which will frequently mean getting comfortable with disagreement.
Apart from all the operational focus needed for the return to work, it is even more important that boards and management teams take a step back to reflect upon the common themes mentioned above. In summary these are:
- Take the time to recognize how the people who (directly or indirectly) depend on the company feel.
- Have aspirations about the post-COVID world, but build the resilience to make them a reality.
- Strengthen your capability to engage and work with regulators and the government.
- Watch out for non-COVID risks, and make sure to carve out time to dedicate to familiar risks that have never gone away.
- Find out what went wrong so far and answer the uncomfortable truths