Companies must reformulate their purpose, priorities | Opinion – analysis
As the coronavirus pandemic breaks out across the world, even the most rigorous contingency planning and disaster management systems have gone wrong. While we are far from overcoming the pandemic at this stage, the examples from China, Taiwan, South Korea, and Singapore offer valuable lessons for companies. An analysis of some of the companies at the forefront of effective action offers some clues as to the steps that could withstand the test of time.
First, early and decisive action is imperative. Learning from past experiences, forecasting the impact on organizations / partners / employees and taking proactive measures will be essential to manage the crisis. Here is an example. Starbucks China closed 80% of its stores a few days after the news of the virus appearance, prioritizing the safety of its partners and employees over business. It also paid full wages and instituted a partner assistance program to help with the insurance of its partners, employees, including contract workers employed in individual stores, and even their family members. This helped build the confidence of all stakeholders and has enabled Starbucks to reopen these stores rapidly since the impact of Covid-19 has waned.
Second, this crisis is an excellent opportunity for companies to refine their purpose and frame the business as part of a larger human ecosystem with broader responsibility to the community. It is a time to institute internal rules that help the company make more humane decisions. This is not only ethically correct, but economically prudent.
Companies must ensure that they do not charge and fall into the trap of short-term price increases for immediate profits; Such actions could harm your reputation and brand. Going beyond the profit motive will not only reinforce pride among employees and partners, but will also help improve the company’s stature. For example, Dyson, a world leader in airflow technology, which is used for its household products, used its knowledge to design a completely new fan, called CoVent, and committed to supplying 10,000 units, all within ten days. post-pandemic.
Third, corporate leaders must assess their organizational flexibility and decision-making to address market disruptions like this. Bringing the entire organization together to perform some specific actions, and then get creativity from all team members, will be a good option for a company. The Covid-19 pandemic and lockdown learnings can assist in contingency planning for future crises, to ensure that the company is better prepared rather than encountering flat feet. These actions may be aligned with business continuity, but most importantly, they must give teams the freedom to respond quickly, make decision-making more democratic and in line with the company’s purpose.
For example, early in the pandemic cycle, Diageo India predicted an increase in demand for protective products. His team from India reused its 15 factories to produce 300,000 liters of hand sanitizers and donated 150,000 masks to five public health departments for use by health workers. In addition, he created an insurance fund of Rs 30 million to help waiters in this time of need. This is especially critical in countries like India, where social security is minimal, at best.
Fourth, companies must apply an “all cycle” strategy during this critical period. While the first days of this pandemic crisis will be devoted to ensuring the safety of teams and partners, the next stage presents the organization with the opportunity to think through the cycle and define initiatives that will allow it to come out stronger after the pandemic.
The development of perspectives and projections on life after Covid-19 can give companies an initial advantage when business emerges through the current depression. Refining the value proposition and business model, defining the online and e-commerce strategy, driving a more effective organizational structure, and identifying new growth opportunities may be the focus areas.
And finally, it is a time for the investment community to reconsider their valuation models of the company. It will become increasingly important to determine the resilience of the business rather than just its profitability. In an volatile, uncertain, complex and ambiguous world, an organization’s ability to withstand shocks (in supply chain management, business continuity, or regulatory mechanisms) must be treated as a critical aspect that the market will assess when attribute the correct value to the company.
The human, social and economic cost of Covid-19 continues to rise and it will be a long time before its true impact is understood. However, the companies’ previous actions will keep them in good shape and will generate greater resilience in their future operations.
Vinay Dixit is an expert in business transformation, CMO and mentor.
Lloyd Mathias is an angel investor and business strategist
The opinions expressed are personal.