Navigating the Coronavirus crisis
Indian business leaders can navigate the COVID-19 crisis by thinking and acting across 3 time horizons simultaneously
- Article |
- 15 April, 2020
- The unfolding coronavirus pandemic has created an unparalleled healthcare and economic crisis that is profoundly impacting every aspect of Indian society.
- Business leaders face the daunting challenge of leading their organisations through this period amidst huge uncertainty about both the future trajectory of the virus, the severity and duration of its economic impact, and the shape of the future economy that will emerge in its wake.
- In response to such uncertainty, leaders can successfully navigate the crisis by thinking and acting across three time horizons.
In the face of such a far-reaching crisis, Indian business leaders can be forgiven for feeling overwhelmed. However, despite the prevailing uncertainty, they can successfully navigate a path through the current turmoil by thinking and acting across three time horizons. Specifically, leaders need to act now to manage the present challenge of returning to work, they need to quickly adapt to cross the coming chasm created by a sharp economic downturn, and they need to advance by taking a new road to growth in the post COVID world.
Each of these three time horizons requires a distinct mindset and approach. Further, while the present restrictions are consuming most attention now, leaders need to balance planning for each time frame and start work on all three timelines immediately. Taking steps to stabilise the business in the coming weeks without considering their consequence under longer-term scenarios will jeopardise business viability going forward.
Manage the present
Despite easing restrictions many parts of the country remain under effective lockdown and rising case counts could quickly change the situation. During the current period businesses need to manage the immediate challenge of protecting and reassuring their people, ensuring business continuity, supporting customers, and managing cash flows.
The duration of the restrictions will depend on the effectiveness of the government's current measures in containing the virus and the exit strategies they adopt. This will likely vary across geographies according to the on-ground situation and across industries according to their compatibility with social distancing and their criticality to the overall economy.
During this period, the dominant approach for leaders should be one of crisis management. Executives should set up a cross-functional COVID-19 team bringing together heads of all key business functions and set up a program management office to coordinate actions and stakeholder communications.
The COVID-19 team should convene daily and include the CEO. The priority of this team should be to take all necessary steps to protect employees and customers and establish clear lines of communication to both. In parallel, the team should create and implement the firm's business continuity plan. This should include implementing measures to make work from home easy and productive for colleagues during this period. Further, the COVID-19 team should immediately assess the firm's cash flow projections for the next three months and take the necessary 'no regret' actions to stabilise the situation.
Cross the chasm
As the lockdown eases business won’t return to normal. Companies will need to survive a period of severe slowdown and continued disruption as the virus impacts supply chains, changes customer and employee behaviour, and creates a liquidity crunch for many firms.
The dominant approach and mindset to prepare for this time horizon is one of cost transformation, efficiency, and cash conservation.
Planning for this time horizon requires immediate preparation for how to get 'back to work' once the lockdown is lifted. This should include putting in place protocols to ensure a safe, compliant and productive workplace.
It also requires getting a sense of how your employees will respond to working under social distancing guidelines and the challenges of returning from their home locations. The latter will be a particularly acute challenge for many Indian manufacturing industries that are dependent on migrant labour. Companies also need to look beyond their factory gates to assess the difficulties faced by key suppliers and identify, evaluate and address potential supply chain risks and vulnerabilities.
Each of these three time horizons requires a distinct mindset and approach.
Starting today, companies need to also begin tracking their customer behaviour and gauge how it will respond to any partial relaxation post the lockdown. This will help identify potential concerns and enable you to design steps to make it safe and easy for your customers to buy your products and services again.
During this period many companies will see a dramatic shift in buying behaviour as customers reprioritise spending decisions and switch to digital channels to minimise physical interactions. Consequently, firms may need to completely rethink their existing go-to-market strategies including product mix, pricing, channel, sales approach, and marketing communication.
After the lockdown eases many companies could be under immense financial stress after suffering weeks of cash burn and little income and facing the prospect of weak and sporadic demand. Therefore leaders should begin building and stress testing an emergency business plan for the remainder of the financial year which considers their cash position, cost structure and financial resilience under multiple scenarios.
Finally, in light of the adjusted targets in the emergency business plan, companies should redesign their sales and operational planning process to achieve them.
Take a new ROAD
The third time horizon leaders must start thinking and acting on is the post-COVID world that will slowly emerge as the health crisis abates.
COVID-19 will likely persist throughout 2020 and perhaps beyond until a vaccine is discovered and a large share of the population is immunised. The companies that survive will emerge to face a very different social, economic and industry scenario.
While it may seem unfathomable amid the current uncertainty, leaders need to start thinking about this longer-term horizon today to position their business to withstand new challenges and seize the emerging opportunities it will present.
Thinking and acting along this longer emergent time horizon requires visioning, strategic insight, and change management.
Companies can start thinking about this time horizon by closely tracking industry developments at home and abroad and modelling potential recovery paths for their industry and their business. They also need to implement competitive intelligence to monitor the evolving strategies, strengths, and vulnerabilities of their competition during the crisis. This can be achieved through activating the salesforce to conduct outreach surveys with customers, distributors, and retailers for example.
To re-orientate the business to seize the longer-term opportunities companies should adapt their budgets and targets by market, customer and product. They also need to position themselves to act on new opportunities that will shape the business in the future and work to improve the organisation's overall resilience and agility to absorb future shocks.
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