COVID-19, what can companies do to face this challenge?
The Coronavirus is a big world challenge, considered a Pandemic by the World Health Organization. Today, thousands of people encounter the challenge to fight this disease, health professionals face the unknown many times in deficient technical and material conditions, and millions of people face restrictions to their liberty of movement and action, being even in quarantine.
Beyond the dimension of the public health, COVID-19 is, and continues to generate, very significant economic effects that will lead to a strong economic slowdown. The total impact isn’t calculable, it will depend on the world’s capacity to contain and destroy the disease, of the time that it will take, the time that may be necessary to regain the confidence of consumers, and also to stimulate the economy that institutions give.
The intention of this article is to present a set of ideas that can feed entrepreneurs reflection, on how to manage a crisis scenario. There won’t exist two realities exactly the same, however, a learning of how companies acted, for example in China, will certainly enrich this important reflection.
I am going to present now various ideas that companies can follow, and they will be divided in three big areas: employee protection; business management; Social Responsibility.
Despite the effort, using the most credible and qualified sources, this article will only be a small contribution for this process.
Employee Protection
The response to this challenge implies sever changes to society’s lifestyle. Maintaining the same operation model is no longer an option for companies. The active role of companies to fight the propagation of COVID — 19 is fundamental. There are various measures that companies can establish to protect their employees:
1) Create an internal management team of COVID-19 responsible for implementing and managing measures, and guaranteeing a clear and bidirectional communicationabout the subject inside the company, to guarantee not only the combat against the transmission of COVID-19, but also to ensure the emotional comfort in the performance of their functions;
2) Development of a contingency plan that includes measures of crisis management for the situation, such as training sessions about COVID-19 for employees, the implementation of materials disseminating the measures, or the use of social networks (WhatsApp, Messenger, etc.) to guarantee a good internal communication;
3) Reinforce the hygiene of installations, increasing the cleaning service of the company and creating routines of frequent hand washing of the whole team;
4) Promotion of good breathing hygiene in the workplace promoting the minimum distance of a meter between employees when establishing contact, avoiding agglomerations of people, for example altering the practice of meals in canteen for catering in the workplace of each employee;
5) Restricting employee trips, and in essential cases, promotion of the precautions they should have.
6) Promoting the principle of voluntary monitoring of temperature of employees, defining the rule that nobody with more than 37,5C will work or continue to work in the work place.
7) Definition of an isolation area inside your company, so when somebody has symptoms they can be taken there, while you contact the health area authorities and wait for instructions;
8) Change to telework the maximum of people inside the company, to minimize the possibilities of contagion;
Business Management
The impact of COVID-19 in the economy has a lot of unpredictable, but it will certainly be very negative. Inside this impact there are sectors more exposed that will suffer bigger consequences in terms of demand, such as tourism or air transportation, in other sectors this will happen less due to their demand being permanent, such as for example the food sector.
The challenges however aren’t from the point of view of the market, but will occur from the exposure of companies to problems inside the value chain of the sector, facing various times situations of absence of raw material, or even a distribution system.
A set of ideas for business management will be presented in this scenario:
9) Looking at the future and permanent planning. In this unpredictable context, knowledge and information updating should be daily, having the objective to allow the best decision making about production, distribution, financial management, etc. Reality will be in constant change, it will be different from market to market, and different in time because of the different stages of development of COVID-19, and also according to the legal measures that are implemented;
10) Safeguarding company’s financial liquidity to face difficult months. Depending on sector to sector, and even geography, companies globally will face strong challenges of liquidity. In this scenario, companies should draw and update permanent economic and financial scenarios that take in consideration that cost of production that may suffer changes, the impact on revenue due to the decrease of demand, and also charging and payment times to be executed.
Moreover, maintaining contact with financial partners to study the existent financial options, or new that may exist to respond to this challenge, might be fundamental.
Good control of these variables will be key to maintain the viability of the company, and the existing jobs.
11. Think about reduction of fixed costs. In this exceptional difficult phase, there can be space for agreements with providers that allow the reduction of fixed costs during a specific period of time.
It can be with landlords in case of eventual renting of properties, or covenants with accountants, lawyers, etc., or there can be suspension or reduction of temporary costs, that help to balance the bills during the crisis period;
12) Manage with flexibility and creativity human resources. There will be sectors with total stagnation or almost total. There will be others that will have a peak of demand, for example the food sector, or the health sector. Companies should look at their teams, and in the cases that have resources that are under-utilized thinking should be placed to allocate them to activities that may create value, as planning activities for post crisis recovery. Another possibility is cooperation between companies that may have a peak of work in the phase, reinforcing their teams temporarily.
13. Stabilizing a value chain. In this scenario value chains will suffer instability, which will depend on implemented measures of each country, and the respective evolution of the local situation, and national and international logistics.
Attending to this reality, companies should plan constantly their purchases, trying to strengthen their resilience by enlarging the network of potential providers and clients, and also the management of stocks.
Permanent contact with the logistic sector will also be fundamental;
14. Testing and applying technology and remote work procedures. This measure has a double character, it protects the employees, and allows the company to achieve a new resilience for the scenario in which restrictions to movement of employees are established, and they really have to remain at home.
Develop a culture of remote work, the processes of collaboration in this context , and the use of digital tools, not only will contribute to the companies productivity, but will also create a new competency with value for the future;
15. Ponderate the transition of business to business (B2B) to business to consumer (B2C). Many companies face serious difficulties in selling to other companies that also face drastic reduction of demand. To mitigate the reduction of demand, and attending to the presence of people at home and normally more connected to the internet, digital marketing directed to the final client might be a good implementation for some sectors of activity, especially when articulated with door to door distribution;
16. Search opportunities in adversity. In the Chinese case many segments of the market increased their sales, particularly the ones related to home delivery businesses, but also areas of digital marketing, or of hygiene products. Companies’ capacity to adapt can allow the achievement of new markets and to complement the business.
It’s important to consider that this reality, so intense for consumers and companies, will generate new needs and habits of consumption. In these changes there will be new and potentially good opportunities for the recovery phase of economy;
17. Reinforce the involvement of employees. Companies and its employees face financial risks. Most companies will face large difficulties to honor their commitments, maintain jobs, and it’s viability in general. To preserve the economy, the collaboration between companies and people is fundamental, having commitments from each side, that with necessarily be difficult for both.
For example, when production isn’t possible, counting these days for employee holiday days should be a measure to be considered by each part. Another idea, more extreme, is the possibility of part of salary payments to be done in equity of the company. This measure allows not only to finance the operation of the company, as well as to increase the sense of belonging of employees.
18) Extract learning from this situation. After a response to the crisis it is important for companies to reflect on what they discovered to be best and worst in their organization, and where conclusions established now may be important.
Social Responsibility
As an entity, it competes to companies in first place to protect their people, and this way as well their families, but also to protect their business, guaranteeing as much as possible that after the public health crisis that we face, economy may maintain jobs, to minimize the economic crisis that will follow.
Beyond these priorities that are considered already business social responsibility, this is an impair moment in our contemporary history, in which also our companies, especially the most capable, have a fundamental role in facing this pandemic.
Sharing here some ideas:
19. Demonstrate purpose. Companies are stronger when communities are also. At this moment, companies should think how to participate in response to the emergency, by sharing know-how, resources, or equipment;
20. Participating in global efforts of health care of people that normally have difficulty in financing the acquisition of new equipment and other devices. Especially at a local level, companies should reflect, in articulation with the health sector authorities what they should define as needs and acquisition priority, if they can have a role in the financing of equipment needed for the care of the population;
21. Many are the economic sectors that are essential for the security and comfort of people and the organizations (food, energy, distribution, etc.), and even for the good functioning of the global response to the emergency. The companies should ensure their role inside these import value chains, but should have special sensibility towards more vulnerable and unfavorable groups, such as the elderly or people with risk factors, adjusting their offer, offering this way new services that take in account special needs;
Final Message
The economic crisis that Coronavirus is generating will result in the loss of many jobs, even the closure of many viable companies. The extension isn’t possible to estimate in this phase, however, how this was originated by a public health phenomenon; we also expect that the economic recovery to be substantially quicker than the one the world faced after 2008/2009.
This is a time that all of us are too little, but that all together we are worth much more. Businessmen and entrepreneurs will certainly be fundamental for the world recovery of our security, health and contemporary lifestyle.
Best Wishes!
· Being a new and unpredictable phenomenon the content of this article should be understood as ideas formulated in the context of information available on 15/03/2020, it should be updated continuously with the evolution of reality.
· This article should be understood as collaborative, so new ideas, improvement suggestions, or complementary content is welcomed, and will be used on updates for the benefit of readers.
· Special thanks to Melanie Cardoso for all the support that allowed this version of the article.
Sources:
Entrepreneur.com
Harvard Business Review
Mckinsey & Co
World Economic Forum
World Health Organization
