5 lessons from China on how small businesses can rebound from an epidemic like COVID-19
As COVID-19 continues to spread around the world, the measures implemented in China may be instructive for other countries now struggling to control the virus. Hangzhou, the capital city of Zhejiang Province, more than 1,000 miles away from Wuhan, the epicenter of COVID-19, implemented multiple control and prevention measures from the very beginning of the outbreak.
Here’s what we should learn,
1. Look ahead and constantly reframe your efforts.
In China, some of the fastest-recovering companies proactively looked ahead and anticipated such shifts. For example, in the early stages of the outbreak, Master Kong, a leading instant noodle and beverage producer, reviewed dynamics on a daily basis and reprioritized efforts regularly. It anticipated hoarding and stock-outs, and it tilted its focus away from offline, large retail channels to O2O (online-to-offline), e-commerce, and smaller stores. By continuously tracking retail outlets’ re-opening plans it was also able to adapt its supply chain in a highly flexible manner. As a result, its supply chain had recovered by more than 50% just a few weeks after the outbreak, and it was able to supply 60% of the stores that were reopened during this period — three times as many as some competitors.
2. Use an adaptive, bottom-up approach to complement top-down efforts.
For example, Huazhu, which operates 6,000 hotels in 400 cities across China, set up a crisis task force that met daily to review procedures and issued top-down guidance for the whole chain. In addition, it leveraged its internal information platform, an app, to make sure employees and franchisees were armed with timely information. This allowed franchisees to adapt central guidance to their own local situations, in terms of disease conditions and local public health measures. (Link it with our to-do’s to follow)
3. Proactively create clarity and security for employees.
In a crisis, it’s hard to find clarity, when the situation and the available information are constantly changing, driven by the exponential logic of contagion. For example, China’s largest kitchenware manufacturer Supor instituted very specific operational guidelines and procedures for its employees, such as instructions for limiting exposure while dining in canteens and emergency plans for abnormal situations. In addition, the company instituted health checks for employees and their families from the early stages of the outbreak and procured preventative equipment. It was well prepared for a timely resumption of work, reopening some production lines in the second week of February.
4. Reallocate labor flexibly to different activities.
For example, in response to a severe decline in revenue, more than 40 restaurants, hotels, and cinema chains optimized their staffing to free up a large share of their workforces. They then shared those employees with Hema, a “new retail” supermarket chain owned by Alibaba, which was in urgent need of labor for delivery services due to the sudden increase in online purchases. O2O players, including Ele, Meituan, and JD’s 7Fresh followed this lead by also borrowing labor from restaurants.
5. Use social media to coordinate employees and partners.
With remote working and a new set of complex coordination challenges, many Chinese companies took to social media platforms, such as WeChat, to coordinate employees and partners.
For example, Cosmo Lady, the largest underwear and lingerie company in China, initiated a program aimed at increasing its sales through WeChat, enlisting employees to promote to their social circles. The company created a sales ranking among all employees (including both the chairman and CEO), helping motivate the rest of the staff to participate in the initiative.
Undoubtedly more new lessons will emerge from China, Korea, Italy, and eventually, the U.S. Companies that adopt a high-frequency approach to learning, codifying and applying lessons from other regions will be better able to protect their employees and business. Indeed, in a fast-changing, volatile world, such an adaptive approach should be applied more broadly beyond crisis management.