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Looking Beyond COVID19 Crisis
25-04-2020
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Looking Beyond COVID19 Crisis

The COVID-19 pandemic is spreading at an extraordinary speed. It has impacted the whole world across the majority of the countries spanning all the five continents. The pandemic has resulted in a total lockdown of countries and areas so-called Economic Hubs in the world – New York, London, Tokyo, Singapore, Mumbai etc.

World Economy was uncertain and it was behaving like a sinusoidal curve since early 2019. Majority of countries had formulated their crisis management to enhance their GDP growth and to bring back their countries on track. The current COVID-19 crisis has arrived as a major shock to the world resulting in serious degradation of the country’s economic platform. The Oil Price war has added fuel to the fire in this context.

Close on the heels of the coronavirus outbreak, the next wave of disruption—the biggest economic shock since World War-II is headed our way. Organizations are the pillars of Economic growth and the current situation has resulted in a huge setback for all industry sectors in a relatively short period of time.

This isn’t just an economic shock: it is a shock to customer behaviours and business models too. The challenges associated with it will be orders of magnitude bigger than what we are used to dealing with. To handle them, you need to adopt an operating model that accommodates the extreme level of uncertainty facing one’s business dynamics. The most effective antidote in such a situation is to put a crisis team in place and are doing all you can to keep your people safe, stay on top of your business, and deal with the uncertainty amid constantly changing conditions. 

However, that isn’t likely to be good enough. Most companies will be very vulnerable to the economic fallout of extended public- and employee-isolation measures.

The organization needs to access the economic impact of the country with the onset of this Pandemic. The strategic actions have to align with the forward-looking inputs in terms of macro-economic scenario.

A brief analysis of Virus spread over the economic impact can be summarized as per fig 1.

            

(Source – McKinsey article April 2020)

As the number of issues your business is facing will likely rapidly escalate, there are two practical steps you can take to help stay ahead. An article from McKinsey suggests a team plan ahead and those teams should be able to work across multiple time horizons. I would recommend going a step ahead and suggest the following plan.

  1. Create a Strategic Thinking Team. ( STT)

    • Team of thinkers who can visualize ahead, imagine and gauge the situation ahead and create a platform to get ahead of the next stage of the crisis.

  2. Direct Work Force Team (WFT) to work across multiple time horizons, using five-step strategy.

    • Multiple time zones infer a strategy for next week, next month, next few months, next year and for the next few years etc., 

(Source – McKinsey article April 2020)

The Function of STT

The STT will help elevate your view above the day-to-day response that your WFT team is managing. Its objective is to enable modular, scalable thinking that any CEO needs to navigate this unprecedented and rapidly evolving situation. The STT team will deliver a STRATEGIC CRISIS-ACTION PLAN to guide and accelerate top management’s decision-making process.

Military organizations, which specialize in dealing with large-scale crises, often establish granular structures accountable for highly specific tasks, such as operations, communication, and intelligence gathering. However, there will be STT teams for key decision-makers to leverage when dealing with complex and escalating sets of issues.

The STT team should be charged with collecting forward-looking intelligence, developing scenarios, and identifying the options and actions needed to act tactically and strategically. Unlike a typical strategy team, it will have to plan across all time horizons (two, four, and seven days; two and four weeks; one and two quarters; one and two years; and the next normal) to enable to stay on top of escalating issues and the decisions that one may need to make in this time of high uncertainty. 

This team delivers scenarios, recommendations for actions, and trigger points to the CEO and the management team so that they can decide on the right course of action. The decisions will be communicated to the WFT or other parts of the organization for execution. If further clarification is necessary, they will do another turn, collecting further information to reduce uncertainty.

Importantly, the structure of the STT should be modular, with individual cells focusing on specific issues across time horizons. As new issues come up or time horizons expand, the team may need to add new cells. This will enable the team to scale in line with the magnitude of the crisis. 

Execution of STT Actions:

The best response to navigating through the COVID-19 crisis and the subsequent recovery will differ based on a company’s circumstances. For some, simply staying calm and carrying on will be the optimal approach. Others may need to undertake radical restructuring of their cost bases and business models immediately. 

To produce a combative plan, you need to confront uncertainty head-on. Borrowing from the McKinsey article, the STT team needs to work through the following five steps:

  1. Formulate a realistic view of the current situation

  2. Design various scenarios for multiple time zones.

  3. Establish a broader spectrum of the strategic path.

  4. Determine actions and strategic moves that are robust across scenarios.

  5. Set trigger points that drive the organization to act at the right time.

The overall essence should be SPEED. The STT team must move fast, should start giving day-one answer tomorrow, and iterate at high velocity. If new issues or opportunities come up, add modules for your WFT team; never there should be a slowdown. The next few weeks and months will shape the future of the company—and possibly, the respective industry segment as a whole.

Written By



Purushotham Gururaj

Mr Purushotham Gururaj – Chief Business Strategist at P2P – Business Solution Providers, is a renowned certified Lean Six Sigma Master Black Belt with over 35 years of Industrial experience at various Senior Management Levels. He was instrumental in introducing several innovative management concepts with an aim to impart effective conceptual changes across organizations both in India and at the global level. He is a regular guest speaker at various Manufacturing Excellence forums and a leading consultant to both Engineering and FMCG organizations.

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