Asia-Europe trade deals drive momentum for SME recovery By Kawal Preet As economies worldwide respond to continued waves of the COVID-19 pandemic, there are positive signs in markets across Asia, where cross-border commerce is trending positively against the backdrop of the health crisis. This is [...]
By Nilanjan Raghunath and Durriya Nadeem
Practical and essential insights for businesses with the drive to survive.
We are facing an unprecedented global crisis, where normal life has stopped for the world’s vast population. Like all crises, this too will end, and there has been plenty of chatter about the ‘new normal’ after COVID-19. But what does this ‘new normal’ mean?
Businesses, in particular, have had to make many tough decisions and will continue to have to do so as they navigate through uncharted territory. No industry has emerged unscathed from the disruption of COVID-19. Many businesses did not survive the first wave and ensuing lockdowns; many more are still struggling to retain their workforce and keep productivity up. As subsequent waves recur the world over (Hong Kong, for example, is on its fourth wave since the onset of the pandemic), what actions can business leaders take to keep themselves operating in the post COVID-19 world?
Putting employee safety first
At the most basic and immediate level, CEOs need to consider several factors when planning employees’ return to the workplace. Primarily, they need to evaluate the timing as well as the number of employees needed to keep things operational, while minimizing the risk to staff (PwC).
This comprises increasing remote work and decreasing the need to commute to offices, shops, or manufacturing facilities. The health and safety of employees should be the topmost priority. Practical steps like deep cleaning and daily sanitization of the office have to take place. The use of face masks and gloves has to become mandatory with immediate effect.
An even more effective move would be redesigning the office space: moving workstations farther apart and implementing pre-defined employee rotations to limit the number of employees present at one time. Such changes have already taken place in companies like Google as they begin the process of reopening offices. Some workplaces may also consider utilizing technology to facilitate contact tracing and communication with employees who need to self-quarantine due to suspected exposure.
Changing business models
Once protocols to safeguard health are in place, the focus can be shifted to the business model. In the words of Jo Scarlett, the ‘kryptonite’ of this pandemic – uncertainty – has both challenged and unleashed human ingenuity (PA Consulting). Innovation and determination need to be mantras for any companies wishing to survive and eventually succeed.
History has proven that companies that invest in innovation during a crisis surpass expectations in the recovery phase. Five years on from the Great Recession of 2008, consumer packaged goods (CPG) leaders who had an innovation agenda were able to outperform the market by 20% in the recovery phase (McKinsey).
With consumers gradually returning to public spaces, major brands need to use this time to design consumer experiences that suit customer preferences. Based on the current situation, they need to decide which projects to pause and which to accelerate. For example, Amazon’s grocery business has expanded by 45% in the U.S. and 80% in the U.K. This is likely to increase in the coming years, and ecommerce will play a bigger role for brands with products that can be retailed online (PA Consulting).
Moreover, to prepare for the coming era, companies will need more strategic forecasting and planning abilities. According to an EY survey, organizations need to revolutionize how they forecast. The first step is conducting analyses of consumer behavior and spending patterns – which ones are here to stay, and which are short-term. Key risk areas for the company need to be highlighted, e.g. customer preferences, opportunity costs, capital limitations, supplier instability, cost instability, etc.
Secondly, businesses need to integrate improved business forecasting methods into their operations. Pandemics bring about a lot of uncertainty, and previous information or data may be of limited value in current times.
For example, one respondent company in the EY survey strengthened its sales data and eventual forecast by using metrics like cell phone tower data, local unemployment statistics, and social media hits on its product. These measures then underwent a regression analysis to identify causation patterns and improve forecasting.
More advanced artificial intelligence (AI) networks can also be used if enough data is available. But data alone is insufficient if not shared within organizations in a timely manner. Centralized dashboards allow data to be regularly updated and keep key decision makers up to date. With all the facts (and real-time changes) immediately at hand, businesses can make more accurate forecasts (EY).
The bigger picture: changing regulations, industries, and standard practices
The new normal has brought to the forefront the urgent need for all sectors and companies, big and small, to restructure their business models, supply chains, and human capital. Different industries have been hit in varying ways and need to design their “respond, recover, and thrive” strategies according to the unique impact on their specific sectors (Deloitte).
For example, the decreased demand for leisure and business travel has greatly affected the travel sector. This sector also has to contend with reassuring employees who fear redundancy, promoting new health standards required by the government, and assuaging customer worries.
At a supply chain level, businesses will need to come up with alternatives to their key suppliers, as many are likely to shut down (Deloitte). Travel companies will have to manage budget constraints and pandemic uncertainties by renegotiating some policies – for instance, asking customers to travel later using a credit note or voucher. Of course, this will necessitate a lot of reorganization for all parties: customers will need to reschedule vacation time, and companies will have to revise conditions for both direct bookings and those made through partner platforms (CBI).
While working on business models and safety standards, putting people first should not be forgotten. To recover from this crisis, investments should be made in people, not just businesses (Parliament Magazine). A prime example is gig workers.
The lockdown saw a surge in online ordering: delivery workers were constantly on the go, delivering food, equipment, clothes, medicines – pretty much anything that can be ordered. Yet these workers are not considered employees who can avail benefits like health insurance. The irony cannot be lost in the midst of a pandemic, where just breathing next to another person is risky.
These kinds of companies claim to be only matching supply and demand in a bid to shirk financial responsibilities for their frontline workers. Given that companies like Uber and Amazon can track riders’ every move, how can they call these workers self-employed?
In light of these concerns, there’s been a growing call, in Europe especially, for technology giants to step up and give these workers legal status as employees, and the corresponding benefits (Parliament Magazine).
Finally, a people-centric approach involves treating each employee differently. This uncertain situation has not been easy for anyone, especially those who experience complications in their personal lives: childcare responsibilities, elderly parents, spouses with conflicting schedules or health issues. Companies need to show they care and listen to their employees (FM Magazine).
This may sound like asking for too much, but it does pay off in the long run. No one expects their employers to solve all their problems, but empathy shown in testing times goes a long way toward appeasing employees and making them feel valued. Giving employees work flexibility is essential. Among many other discoveries, COVID-19 has shown us that working from home or having flexible hours does not diminish productivity.
COVID-19 is a global transformative event that has changed the way the world functions. Companies need to prepare for this through caring for their employees, redesigning the workplace, taking coronavirus precautions seriously, and working around changed consumer experiences. It began as a health challenge, but is now an economic challenge as well. This pandemic won’t be going anywhere soon – humans have learned to adapt to it, and businesses must follow suit.
About the Authors
Nilanjan is an Assistant Professor of Sociology. Her research interests include Sociology of Work and Social Stratification in the 4th Industrial Revolution. She teaches Digital Sociology, Gender Sexuality and Society, Shaping Futures and Sociology of Social Networks and Social Capital. She won the Teaching Excellence Award in 2014. She is a AHE Fellow (2020) and has a higher education teaching certificate from the Harvard Derek Bok Center (2020). She has a forthcoming book in McGill Queens University Press on Millennials and future of work. She currently works at the Singapore University of Technology and Design.
Singapore-based Durriya is a professional editor and freelance writer. She has an undergraduate degree in sociology and anthropology from LUMS (Lahore University of Management Sciences) and MPhil in development studies (Lahore School of Economics). Having worked in several USAID development projects, she now focuses on research writing and academic editing.