The spread of the coronavirus disease 2019 (Covid-19) is both a global humanitarian and economic concern. As the impact of Covid-19 continues to grow worldwide, there are implications for the wider economy, businesses and employment. All industries face significant disruptions to their supply chain, workforce and cash flow. Business leaders now find themselves on the front lines of the pandemic. While there is uncertainty in many aspects of this public health crisis, for businesses it is clear that resiliency, agility, planning, empathy and preparedness are all important factors, today and in the future.
Building resilience gives companies a competitive edge. But what does resilience really mean? To quote American futurist Jamais Cascio: “Resilience is all about being able to prevent or overcome the unexpected. Sustainability is about survival. The goal of resilience is to thrive.”
Resilience should be embraced as good business sense, rather than applying it simply to survive through protective measures, including the Luzon-wide enhanced community quarantine.
Just how important is business resilience? Customers value reliability. Firms are able to reinforce resilience as a core principle of their brand, and demonstrating its application would result in increased retention and attraction. The credibility of an organization and its leadership team is directly enhanced by its resilience. Institutions seeking to evolve their product offerings and operational infrastructures to drive growth rely on a resilient foundation, allowing resources to be focused on transformation, rather than mitigating risk.
There are clear and common benefits for companies to become operationally resilient. Here are some key areas to focus on:
– Workforce. Review your key internal policies. These include your sick pay system, health and safety rules, travel policies and how your employment contracts would cover forced absences from work. Employees need to know where they stand. They trust messages from their business leaders, so tone, accuracy and relevance can make all the difference. Clearly communicate what your people should do if they feel unwell and tell them what is happening with travel bans, sick leave, work-from-home, hygiene measures, annual leave and strategies to keep the business operating effectively.
– Customers, suppliers and stakeholders. Make sure you plan for the unexpected consequences of the Covid-19 pandemic for your business. Think about whether you would have working capital when activity picks up. Inform your clients of any change in your services. Customers may need extended terms from you, and some suppliers might require different arrangements. Communicate early and often with your suppliers and check on your stakeholders. Note, too, that a supplier’s supplier may face issues that have a knock-on effect on your business, so do your research carefully.
– Tax and audit. With Covid-19 having an impact on your profits and cash flow, you may need extra time to pay any outstanding tax debt. Ask if your business could get a loan or grant to see you through the worst of the pandemic. Think if employee absence could cause you to miss a deadline. Coordinate closely with your external auditors and make arrangements for an audit using a virtual (offsite) approach to whatever extent possible.
– Business continuity. Despite the existence of business continuity plans, Covid-19 has exposed gaps. You need to check if you have sufficient resources and supplies to outlast the pandemic and whether you have the space to store them. Prepare for shortages and price volatility in goods not for resale. Ensure that your cyber risk policy is up to date and has been communicated to your employees. Your information technology network needs to have the capacity and bandwidth for your whole team to work from home at the same time.
– Cash flow and insurance. With changes and delays to your service, as well as falling customer demand, cash flows may be strained. If so, speak early to your funding suppliers about additional headroom and relaxing terms and conditions. Take a look at the insurance cover you have and whether you have a legitimate claim for this kind of disruption. Similarly, perhaps a successful claim could be made against your business for the cancellation of services or goods.
– Remain optimistic. The mid-market has always been uniquely resilient and companies are used to preparing for business interruptions. Those that can develop plans and successfully bolster themselves will be ready to rebound once the pandemic eases. If you’re working on how to adapt to the evolving crisis and have questions about the impact of Covid-19 on your business, you can discuss your concerns with professional business advisers.
– Monitor the situation. The pandemic continues to evolve and advice to businesses on how to respond is constantly updated. Make sure you keep yourself updated with credible news sources and regularly speak to your business advisers to discuss concerns and mitigations on your business.
“It was the best of the times, it was the worst of times,” says the narrator of Charles Dickens’ 1859 novel A Tale of Two Cities. While many say we are also going through an economic pandemic, I strongly beg to differ. Consider the Covid-19 crisis an opportunity to evolve and optimize capabilities, to “future fix,” to create more effective operating models and to thrive. In fact, now is the best time for business leaders to put plans to the test. Now is the best time for organizations to focus on building business resilience.
Mailene Sigue-Bisnar is a partner and head of the Markets Group of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory and outsourcing firms in the Philippines, with 23 partners and more than 900 staff members. We’d like to hear from you. Tweet us: @GrantThorntonPH, “like” us on Facebook: P&A Grant Thornton, and email your comments to firstname.lastname@example.org or email@example.com. For more information, visit www.grantthornton.com.ph.
As published in The Manila Times, dated 01 April 2020