"Even if the impact of the COVID-19 pandemic varies across industry sectors and regions, it is no exaggeration to recognize that the struggle is real,” said Marivic Españo, chairperson and chief executive officer of P&A Grant Thornton.
The coronavirus disease 2019 (COVID-19) pandemic is a world-changing event. For many business executives, the toughest leadership test is how to deal with the coronavirus crisis and its aftermath.
For business leaders across the Philippines, the actions they take now and in the weeks ahead — especially as quarantines are modified or loosened — will define them and their companies. “Even if the impact of the COVID-19 pandemic varies across industry sectors and regions, it is no exaggeration to recognize that the struggle is real,” said Marivic Españo, chairperson and chief executive officer (CEO) of P&A Grant Thornton.
CEOs working urgently to balance dozens of critical priorities each day are starting to focus on two leading questions: “How can we navigate through the crisis to emerge stronger than others in our industry?” and “How can we learn through this experience to win in a new world?”
As economic life appears to stabilize, organizations need to be ready with the right strategy to outperform their industry peers. Companies that adopt more quickly to the initial transition — and, eventually, to the new environment — will emerge stronger.
However, this recovery will be different. Factors such as how widely different markets bounce back or whether people are forced back into quarantine with subsequent outbreaks of COVID-19 complicate the picture. Knowing what will happen next is impossible. However, it is possible to consider the lessons of the distant and recent past when thinking about the future.
The following elements will be essential in shaping the new norm — and business leaders will need to come to terms with them: workforce, capital and resources, operational model, and supply chain.
During these uncertain times, businesses must assess their plans and realign their activities to adapt to the new rules prescribed by the government. “Businesses must be willing to try new practices, switch to better tools, and update action plans for the short, medium, and long terms,” said Ms. Españo. “Updated processes will help businesses adapt to a changing market and set them on track to a brighter future,” she added.
Capital and resources
Pre-COVID-19, cash budgets were calculated monthly. Since the coronavirus crisis, however, organizations have been reviewing their cash assets as often as weekly. How do you budget your organization’s cash during such times? First, project your accounts receivable realistically and review other cash sources. Next, list down all your expenses and other cash outflows. Finally, analyze your accounts payable to suppliers, taxes, and payroll from the previous period.
Rethink your operational model and allow the business to adapt. In the long term, think about implementing process automation and integrating technology into operations. When reviewing business activities, consider the shift to Industrial Revolution 4.0 or digital transformation. “Set new business goals with such changes in mind, make informed decisions, and take advantage of every opportunity. Dare to innovate,” said Ms. Españo.
When a crisis such as COVID-19 hits, organizations need to reinforce their supply chain to continue meeting customer and client demand. Securing your supply chains is paramount. It is done by assessing the situation quickly and then moving forward with an action plan aimed at preventing problems and implementing solutions. Monitor inventory levels as well by establishing critical inventory thresholds and building stockpiles, as needed. Likewise, strengthen relationships with customers by finding alternative shipping methods, adjusting delivery schedules, and being transparent about your challenges. Lastly, cement supplier relationships by controlling your cash flow and negotiating payment terms.
The uncertainty that is this far-reaching makes it challenging to control the challenges at hand, let alone in the years ahead. It is imperative to reconstruct for the future and not solve the problems of the past.
Companies have begun to consider their return to health. For most, the pre-pandemic business as usual won’t be nearly enough. To move beyond survival mode, organizations need to think beyond their defaults, reimagining how they recover, operate, organize, and use technology, setting the foundations for sustainable success. In a twist of irony, a crisis like this coronavirus pandemic brings new opportunities and should be a trigger to explore new directions.
As published in BusinessWorld, dated 21 May 2020