The crisis being experience due to the COVID-19 pandemic, like any crisis, will have a number of distinct phases. Knowing what to do in each of these phases will be critical to sustainability.
The crisis resulting from the COVID-19 pandemic is unlike any seen in living memory. Borders are being shut, businesses closed and people are being told to stay at home and keep away from others. The impacts on our health, economy and society are only just starting to be felt.
With all the uncertainty and change happening it can seem overwhelming. Leaving many unsure of what to do next or where to focus their efforts.
From a business perspective, many boards and executives are faced with new ways of working. The normal business theories don’t seem to apply anymore. Roles are becoming less clear with some unsure of where the distinctions between board, executive and staff lies in this new world.
However, while the pandemic and response is something never before seen on a global scale, it is likely to follow a similar pattern to most other forms of crisis. Once all has settled down, we are likely to see three distinct phases:
Each of these phases has distinct characteristics and require different actions for survival.
This is the phase that occurs before the crisis emerges. For more typical crisis events (such as floods, extreme weather events or loss of business continuity) this is the phase where boards and CEOs do some initial planning and risk mitigation.
Unfortunately, COVID-19 is such an extreme event that businesses have not done any preparation for anything like this. Just a few months ago it would have been considered ludicrous to plan for shutdowns on a global scale like we are currently experiencing.
There may, however, be some preparation that business can draw on. Many organisations will have gone through some form of strategic planning process late last year. As part of this process boards and executives are likely to have looked at the performance of their business and identified areas for improvement.
It would be worth quickly reviewing this analysis to determine how any weaknesses might be heightened by the current crisis. It is also helpful to determine if any new vulnerabilities have emerged.
This is the phase immediately after the crisis has been triggered. It can last a few days to many months depending on the nature of the crisis. It requires rapid response, decisive action and clear communication, much of which is done with limited and changing information.
This is the phase we are in currently. We are receiving constant information and often conflicting expert advice and predictions. Things are changing rapidly and the business impacts are yet to fully emerge. When in the midst of this phase it is impossible to determine how long it will last but it is likely to be many months.
The aims of boards and executives during this phase should be to stabilise the organisation as much as possible, gain a level of focus and control and, finally, prepare the organisation for the inevitable transformation that will be required in the next phase.
The key steps that should be taken are:
- Safety and wellbeing. First and foremost, leaders need to ensure the safety of their people. This relates not only to physical safety and protection from infection, but also the safety of their mental health. Remote working and isolation can have significant impacts on staff wellbeing and morale and employers need to consider how best to support staff.
- People. Consider also how the organisation could be impacted if a staff member gets ill. What happens if the CEO can’t work? What happens if an employee falls ill and the factory/ warehouse/ shop needs to close? To the extent possible have a contingency plan for these major potential events.
- Cash flow. Cash is king and even more so during a crisis. Prepare and start tracking a short-term cash flow. Typically, this will be a 13-week cash flow projection and may need to include a range of scenarios. Consider where cash flow uncertainties exist. How certain are the inflows? Can any of them be brought forward? Can any outflows be deferred or avoided? Do you need to talk with any of your customers, suppliers or financiers?
- Suppliers. Your suppliers will also be experiencing significant distress at present. Identify the business-critical suppliers and discuss how best to work through this crisis. Determine if alternatives exist.
- Customers. Similarly, you need to get some certainty around customers. Which ones would consider your business a critical supplier? How will you respond if customers seek deferred payment terms? Can you still deliver on your value promise to customers?
- Operations and Processes. A lot of work will have to be done differently for the time being. However before simply asking people to carry on doing the same things whilst working from home, consider what tasks are critical, essential or unnecessary and adjust work flows accordingly. Consider also what other tasks may need to be done (such as short-term monitoring and reporting). Where work can’t be done remotely consider what other changes might be appropriate, such as splitting into shifts.
- Positioning for transformation. As the emergency phase begins to reach a conclusion, consider how the organisation can best be positioned for the transformation phase that will follow. This will include reflecting on the response to date to consider what has and hasn’t worked, how customers and suppliers have changed and what new ways of working have emerged.
Crises, particularly those on the scale of the COVID-19 pandemic, lead to lasting changes. The current crisis will see lasting changes to our societies, the way in which businesses operate and how we understand the nature of work. Those organisations that are quickest to adapt to the new normal will be the ones that thrive into the future.
The transformation phase may last many years and it is the period in which organisations will consider new business models, new products and services and new ways of engaging. As they enter this phase boards and executives need to consider what parts of the business need to continue. What will we take into the future? What aspects will we leave behind?
A crisis can also expose some underlying vulnerabilities and inadequacies in an organisation. These may have been managed through the emergency phase, however they will need to be fully addressed during the transformation phase. This may require significant change to the way things are done or even the very nature of the business itself.
For a business that has been positioned well through the emergency phase, this final phase represents an opportunity to strengthen and grow the organisation and create a more prosperous future.
A crisis can seem overwhelming and unmanageable when you’re are in the midst of it and the COVID-19 pandemic crisis is certainly challenging all of us. It is impacting us socially, personally and professionally. There is a lot to keep on top of and leading an organisation through it is challenging.
However, it is also a challenge being shared by all. There is no single correct path, but by staying calm and focussed and not overcomplicating your approach the crisis is manageable. Don’t be reluctant to seek help and support as needed and be alert to the new opportunities that will emerge.
A summary of the different focus areas during the emergency phase of the COVID-19 pandemic crisis. Each area should be addressed however the level of focus and timing will vary as the crisis unfolds.