COVID-19 – we are in for a reality check
As the new coronavirus is spreading all around the world, and governments are taking measures to mitigate against its further advancement, businesses are closing their offices and plants with management sheltering in their home to keep the virus at bay. It is natural at this time to have people reflect on their own lives and on their relationships, as their life routine has been broken and as they adapt slowly, week after week, to social physical isolation.
Businesses have new tools and new methods to cope if not manage, at least temporarily to such a crisis. But business owners and managers are also thinking of what their business would look like after the pandemic subsides. Governments are announcing economic measures that partially support companies during the period of closure. The whole landscape of economies will change, with governments suddenly becoming interventionist, and private business struggling to find again its identity.
I can imagine what is going on in the minds of business decision-makers during this delicate period. I can make a few observations on what business should be mostly reflecting upon now that the crisis plan is at an implementation stage.
My first concern will be: how relevant is my business after all, when people, our customers, could do without it for weeks? We start distinguishing between what we consider to be essential and what is desirable. And even when considering what is desirable, how much is it desirable, to what extent? Consumer behaviour will change as attitudes will change. Will the purpose of my business as I knew it before the pandemic remain to be the same?
We never thought that our businesses and the way we went about it, was so vulnerable to outside, uncontrollable forces. We might have considered the standard risks and have risk registers and management systems, but we never thought that these could melt away within twenty-four hours when revenues drop to fifteen percent of what you are used to, or even zero.
We suddenly realise that our business was bloated with excessive costs, spiralling wages and salaries, unnecessary office gadgets and bureaucratic routines that were hidden by the margins we were making and our profitability. We were surrounded by inefficiencies that we were not seeing despite we employed the best engineers and competent managers and engaged the most reputed consultants. We were living in a bubble and we did not know it.
The crisis is testing our relationships with our employees, suppliers and other stakeholders. What comes up first on our minds and when discussing our crisis plans with our senior managers? The loyalty we were expecting from our people over the years is overshadowed by an instinct to survive and we are making up lists of employees who we can do without, others that are having their wages cut or days of the week shortened. Suddenly, we are seeing things upside down and mission statements and quality charters are being pulled down from walls in the name of survival or convenience.
Some companies might have given corporate social responsibility some thought during normal times when their revenue statements were healthy, and their balance sheets had a line for reserves. A commendable step if done with a sincere desire to be relevant to the community and society. This could be the good starting point for the future.
As businesses rethink their purpose, redesign their business models and re-jig the processes for the future which will be different, they should reflect on their purpose by being genuinely concerned in what they are providing as a product or a service, correct in their relationship with their employees and doing this in the full understanding of the benefits one gets when keeping the common good in focus.
About the author(s)
Joseph F.X. Zahra is a Malta based economist with over thirty five years of corporate leadership and business consultancy experience.