We are living in unprecedented and frightening times.
The future of the global economy and social structures are under a tremendous threat from the Covid-19 pandemic which was first reported in December in China’s industrial province of Wuhan. Commonly described as a Black Swan event, almost each and every country in the world has been affected resulting into thousands of infections and several deaths particularly amongst the elderly with underlying health problems. It’s worth noting that the path taken by Covid-19 from China into the current hotspots of Iran and Italy is eerily similar to how the Bubonic or ‘Black’ plague in the fourteenth century spread along trade routes from the Far East, cutting into Persia and finally the Italian port city of Genoa.
The impact that was felt in the middle ages is currently being replicated but at a more significant scale due to the globalized nature of our economy. Global markets have shed trillions of dollars, small scale enterprises have been forced to shut down leaving millions of people without pay cheques and the aviation industry has halted operations due to travel restrictions imposed by governments. Extreme measures such as the ones already put in place are bound to lead to desperate times and possibly social upheaval as humanity struggles to cope with the disease that has already altered life as we know it.
From a business perspective, many thought 2019 was bad – clearly, we had no idea. 2020 is already one of the worst years on record. Even if the virus is brought under control, strategies that were already in place have already been ripped to shreds as institutions will be forced to recalibrate.
In that regard, companies have put in place contingencies to mitigate the dangers of an economic shutdown and to ensure business continues as smoothly as possible. Due to social distancing directives from the Kenyan Government, remote and flexible working arrangements have already been put in place by companies who don’t necessarily have to rely on physical addresses. This new mode of operation ensures that organizations can seamlessly carry out their operations as the fight against the virus rages on.
Another way through which businesses can survive through this tough period is securing the confidence of their clients. This can be done through regular updates regarding how product and service delivery will be affected, maintaining contact with suppliers, reviewing terms and conditions on current commercial relationships in order to deal with logistical challenges. Additionally, due to the reality that employees are the bedrock of client service, being actively engaged in employees’ welfare is critical not only for their own well-being but also to ensure employee-managed supply chains, operations and the like are faithfully executed.
Considering a company's greatest resource is its human resource, employee care is key especially if new responsibilities for the current extreme conditions are being created. The key here is communication – like the relationship between a man and his wife, clear and understood communication is imperative for the relationship to survive.
Another critical issue is maintaining cash flow for the near and long term. Most businesses have cut down on non-essential costs like newspaper deliveries, restricting the use of company of vehicles to essential staff e.g. delivery personnel and as mentioned before, telling people to work from home which will reduce electricity and internet connectivity bills. The upside of the Corona Virus pandemic is in its illumination of non-critical expenditures that Covid-19 has exposed that will assist in the long term cash flow strategy. Do you really need a multi-year lease on a fifteen room office along Riverside Drive or can the company do with a co-working meeting space? Do you need an entire full-time staff or can you move some to be independent contractors?
Finally, stakeholder/investor engagement is crucial if businesses are to survive past the Covid-19 crisis. Business leaders should at the moment be identifying the consequent emerging challenges and develop systems that will track positions daily. It is also important for businesses to identify the short and medium term priorities of their stakeholders. This will help in the development of engagement plans going forward and assess any legal liabilities that may arise.
We do not know how the world will look like from a business perspective once lockdowns and quarantines are lifted. We know at least two things:
1. The business world will never be the same.
2. The businesses that survive either by having robust cash reserves and/or by pivoting and innovating will have a successful decade.
It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change – Charles Darwin.
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