Tuesday 31 March 2020
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newtimes - 7 days ago

Seven key actions business can take to mitigate the effects of COVID-19

We are living in uncertain times. When 2020 started, it seemed a year full of great potential, but we slowly came face to face with Covid-19. Estimating the virus’s effect on the global economy is hard. The SARS outbreak is believed to have cost about US$40 b the economist who made that calculation says COVID-19 could cost three or four times as much. The International Monetary Fund had downgraded its global growth estimates, and the Organisation for Economic Co-operation and Development has suggested global growth could be cut in half as a result of the virus. We’ve already seen massive disruption to supply chains, and widespread closures of schools and workplaces. However, managing a crisis is an inevitable part of the role of a Business Leader. COVID-19 will test many business leaders to the limit. The key to managing any crisis is preparation. Here are seven actions that you as a leader can take to ensure your organization is in the best shape possible to withstand what’s ahead. Review workforce locations and travel. The first priority is to establish exactly where staff is and how many workers are in affected or vulnerable territories. Do any need to be repatriated? Or have they asked to work from home? Upcoming travel plans will need to be reviewed, rescheduled, or canceled. Clear policies should be in place to address absence due to sickness or caring for relatives, the procedure for reporting illness, travel restrictions, the policy for working parents (in the event of lengthy school closures) and tax implications where staff have to remain in a foreign country for longer than expected. Lastly, be prepared to continuously refresh and update these policies as circumstances evolve. Revisit your crisis and continuity plans. Every well-run business has a crisis or continuity plan, and many will have a specific epidemic plan. But nothing tests theory quite like reality. Generic plans need to be adapted and tailored to cope with the specific challenges of a pandemic. If large numbers of your employees have to work remotely for a time, for example, is there enough technology bandwidth to cope? Will your operations be impacted if outsourced? What is the procedure for updating travel advice and policy? How will communication with employees be managed? During any crisis, the biggest worry for CEOs is gathering accurate information quickly. How will data flow during this crisis? Evaluate the supply chain. A clear understanding of your supply chain will help to expose any potential vulnerabilities. This means beginning with the most critical products and looking well beyond first- and second-tier suppliers, right down to the raw materials, if possible. For example, if your products contain a component from a country that becomes isolated, is there a secondary supply? Identify potential points of failure. Who are the teams and individuals on whom critical processes or services depend? Are there workers with the right skills who could step into critical roles if needed? Call centres and shared service centres are potentially vulnerable if the virus continues to spread – can steps be taken to reduce the level of human interaction, such as staggered shifts or remote working? Get communication right. Although we’ve seen employers work hard to keep their workforce informed, disinformation and confusion have spread along with the virus. Your employees (and wider stakeholders) will be looking for reassurance from you that they are being protected and that the business is prepared. Consistency and accuracy of messaging is the key, as is reassurance from the top of the organi your workforce will need to know that their welfare is paramount. Use scenario analysis. With uncertainty rife, and COVID-19 holding the potential to impact every part of a business for months, scenario planning is a critical tool to test preparedness. What are the best- and worst-case scenarios, and is the business equipped to cope? What could be the impact in the longer term, for example, on working capital or bank covenants, or even rents for shops and restaurants if public places are closed? Ask searching questions of your finance team to highlight critical sensitivities. Don’t lose sight of other risks. COVID-19 isn’t the only threat on the horizon – and often organizations are at their most vulnerable when dealing with a crisis that dominates their attention. The many other risks that your business faces aren’t diminished by a pandemic. Cybersecurity, for example, should always be top of mind. We don’t know what the next few weeks and months could bring with the upgrade of the current COVID-19 epidemic to a pandemic. The response window for a crisis is measured in months, while recovery is measured in years. Those companies that are well-prepared will always recover more quickly. For more information, visit the PwC Global Crisis Centre on https://pwc.to/33OjXjR. The writer is Country Senior Partner, PwC Rwanda.


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