The Black Butterfly has already reshaped our Planet.
It was not a Swan this time but a chaos Butterfly…. History may highlight in a few months that a tiny virus ended with the biggest worldwide sanitary and therefore economic disaster since the WW2. Never forget that most of the renewals and high growth periods have often followed a major crisis!
If we interpolate with the Chinese situation, we can expect a 14 weeks long crisis.
Activity, sales, production and supply chain are likely to be impacted, sometimes seriously.
Take advantage of the situation - not only to survive- but to emerge stronger. Maybe your mind is not in it, at this time, but soon you will be able to think strategically.
However, speed of recovery will differ from an industry to another and from a country to another.
Tertiary sectors (services) will take the biggest hit, with transportation, hospitality/food and beverage, and naturally the financial sector as the ultimate financial risk taker of the economy. Secondary industries, such as industrials and construction, were also hit hard, while primary industries, largely agricultural, will be only slightly affected.
Some of the most impacted sectors will rebound quickly—notably, services industrials, hospitality/food and beverage, and transportation.
Sectors like education, financial services, tourism and entertainment, will recover slower than others.
In any case, for all countries, in addition to their own agility and empowerment of the authorities and states organization efficiency, main immediate risk mitigation initiatives were found in:
- Optimized usage of Nations Plan stimulus
- Online continuity of the educative system
- Massive use of telework
- E-commerce minimizing physical shopping
- Level of automation and robotization of industries and services ie replace humans - ….
Some of our Recommendations
One: Cash is king
You should get out of the Crisis with the most stable financial stance. Make a cash assessment of your business, cutting unnecessary costs. Identify all cogs for efficiency. Take advantage of the government aid. Take away fat wherever you can, whatever the effort it would be. Do not hesitate, it will make a major difference. An economic crisis could lead to a financial crisis, as Corporate already have the highest level of debt ever. Adapt your 2020 budget!
Two: Protect your People
Protect your people, in today’s world the society has become egocentric, sometimes extremist especially through politicians and social media, your proximity and empathy with your people is key.
The promotion of an internal culture favoring benevolence, empathy and taking into account individuals as a whole, professionally and personally will create a safe environment.
Organizations will be subjected to a paradoxical injunction: to pay much more attention than before to the personal situations of their employees, while respecting their right to privacy.
Three: Cherish your (good) Customers
Your business is highly dependent on you customers’ loyalty, characterizing your best customer from the rest. Do you really know who they are? Make sure they know that you are there to help in this crisis. Devise specific solutions. Help them prepare for the Day after, in the best conditions possible. Concentrate all your efforts on them.
Four: Accelerate the Innovative ways of doing business
Your business is highly dependent on your suppliers, distributors and employees , so you should experiment the use of new technologies hedging the sensitive risks of your business model (supplier failure (through geographical diversification and speed of move) distributors ( through ecommerce) employees unavailability (through generalization of telework)).
Five: Adapt to the Day After, The New World will not be so easy to manage and never as familiar
The world will not be the same afterwards. It will not be business as usual and some new priorities will raise:
- Address all the remaining inefficiencies that require more time to eradicate, soon the Day after, do not wait
- Launch the bold, innovative projects that you have matured during those days of confinement
- Review your organization, processes and supply chain incorporating all risk factors, understanding your vulnerabilities, to geographies, sources and ways to do business. Diversify risks as much as you can
- Prepare now for your future talent needs. Challenging times and uncertain market conditions often make critical talent available. Plan now, and acquire the talent you need to fuel mid- to long-term growth after the coronavirus has run its course
- Make sure that your people can rapidly manage a ramp up program while changing drastically their priorities and behaviors
- Look at your competitors, especially those less well prepared than you, with less cash, that can be a good opportunity to consolidate your activities, enter new geographies, diversify in adjacent areas or customer segments. Identify synergies
- Prepare for acquisitions, the economy is full of cash, good projects will easily get financed.
And in any case beside these strategic considerations, the Ramp Up success will rely on your ability to execute:
- At Market level: “Sell like a hell”, Supply-chain efficiency & Sustainability
- At Production level: Ramp-up, Reliability & Performance
- At Management level: Planification, Priorities & Execution
We, @INUO Strategic Impact since inception, wrote to our major clients and prospects:” We live in a disruptive and unpredictable world where all industries and value chains are impacted. A fundamental change in pace, method of thinking and strategic decision-making is imposed on Boards and Managers. Conventional methods are outdated and must give way to far-sightedness, pragmatism, agility and efficiency in emergency management”.
We are ready to share our experience with you and to assist you during this new important step of your history.