Hope Is Not a Plan
Disruption in the economy and society caused by COVID-19 will force companies to rethink their business models, corporate strategies, and day-to-day operations. Teams can navigate this punishing ground by making plans for wildly untameable outcomes.
COVID-19 has wreaked havoc with business. All at once, disruption in day-to-day operations, employee well-being, consumer activity, and stock markets has forced executive teams to grapple with risks that in March barely registered.
Many companies lack the reserves to survive this crisis. Others are finding it hard to recover from the economic slowdown. Businesses that rally – even those that turn this disruption into short-term value – are being challenged by a new and unpredictable order that is emerging alongside COVID-19.
Over time, shifts in the economy and society will force companies to rethink their business models, corporate strategies, and day-to-day operations. Quite how is not clear, and the burden on executives is overwhelming. Still, teams will more readily navigate this punishing ground if they prepare for wildly untameable outcomes.
Abandon the fantasy of ‘when we return to normal’
The hope that after the COVID-19 lockdown the world will ‘return to normal’ helps us (somewhat usefully) to deal with today’s worries and doubts. All the same, confidence that everything will fall back into its original place once we contain the visible threat is misguided. Companies are unwise to bet on a familiar ‘normal’.
Uncertainty abounds. With HM Government’s Vaccine Taskforce in full swing, the Prime Minister rightly says that a vaccine is not guaranteed. The nation’s strategy to rebuild for a world with COVID-19 concedes how ‘hope is not a plan’. Firms must confront these uncertainties, and let go of ideas or plans that the crisis will render obsolete.
Question outdated financial assumptions
The International Monetary Fund in April predicted the worst recession since the 1930s Great Depression. Even under a best-case scenario, central banks and governments will struggle to reinvigorate their economies, not least because of national debts aggravated by generous stimulus packages. COVID-19 will shape markets for years.
Assumptions about value chains, consumer spending, regulatory norms, profit margins, taxes, and – significantly – public expectations of how business should operate, will all be tested in the coming months. Finance teams must revisit projections with a brutal assessment of what is possible under these unfamiliar and shifting constraints.
Account for social distancing into the future
Calls for social distancing have forced change in how we behave in everyday life. Many people have settled into routines to work within this restriction. Even after the laws on keeping six feet apart are relaxed, individuals and society at large may well take on new standards of what is tolerated or desirable.
People may prefer not to sit cheek by jowl in a fashionable restaurant. Money cannot be seen to buy safety so airlines will reassess personal space in First versus Economy. Consumers who discovered online deliveries may later see no merit in visiting local shops. Companies need plans for whatever persists in this new way of living.
Learn afresh what stakeholders care about
More broadly, the values of stakeholders – employees, customers, regulators, shareholders, and society – will evolve in response to recent experiences. Whether a person has suffered ill-health, seen friends die, or simply witnessed devastation from afar, new and raw emotions will drive future choices and behaviour.
Individual and community well-being may become an overarching concern. People may question globalisation and ask firms to invest in assets close to home. Business may have to respond to a new-found sense of connection; or otherwise help individuals better safeguard their own interests. In general, companies must look beyond today’s products and services to examine stakeholders’ true, complex, individual – and evolving – needs.
Lead with courage
Shifts in how the COVID-19 pandemic is unfolding, along with its unpredictable impact on economic systems, cultural norms, and individual preferences, are a tremendous challenge to ‘business as usual’. This is a hard time for companies, especially when the people who run them are carrying such a heavy personal burden.
Nevertheless, the crisis is also a chance to abandon old strategies, take charge of disruptive forces, and generate sustainable value. Senior teams will thrive if they show courage – first, to grapple honestly with shifting realities; and, second, to take bold and imaginative action.
Image Matteo Panagelli | Unsplash