Article written by: Ryan Burke - EY Global Growth Markets Leader
The World Health Organization (WHO) declared COVID-19 a public health emergency of international scale. COVID-19 has become a human tragedy, and is impacting governments and businesses alike with unprecedented disruption and risks. It is a crisis that has profound implications for companies globally. From the complete or partial shutdown of factories, to supply chain disruptions, to labor shortages to cash flow stress, companies are feeling the business and financial shock of the COVID-19 outbreak.
As companies navigate the ongoing COVID-19 crisis, there are a number of key issues business leaders should be thinking about, as well as steps they can take to reshape their business and plan for recovery.
Five ways to respond to the COVID-19 impact
1. Prioritize people safety and continuous engagement
Ensuring the safety and well-being of the employees in the workplace is essential. People are looking to their employer, community and government leaders for guidance. Addressing their concerns in an open and transparent manner will go a long way to engaging them and reassuring the business continuity.
2. Reshape strategy for business continuity
Most businesses are likely to experience significant disruption to their business-as-usual operations and will face business underperformance throughout the duration of the COVID-19 crisis. To help address these challenges, companies will want to:
3. Communicate with relevant stakeholders
Clear, transparent and timely communications are necessary when creating a platform to reshape the business and to secure ongoing support from customers, employees, suppliers, creditors, investors and regulatory authorities.
4. Maximize the use of government support for businesses, where available
Administrations around the world are rapidly developing new measures to address the economic challenges faced by industries, companies and employees.
Many countries have already introduced fiscal and/or monetary measures intended to ease the challenges created by COVID-19.
As new measures are developed, companies should work to track regulatory and legislative changes, analyze how the policies apply to their businesses, share economic concerns and policy proposals with your regulators and legislators, and communicate available new benefits to employees.
5. Build resilience in preparation for the new normal
Once companies have solidified strategies and communicated any new directions with relevant stakeholders, they will need to execute based on revised plans while monitoring what continues to be a fluid situation. Senior management should report any material deviation from the plan in a timely manner so that their companies can take additional action to avoid further negative impact.
Once the COVID-19 outbreak is controlled, companies will want to review and renew business continuity plans (BCPs). They’ll want to assess how existing BCPs are working. If there are deficiencies, companies will want to identify root causes, whether they involve timeliness of action, lack of infrastructure, labor shortages, or external environment issues. Companies will then want to consider putting new internal guidelines in place based on lessons learned, as well as solid contingency plans to build resilience and better respond to future crises.
Plan for recovery now, not later
Although there are lessons to learn after the fact, companies should be making decisions during the crisis with recovery in mind.
The COVID-19 crisis is impossible to predict with conventional wisdom and forecasting tools. However, there are many lessons companies can learn and carry forward once the crisis has passed, and they’ve had a chance to analyze their response.
When the crisis is over, it will be clear which companies have the resilience and agility to reshape their business strategy to thrive in the future.
Longer term, companies will need to consider how robust their business, management team and initiatives were in facing the crisis. It will also be important to consider and reset the business assumptions that underpin the supply chain and other concentrations that many businesses have been exposed to over time.