COVID-19: The start of winter
This blog post was published 24 March 2020, based on information available at that time.
As I write, Europe is in lockdown, with closed borders, travel restrictions and cases multiplying. We are learning just how fast governments, individuals and markets can move to practice extreme social distancing. At Efficio, we now primarily work from home; but we continue to support our clients in a business-as-usual manner within this changing landscape.
Government guidance is changing by the day, but the advice and experience of past flu pandemics suggest we are facing a long phase of disruption. Many sectors face severe downturns in demand, particularly travel and leisure. Fiscal and monetary support, as well as compassion between businesses and individuals, will be required to emerge successfully. However, within each sector, there will be ‘First Responders’ who maintain business continuity and even grow their businesses over time – and others who fail to adapt to this period of disruption.
When faced with a crisis, it’s key to first map out how it will impact you, and then plan your response. We use a ‘four key risks, one opportunity’ framework to analyse your position.
Employee safety, and with it the populations safety, is everyone’s current top priority
Client demand is shifting rapidly both in magnitude and channel, like increased takeaway food, and companies are flexing to adapt
Business continuity is a key differentiator for clients and requires close collaboration with your supply base to deliver
Financial stability to support through a period of reduced revenue, liquidity issues and challenging financing situations is key – and some businesses will fall short
Invest in innovation – the strongest will gain market share by leveraging their business continuity and deliver both new and improved offerings to their clients as we recover
We will be talking more about each of these topics over the coming months, but we are already seeing companies respond proactively along these lines – supporting their supply base to ensure business continuity through prompt payment, prepayment for future travel and expanding delivery options to name just three measures.
For businesses already practicing good ‘hygiene’ by knowing their supply bases, managing performance and sharing forecasts, this is a great opportunity to be a valued partner. We’re helping our clients mitigate these risks from a wide variety of starting points, with a clear ‘command centre’ as an early differentiator on speed of response.
We can’t yet forecast the end of this ‘Winter’ of Covid-19. Thankfully, the examples of China and Italy appear to chart a route to minimise loss-of-life by limiting social interactions. However, as James Gallagher, BBC Health and Science correspondent, says. “this approach comes with a major problem - there is no exit strategy.” The risk is that until a vaccine or treatment is developed, we are likely to see continued controls on movement or further waves of infection. Society and business face an uncertain period of changing risk and restrictions – but we can be sure that at some point, we will move beyond this Winter.
“If Winter comes, can Spring be far behind?" - Shelley
A new period of economic expansion will emerge as we move beyond the pandemic. First responders to this ‘Spring’ will be those who have prioritised business continuity, kept their supply chains open and up-to-date and are ready to scale. They will have been flexible with their partners to make sure each of them is strong enough through this downtime, been strategic enough to prioritise who they need to keep strong and planned sufficiently to scale back up quickly during this window. Forward planning is a must for direct supply chains, as lost production in Q2 may still be impacting sales and customers through Q3 or Q4, depending on the sector.
This is the time to invest in innovation, particularly once we move beyond the acute phase of disruption. Companies and staff will take the upcoming period of downtime to re-tool, investing in partnerships, training, systems and tools to help them deliver better than ever before.
This period of remote working and supply chain disruption will catalyse innovation like an underground strike, which saves time, on average, as people try new routes – some of which are faster. Businesses might increase supply chain visibility and resilience, develop new products or business strategies, or develop deeper working relationship with their critical suppliers to innovate and be ready to scale. For instance, this crisis might accelerate online deliveries and remote working. It also offers sufficient duration to fully switch out supporting infrastructure, such as upgrading travel management while there are fewer users.
With these innovations, the ‘First Responders’ will be ready to rebound strongly once the pandemic winds down.
After all, if Winter comes, can Spring be far behind?
Find out how Efficio can help your business mitigate risks from COVID-19 and accelerate first steps back to stability