The COVID-19 jolt has shaken the foundation of the Indian economy. Indian businesses have absorbed the brunt of the damage. Companies have been shut, employees are either benched or have been asked to leave. With the pandemic set to hit its peak in late October, job risk and reduction in manpower will be hanging around.
A study by FICCI states that close to 380 companies across varied sectors are faced with impending uncertainty. The study estimates that close to 70% of these companies are expecting degrowth in sales for the fiscal year 2020-21.
Reduction in both company order books and cashflows are imminent. Unless the Government comes forward and announces some economic relief to Indian companies, slow death is on the cards.
Where are we now…
Top management across enterprises are thrown into the spotlight. Their experience makes them best suited to drive their respective companies out of this rut. CEOs are under pressure to re-construct a roadmap that will help their revenue take flight.
So what should business stakeholders learn from the current scenario?
The testing in India is slower than in other parts of Asia or Europe. This means the actual impact of infection is undermined. The spike in cases is bound to increase, hit a peak, and gradually settle down.
The lesson here is that a business cannot create a roadmap with uncertainty over cases, protection of employees, retailer-supplier hassles, cross-border supply, and other partnerships.
Even if antibody tests are readily available, the decision to invite consumers and workers back to normal activity will be difficult. Working from home is the new normal. This is the only way productivity levels can be met, keeping employees focussed and safe.
The success and failure of vaccines is a big factor when it comes to boosting investor and consumer confidence. The longer the pandemic stretches, the financial repercussions will be harder on cost-cutting, shipping, air-freight, haulage, supply chain, raw materials and products.
The lesson to learn here is fund management. The credit market is now tightened, making fund recovery difficult.
What can be done?
Business stakeholders must maintain the perfect balance between opportunity and enterprise risk. For the company’s finance officers, balance sheet strength, liquidity value, and financial forecasts are parameters that need constant monitoring.
Critical thinking is needed to set up offensive strategies toward M&A opportunities. Talent models, consumer engagement, supply chains, and evaluation of business models are also part of the rebuilding checklist.
A blend of clarity, humility, courage, and decision-making is needed. What is not required is over-confidence, procrastination, and supporting biased data.
FICCI President, Sangita Reddy, feels there is a need for sizeable support towards industries to protect their enterprises and personnel.
The following six steps need to be taken to fight the current uncertainty clouding businesses across the globe.
Cash preservation, employee engagement, and customer experience are the key themes to focus on. Cash preservation focuses on ensuring the business is well funded, despite the pandemic. Also, new ways to garner funding needs probing.
Customers need to be served, but with even greater zeal. The customer is still the king, pandemic or not. Remote working is now adapted by numerous companies. This means serving the customer is still a priority.
Employee engagement is possibly the biggest challenge for businesses. There is a behavioural and cultural shift towards remote working. The happiness and health of employees need to be taken care of. Foster a community through virtual tools to combat isolation.
This is something that incubator Nordic Intent does with aplomb. Weekly activities are carried out by the HR team to ensure employees working from home feel involved.
Stronger leadership doesn’t entail just taking concrete decisions but also jumping head-first into the fire, to solve problems. Managing cash reserves and organizing teams is expected on leaders during this critical juncture.
Approachable leaders spread the smile. It is how these leaders respond to customers and employees will go a long way. People-focused leadership is what we lacked before. Now is the perfect time to become one.
Change is not the issue, but ‘forced change’ is. It has prompted companies to come up with a new outlook to operations. The entire business model needs reshaping.
So, is it a good thing that employees work remotely and yet deliver quality results to customers? Yes, of course. For some companies who are continuing to shine financially during this pandemic, work-from-home isn’t the problem.
The entire organization is learning to deal with change, and if the result is positive, let it stay that way. Working remotely has its advantages. No workplace distractions, there is increased agility, and executives are easier to reach through WhatsApp.
Internet connectivity, family interruptions, lack of resources, etc. will hinder productivity to some extent, but it’s better to be somewhat productive than not being productive at all.
Risk management involves plugging holes to better prepare for a rainy day. But can we plug an entire pandemic that is taking human lives, and not just affecting business?
This calls for a proactive risk management strategy. We need to accumulate enough insights to come up with solutions to prevent a slide in the future. Help is needed in some quarters to mitigate the impact of this global uncertainty.
According to Dinesh Kanabar, CEO of Dhruva Advisors, companies expect the Government to provide some financial stimulus through credit or tax refunds.
Leaders must anticipate and influence set strategies. Strategic foresight allows leaders to gather and process real-time information regarding a change in a business environment.
Insights include trends, development, market changes, social, regulatory environment, political, economic, and of course a probable pandemic.
Building a foresight team isn’t a bad idea. It is not easy for an individual to keep tabs on the wider technological, regulatory environment or social possibilities. The risk has to be managed holistically manner. This team alerts the top management of any signs of a threat to their organizational roadmap.