Coronavirus response: six steps CEOs should take right now
The Coronavirus pandemic is mushrooming into a more disruptive force than anyone anticipated. Covid-19 has crippled global supply chains, ripped through financial markets, closed schools and workplaces around the world, and forced millions into an indefinite period of social distancing.
As a result, the 2020 business outlook is radically different from what was expected just a few weeks ago. CEOs worldwide are scrambling to deal with the immediate impacts, while also trying to plan for the longer-term implications of this unique global crisis.
To help CEOs navigate the impact of the Coronavirus, experts at Kearney – a global strategic management consulting firm – have created a six step checklist for Covid-19:
Go digital
The two most immediate imperatives are: 1) Protect employees from coronavirus exposure – as well as from economic impacts, as much as possible 2) Minimise disruption of service to customers.
Digital is the prime enabler for both. Actively explore how you might help your people to remain as productive as possible under current constraints. Make the most of virtual meeting technologies. Adjust employees’ roles and priorities wherever possible to focus them on contributions they can make by working via digital technologies. This will help you keep your best employees – people you will urgently need to help rev up your operations once this crisis runs its course.
As important, actively experiment with alternative delivery channels that can help you meet customer needs in the midst of widespread closures and social distancing. Demonstrate you’re willing to go to extraordinary lengths to be reliable, and thus retain their loyalty. Learn from the experience to capture long-term channel efficiencies. Service companies, in particular, have been trying to entice customers toward digital channels for years. This crisis is the perfect time to show late adopters the benefits of digital self service.
Rig for rough weather
Task your leadership team to develop a set of immediately executable actions that could help stabilise financial liquidity, which could be severely threatened. The scan should provide a rapid but rigorous reassessment of current investments, pinpoint ways you could quickly reduce net working capital, and identify alternative sources of financing. Do this even if you believe you already have a clear picture. Things are moving fast, and in the midst of the coming storm, you may soon see your choices in a new light.
Appoint a crisis leadership team, and personally chair it. Crisis response must be your top priority in the weeks and months ahead.
Scenario plan
Take time now with your leadership team and other trusted advisors to envision exactly how you would respond to a:
- V-shaped scenario in which the crisis passes before summer, allowing economic activity to fully rebound after a brief period
- U-shaped scenario in which the economy is impacted through Q2 and Q3, but shifts into a slow recovery in Q4 2020
- L-shaped scenario in which Covid-19 is the trigger for global recession, causing the downturn to extend forward 18 months or more
Manoeuvre for pole position, post-crisis
This crisis will abate at some point. And when it does, you want to be nestled squarely into a pole position, ready to make the most of resurgent growth opportunities. The outlook could turn positive unexpectedly, given the robust strength of the global economy coming into 2020. Your crisis response strategy should therefore include a detailed rebound plan covering a range of ramp-up imperatives including marketing and customer re-engagement, facility restarts, capacity adaptation, employee communications, and supplier reboots.
“This crisis will abate at some point. And when it does, you want to be nestled squarely into a pole position.”
Stay visible
It’s only natural to avoid questions for which you have no ready answers. Right now, you don’t have that luxury. Take personal charge of your communications, and communicate much more frequently than you usually do. Proactively engage your customers, seeking insights into how you can best serve them in these unusual and difficult circumstances.
Use digital platforms to stay connected with your employees, letting them know that you are genuinely concerned for them, and reinforcing the belief that this is a storm you will all weather together. And as you communicate, be as transparent as possible. Trust your people to hear the truth. Don’t sugarcoat the situation. Model how to face the adversity with courage and resolve.
Seek opportunity
In the face of today’s dramatic uncertainty, you might take some inspiration from the advice of Sir Winston Churchill: “Never let a good crisis go to waste.”
True, your business results will likely suffer over the next few quarters. And your executive team will face some very difficult choices. Those realities now seem unavoidable. The open question is: What might your company gain in the process?
Crises do create possibilities one does not encounter in the midst of calm. Leaders can form unusually strong bonds with their people, as Sir Winston did during the darkest hours of the Second World War. Crises can also give business brands unique opportunities to shine, as Johnson & Johnson famously demonstrated during the Tylenol crisis.
Finally, crises can create space to make structural fixes to your business that seemed too painful to tackle under less stressful conditions. No one chooses to lead through a crisis, yet crises frequently bring out the best in leaders.
More information on Kearney’s Covid-19 business response strategies can be found on the firm’s website.
Authors of the article are: Adam Dixon, a partner in Sydney; Nils Kuhlwein, a partner in Düsseldorf; Michael Jenkins, a partner in New York; and Utsav Garg, a partner in Singapore.
