With a world struggling to come to terms with turmoil, issues and challenges abound. No industry has been spared the wrath of Covid-19. Travel has been severely curtailed; no one is flying. Orders for planes have been cancelled. The aviation industry has been completely crippled. Travel restrictions have affected tourism as well. The number of B&Bs which have gone under, are uncounted. The supply chain has been disrupted as never before, with the virus affecting even the source of food production in some cases, as farm and abattoir workers fall ill, and supermarket shelves remain unstocked as staff stay home, or worse – suffer in hospitals.
Even as individual economies labour to reset the balance, and put measures in place to revive commerce, there is an awareness that this will be the New Normal that everyone will have to get used to. In due time, things may go back to a semblance of normal, but they will not be the same. Investors will continue to be cautious; people will still think twice about travelling; and although people will still spend, this will be on needs rather than wants.
“The New Normal is a transitory phase,” said Ramesh Pillai. “We have to look for the Next Normal and position ourselves to respond. We have to find resources and methods to achieve this.”
In a post-IERP Global Conference 2020 Masterclass presentation, Ramesh, Group MD of Friday Concepts, covered five areas for risk professionals to consider, which are critical to business recovery in the wake of the pandemic: Resolve, Resilience, Return, Reimagination and Reform. The first thing to do is Resolve to take care of employees, suppliers, customers and other collaborators, as far as capabilities and resources permit, in order to maintain and rebuild Resilience in the short and long terms. Ramesh pointed out that 100% recovery was not immediately possible because of the economy, but partial recovery would be good.
In the course of recovery, because the virus still poses considerable danger, organisations have to carefully consider how to get the business back on track without putting the workforce at risk. This is complicated because the business needs people to run it. Work that can be done from home, should be. Essential services that need physical, on-site presence – such as machine maintenance or systems operations – have to be carefully scheduled so that SOPs are adhered to. Workers may be divided into alternating on-site and off-site teams so that work can be undertaken without everyone having to be on site and exposed at the same time, and if one team is unable to work, another can take over.
In the current circumstances, Resilience hinges on maintaining the cash flow of the business and meeting its commitments when they fall due. This is the control expenses, Ramesh added. It is also an opportune time to reset, recalibrate and recognise or identify what drives the customer. A “Cash Dashboard” could be established, to set priorities for payments the firm can collect and must make in cash in the short term. “See what needs fine-tuning,” he said, suggesting some areas that need attention, such as identifying key risks, developing tailored scenarios, conducting stress-testing and establishing a portfolio of interventions.
When identifying key risks especially, organisations should look at current or emerging risks and try to develop efficient methodologies for mitigating them. Digitisation will be particularly beneficial as it will support the organisation’s ability to do real-time analysis. But companies must run different scenarios and ask “What If” questions as well, to help them plan; and do reverse stress-testing to see how much their current systems can tolerate. This will be an indication of where their weaknesses lie, and point to shortfalls that need to be addressed if they want to boost their resilience. These findings need to be an analysed so that a mitigation plan can be put together.
“There are a lot of unknown unknowns but they can be planned for,” Ramesh advised. “Firms should consider velocity as well – the probability of an event, and how fast it could occur.” He suggested also building a Resilience Scorecard to provide an outside-in perspective and establish a benchmark against which the firm’s efforts can be measured. He acknowledged, however that with many businesses, it is a case of firefighting first, and moving on to business continuity only later. It is also more complicated if the business operates in different regions which are under different health regulations or are experiencing infections in various degrees of severity. But as organisations come to grips with the new challenges confronting them, awareness of something else will surface.
“The skillsets that may be needed going forward may not be the same as the ones which were needed in the pre-pandemic era,” pointed out Ramesh.
Indeed, life cannot go back to what it used to be; organisations will need to recognise and accept the fact that the way of doing business has changed. Mindsets need to change in tandem. Retraining will be necessary if the organisation wants to remain competitive in the New Normal. Apply a practical approach; follow SOPs where the virus is concerned and take the necessary precautions to safeguard the health of the workforce. Businesses should ask themselves, pragmatically, who among the workforce should come back, and when.
Then they need to decide how they want to do it. They also need to factor in what they will have to do in the event of a resurgence of infections. “Craft plans for work staff safety,” Ramesh said. “Determine at what point the workforce needs to return, and identify who among staff is high-risk, and who is low-risk. This is necessary because the high-risk staff cannot stay away forever – hence there need to be strategies to address this challenge.” While putting all this in place, organisations also have to decide how to manage customers and their changing requirements and tastes. “The new customer shops online more,” Ramesh said. “So businesses will have to figure out what will keep their customers loyal.”
As difficult and unsettled as the environment may seem, Ramesh assured participants that recovery had already begun but businesses will have to make some hard decisions. Different approaches will be needed because there are different issues and their attendant risks to consider. One lesson that the pandemic has taught everyone is that there is no knowing the velocity with which environments can change – so businesses need to be prepared. It has become insufficient to be able to embrace the challenges of the New Normal; it has become imperative to go beyond the current situation, and be able to anticipate the requirements of the Next Normal.
