In the ‘now’ of the COVID-19 crisis, some companies are still in survival mode, focused on the health and wellbeing of their employees; the financial stability of their operations and establishing a center from which to manage risk.
“In this period of unprecedented uncertainty, optionality, agility and decisiveness are vital,” says Kelly Grier, Chair and Managing Partner, EY US LLP and EY Americas Managing Partner. “Scenario planning that can give you plays that you can run quickly in response to change will help businesses deal with ongoing unpredictability.”
A to-do list for “next” won’t be uniform for companies in every sector or geography. The “next” phase looks different for companies in the airline industry, oil and gas and hospitality from companies in life sciences, food and technology, for example. Not all countries have been equally affected by COVID-19: some countries have experienced no lockdowns while others are likely to be severely restricted for several months.
What comes next is unknown, but it is almost certainly volatile. To prepare for this, we see two imperatives: adapt operations and increase resilience.
“Flexibility has always been a business advantage but it will now be critical to survival” says Julie Teigland, EY EMEIA Area Managing Partner. “Flexible employment contracts, owning versus buying-in, diversifying site portfolio risk, making supply chains agile through shared resource models, ensuring sustainable working capital needs – these are all critical to coping with sudden fluctuations in supply and demand.”
Businesses will need to adapt their operations to enable re-opening and commercial viability. Companies should repair the value chain, near-shoring where applicable; reduce portfolio complexity and optimize functions. The pandemic has exposed weaknesses in the architecture of many business operations: while lean and efficient, they were inflexible and difficult to adapt to a rapidly changing environment.
Organizations need to design resilience for a period of recovery with recurring disruptions, not just business as usual. They need to look at lowering the cost base, increase workforce flexibility and reduce risk across the operation.
To be in the best position to take advantage of whatever the saw recovery may offer, the business needs to have the right people in place, financial firepower and the ability to move quickly.
1. Create a flexible workforce
Companies need to create a more flexible workforce, looking at adaptable contracts, contingent workers, and exploring the efficiencies of remote working with the potential impact on real estate needs.
They need, too, to look at how and when to onboard furloughed staff; how to engage the workforce in the transition to a new normal; how to attract people with the right skills for what comes next.
Innovative responses to the crisis itself can provide a blueprint for building flexibility into employment. Some big-brand US grocers and pharmacies, responding to a surge in demand for shelf-stackers and delivery personnel, have instituted novel collaborative arrangements with companies in some of the hardest-hit sectors (e.g. hospitality, restaurants and retail) to meet these needs. Some companies are cooperating directly to funnel applications to where there are job openings, while others are creating exchanges to connect labor supply and demand.
Companies need to be open and transparent in their communications with their employees, engaging them in the rebound while also recognizing there are likely to be ongoing restrictions in mobility and physical distance that will have to be factored into any return to workplaces.
Videoconferencing has become the standard for business meetings, and this and other work efficiency technologies may provide longer-term options for remote and flexible working, while strengthening cyber security protocols and controls to reduce risk is paramount.