Business management strategies, the global pandemic and how management should plan ahead?

The World Health Organization declared the COVID-19 outbreak a Public Health Emergency of International Concern on the 30 January 2020 and a pandemic on the 11 March 2020. Since that time the world has been focused on for the most part fighting COVID-19, without deliberation as to how other deadly diseases are progressing. Unfortunately, efforts to combat these ones through immunization has taken a back seat to combating COVID-19, and the results could be serious unless inoculations can pick up the pace and catch up in the not too distant future.

Since that time news and other publications were dominated with details of the COVID-19 pandemic, inconsistent information readily available in social media, government policies, medical and research institutions, academics etc. Whilst the number of confirmed cases continues to swell all over the world, as does the number of countries affected and there is no end in sight.

Furthermore, the pandemic has created a widespread situation of uncertainty and confusion about risks to people and their habitat.  Company measures and best practices, government shutdown policies and recovery plans have all been affected. Scientists, experts and politicians agree that the legacy of the COVID-19 pandemic will be with us for years to come, even after the immediate threat has passed. The impact on public health, the supply chain, tourism, hospitality, transport, manufacturing, not to mention the economic contraction caused by the coronavirus pandemic is staggering.

While there are some signs of stabilization, there are new concerns that a recent surge in infections will undermine the hopeful recovery. One of the more important policy issues resulting from the COVID-19 crisis is the effect of the exceptional economic measures being taken to mitigate the social and economic impact.

The impact on business and the economy is even less certain. Travel bans and trade restrictions will undoubtedly cause mayhem on many sectors, but by how much and for how long? Can the impacted organizations’ sustain the weight of this disease?  Can our governments sustain the continuous support of its citizens?   

Unfortunately, government responses around the world also varies and in fact such measures being impulsive and unpredictable. With low interest rates, Central Banks have fewer options to stimulate a slowing economy and many countries are relying more on economic policy, with less predictable outcomes.

In attempting to make sense of all this, one must clearly recognize the nature of the economic contraction the world is facing. Consider, for instance, the worrying situation facing physical services such as medicine, tourism, restaurants and transport to name just a few.

From the public health point of view it's been necessary to restrict access to a number of remedial medical services, which are intended to correct a physical or mental disorder of patients and are necessary to achieve a detailed individual’s therapy plan, to facilitate in the slowdown in the spread of the virus.

This sector is also expected to handle and support all activities related to public wellness, as it does put up with so much of the burden. Governments all over the world, to the best of their local capability, have deployed appropriate resources and financial measures to ensure that this sector can maintain its operation against the influx of people because of COVID-19.

One has to recognize that, as the pandemic recedes and the economy reopens, one cannot expect demand to increase sufficiently to make up for the initial contraction due to this. In trade and industry terms, the initial loss itself is not "recoverable" because the time itself is forgone. Therefore, this has implications as to how increasing debt is repaid. Governments have to devise a financial makeup where economic fluctuations caused by such a pandemic, smooth out over time. It is clear, that governments cannot recoup foregone tax revenue because in the past rising debt has been accompanied by high inflation and it is natural to assume that inflation will follow future rises in government debt.

An unpredictable future

The COVID-19 pandemic disturbed employment all over the world and short-term consequences were abrupt and often severe. People were furloughed, lost jobs and others adjusted to working from home as offices closed. On the contrary, countless of other workers who were deemed essential and continued to work in hospitals, utility services, business which consisted of the sale of food, food products, or beverages, municipality services, warehouses, ports and airports worked under new protocols to reduce the spread of the coronavirus.

This in its own right creates an increased level of Uncertainty and Unpredictability in ones organisation, which is the exact opposite of what, is required for strategic planning. Every organisation needs to have both a Strategic Plan and of course a Budget. The strategic plan lays out the direction and purpose of the business and the guidelines for achieving those goals, whilst the budget reflects on the money needed to support management realize those goals. In effect, strategic planning or budgeting forecasts compel managers to lay to rest underlying uncertainties in their cash flows. Such systems clearly force managers to underestimate uncertainty in order to make a compelling case for their strategy.

The way businesses and management have been operating over the past few years due to this pandemic has all of a sudden changed and taken a different direction. In a world dominated by such changes that no one could have foreseen, meant that organizations must depend on leadership from its managers and supervisors, whose job responsibilities are changing to accommodate the latest changes. Then again, if one was to assume that trade and business is now entirely unpredictable, this may clearly force managers to discard the analytical thoroughness of traditional planning processes altogether and base ones strategic decisions primarily on makeup.

Many businesses, particularly Small and Medium Enterprises (SMEs), such decisions go beyond strategic planning. The inability to manage cash flow, financing and resourcing in the face of sudden and unpredictable change can put the future of any such organisation at risk.

How an organization should act strategically through a pandemic?

Currently, organizations are justifiably consumed with the response effort needed to deal with the effects of the pandemic on their business and customer base and stay afloat, but it is imperative not to allow tunnel vision focused on survival to drive strategic decision-making.

Management believes that they are in a very uncertain environment and don’t trust their gut feelings and suffer from decision paralysis. That means that they avoid making critical strategic decisions about their employees, their products, their markets and the technologies that they should expand into. The centre of attention is simply turned towards cost reduction and lean operation instead on re-engineering, quality management systems or internal process optimization programs. Although valuable, these programs are not being considered by management and are completely overlooked.

It is important that an organization not only recognizes its operating environment and market potential, but also considers the long-term implications of their short-term strategic choices in order to ensure the viability of the business and enhance the long-term prospects of winning in the post crisis economy.

Steps to business survival

The answer is that management gets prepared and creates an agile and flexible organisation which could stand up to this external crisis. This may not be as difficult as one believes and as things stand at the moment may be disruptive, but in fact, for many organizations, undertaking some additional analysis, scenario planning and changes to operational monitoring will have a significant impact in the survival of the business.

The PDCA (plan–do–check–act or plan–do–check–adjust) approach is aimed at continuously following, monitoring and improving the organization based on the obtained results in every single organisation and/or department. These four key steps which organizations should consider will help them prepare for any future changes. The PDCA methodology is an iterative design and management method used in business for the control and continuous improvement of processes and products. It is also known as the Deming circle/cycle/wheel who is considered by many to be the father of modern quality control, the Shewhart cycle, the control circle/cycle, or plan–do–study–act (PDSA). These are:

1.         Plan - Recognize an opportunity and plan a change. Management should consider a range of likely scenarios and the impact each of these would have on the business. Undertake a detailed review of the organisation so that one understands its strengths and vulnerabilities in facing those various scenarios.

2.         Do - The above analysis is likely to highlight a number of areas where change is appropriate, regardless of the scenario. These areas should be identified and appropriate changes made. It may be best to initially carry out a small-scale study to test the change.

3.         Check - Review the test, analyse the results, and identify what you’ve learned.

4.         Act - Take action based on what you learned so far and if the change did not work, go through the cycle again but with a different plan or scenario. If you were successful, incorporate what you learned from the test into wider changes.

If management carries out this exercise more times than not, that is better than being paralyzed by the unpredictable nature of things. These actions are also lessons in ways to crack the code in the unpredictable times.

Conclusion

When things are unpredictable, it changes management’s perspective, their focus and their actions. As a result of such business ambiguity one tends to be much more conservative in ones decisions, which is not at all bad, but the organizations’ development processes and focus is more micro than macro. It is imperative that management should maintain a certain level of confidence and conviction and demonstrate a strong leadership in such circumstances.

Once management identifies a range of possible scenarios and developing plans to respond to it operational requirements, it is important to monitor the selected route map to determine what reality is emerging from the PDCA methodology. The executive team should consider each firm scenario and determine the level of reporting and analysis that is required to meet its business objectives.

Changes in any organisation do not happen just out of the blue. Such changes do happen because somebody, something or a state of affairs comes along who challenges the status quo and gets people thinking differently. The following six individuals have forever changed the course of quality and the way organizations’ operate. Here are some of their quotes:  

"Observing many companies in action, I am unable to point to a single instance in which stunning results were gotten without the active and personal leadership of the upper managers." - Joseph M. Juran 1904-2008

"Companies exist in a society for the purpose of satisfying people in that society." - Kaoru Ishikawa 1915-1989

"[Quality is] the total composite product and service characteristic of marketing, engineering, manufacturing and maintenance through which the product and service in use will meet the expectations of the customer." - Armand V. Feigenbaum 1922–

"He who runs his company on visible figures alone will soon have neither company nor visible figures to work with." - W. Edwards Deming 1900–1993

"Quality is free. It’s not a gift, but it’s free. What costs money are the unquality things—all the actions that involve not doing jobs right the first time." - Philip B. Crosby 1926–2001

Finally, it is widely known that the majority of strategic planning activities rely on a high degree of certainty and predictability. However, in the case of the COVID-19 pandemic and the effects such an outbreak had on the business community, neither of these applies.

The longer term sustainability of organizations’ is in jeopardy. However, those individuals that acted in response to such state of affairs and prepared themselves early on have a much greater ability to survive and thrive in the future.

It takes a great many minds to transform any organizations’ operational structure not to forget the equipped and environmental surroundings such businesses operate in. Over time the Quality Leaders referred to above have demonstrated to the world the impact of quality and the use of basic principles in achieving operational excellence no matter what the business environment has been like.