The Covid-19 crisis has reached a critical stage which is forcing public health systems to take drastic measures to slow the spread of the virus.
Of course, the priority is - and must be - to contain the disease and limit its effects. But its economic consequences are also significant, and many companies are groping their way to understand, respond to, and learn from, current, rapidly changing events. Each cycle brings its share of unexpected twists and turns, and it is only after the fact that we will have a big picture of the situation.
However, given the very different levels of business preparedness, the potential for disruption, and the usefulness of better preparedness for future crises, it is worth trying to summarize what we have learned so far. . Based on our current analysis and on the support we provide to our customers around the world, we have identified the following twelve lessons, which allow us to react to current events, communicate, learn from them and learn from them. 'apply these.
1. Update the information daily
Things are moving at breakneck speed and the situation is changing daily. First, the epidemic appeared to be mostly contained in China and on track to be brought under control. Then, several rapidly growing epicenters of infection emerged outside of China, marking a new phase and requiring new strategies to limit the effects of the epidemic rather than contain it. Our team initially decided to communicate information every 72 hours, but we eventually opted for a daily cycle, not only for updating the data but also to rethink our overall approach.
2. Beware of the hype and news cycles
The media often focus on the news rather than the big picture and do not always distinguish between hard facts, assumptions and speculations. Yesterday's information is likely guiding how your organization views the crisis today. When faced with rapidly changing information, whether it's a new technology or an emerging crisis, we consistently tend to overlook weak signals first, then overreact to emerging issues before adopting a policy. more measured approach. As you assimilate the latest information, take a critical look at the source of that information before taking action on it.
3. Be aware that having access to information does not mean being informed
In our hyperconnected world, employees have direct access to many sources of information. Given the amount of external information available, executives may be led to believe that they have nothing more to add. Yet we have found that creating and sharing a regularly updated summary of the facts and their consequences is extremely useful. This saves time debating the facts - or making assumptions about the facts.
4. Be careful with expert opinions and forecasts
Experts in epidemiology, virology, public health, logistics and others are essential to interpret complex and constantly changing information. But it is clear that the opinions of specialists differ on issues as crucial as the best containment policies or the economic consequences. Therefore, several sources should be consulted. Each epidemic is unpredictable and unique, and we are still discovering the key features of today's. We need to take an iterative and empirical approach to understand what is going on and what is working - even when guided by expert opinion.
5. Constantly review your outlook
A comprehensive summary of the situation and an action plan to deal with it, once written down, can become a source of inertia. A Chinese proverb reminds us that great generals give orders in the morning and change them at night.
But large organizations are rarely so flexible. Managers are often reluctant to communicate their action plans until they are sure they are, and then they are reluctant to change them for fear of appearing indecisive or ill-informed, or of creating confusion in the workplace. within the company. A living document, dated and stamped "best vision to date" is essential for learning and adapting in a rapidly changing situation.
6. Beware of bureaucracy
Controversial, sensitive, or high-profile topics are typically reviewed by senior management, internal affairs, the legal department, risk management, and a whole host of other departments. Everyone will have a say in how best to communicate, which will lead to an overly generalist or conservative approach and a slow and tedious process.
It is essential to build a small, reliable team and to give it enough leeway to enable it to make strategic decisions quickly. Over-handling of communications can be harmful when big new information comes to light every day. Match your internal process to the rhythm of external events instead of taking it for granted.
A living digital document can save time by eliminating the hassle of submitting and validating multiple documents and also reduces risk since it can easily be updated or canceled as needed. Also, clearly distinguishing between facts, assumptions and speculations can help communicate a more complete and nuanced view.
7. Balance your answer by considering these seven dimensions.
Communications. Employees will certainly be exposed to conflicting information and will have apprehension and hesitation about what to do next. Be sure to convey your policies quickly, clearly and in a balanced manner. Provide background information and explain the reasoning behind these rules so that your employees can hone their own understanding of events and take action in the event of unexpected situations - what to do in the event of an organized vacation in a no-go area or how to deal with them. entrepreneurs, for example.
Employee needs. Restrictions on travel and gatherings will create needs among your employees: access to education, health care, daily supplies, etc. You must anticipate these needs, develop solutions to meet them and create a clearinghouse with all the information your employees need. Much of their needs will be specific to where they are located, so you will need to take a layered approach to setting your policies.
Travel. Your travel policies must be clear and specify authorized destinations, valid justifications for travel, necessary authorizations and the date of review of such policies.
Remote work. Be specific in formulating your policies - explain their framework, how they work and when they are revised. In some regions, such as China, teleworking is not a common practice. You should anticipate that further explanation will be necessary.
Stabilization of the supply chain. Try to stabilize your supply chains by using safety stocks or alternative sources and working with suppliers to remove bottlenecks. When quick fixes aren't possible, co-develop plans, put interim solutions in place, and communicate your plans to all relevant stakeholders.
Activity monitoring and forecasting. The crisis will certainly lead to unpredictable fluctuations. Set up rapid reporting cycles to better understand how your business is impacted, to identify where action to mitigate its effects is needed, and to observe how quickly operations are picking up. The crisis does not mean immunity when it comes to performance management: sooner or later the markets will judge which companies have handled the situation most effectively.
Be part of the overall solution. As a corporate citizen, you must support others within your supply chain, your industry, your ecosystem and your local authority. Think about how your organization can make a difference, whether it is in health, communication, nutrition, or any other area. Aim for the intersection of urgent social needs and your specific abilities - in other words, live your purpose.
8. Use the principles of resilience to develop your policies
Efficiency thrives in a stable world without the unexpected, and this mindset often prevails in large organizations. But in meeting dynamic and unpredictable challenges, the main goal is resilience - the ability to survive and grow during unexpected, changing and potentially adverse events. Our research on resilient systems indicates that they generally have six common characteristics, which must be taken into account in developing responses to the crisis.
Redundancy. Access to additional production capacity can help smooth fluctuations in the supply chain. In the short term, companies may be forced to seek solutions by turning to unusual sources, but in the long term, redundancy may be applied.
Diversity. Adopting multiple approaches to be successful may lead to a loss of efficiency but increase flexibility and resilience in a crisis. Likewise, the diversity of ideas can greatly enhance the development of solutions. Assemble a cognitively diverse crisis management team that will come up with more ideas for potential solutions, especially if the corporate culture encourages speaking out and respecting different points of view. Be careful not to treat the crisis in a one-dimensional way - as a strictly financial or logistical problem - and assemble your crisis management team accordingly.
Modularity. Highly integrated systems may be effective, but if they are disrupted they are vulnerable to the repercussions and may even collapse altogether. In contrast, a modular system - in which factories, organizational units or sources of supply can be combined in different ways - offers greater resilience. When a key Toyota brake valve supplier went up in smoke a few years ago, the supply was restored in just a few days, as it was possible to swap outputs between suppliers, even though they were dealing with different components. Ask yourself how you can reorganize your supply system in a modular fashion both in the short term and in the long term.
Scalability. Systems can be designed for optimization and maximum efficiency or for scalability - that is, constant improvement in the face of new opportunities, information and issues. Responses to dynamic crises such as that of Covid-19 must be scalable. In these situations, there is no known right answer and any predetermined answer is probably not the right one or may become obsolete over time. But it is possible to take an iterative approach and learn at every step to find more effective solutions. While many lessons will be learned after the fact, acting now to identify what works and make adjustments based on the results is probably the most effective strategy in the short term.
Caution. If it is impossible to predict the course of events or their consequences for Covid-19, one can imagine plausible pessimistic scenarios and test resilience under these circumstances. For example, we can test scenarios for a generalized global epidemic and for an epidemic limited to certain regions of the globe. As the focus shifted from containing the epidemic in China to tackling the development of new epicenters overseas, a new inflection point has emerged, with a very high level of uncertainty. To be on the safe side, companies would do well to review the worst-case scenarios and develop contingency strategies for each of them.
Integration. Businesses are actors in broader industrial, economic and social systems, which are also under great pressure. Those that do not take into account their supply chain or their ecosystem in a holistic way will have a limited impact. Solutions that solve problems for one particular business at the expense of the interests of others will generate mistrust and hurt longer-term business. Conversely, supporting its clients, partners, health system and social system in the face of adversity can foster lasting relationships based on benevolence and trust. In situations of economic stress, it is essential to apply our values, in a context where we are very likely to forget them.
9. Prepare now for the next crisis
Covid-19 is not the kind of challenge that comes up only once: we must expect other stages of the current epidemic and more in the future. Our research on the effectiveness of organizational responses to dynamic crises sheds light on a particularly critical variable for success: preparing and taking the lead. It is more effective to prepare now for the next crisis (or the next stage of the current crisis) than to react with an ad hoc response even as the crisis is hitting.
10. Don't settle for intellectual preparation
Many companies develop scenarios to be intellectually prepared for unexpected situations. But scenarios should be refreshed and customized based on the most vital business risks at all times. These risks, for example, have evolved with the emergence of new epicenters of the disease.
However, intellectual preparation alone is not enough. Something can be well understood but not ready for use. Ideally, the scenarios should be reinforced by exercises of strategic creativity (business wargame) which make it possible to set up a simulation and to observe behaviors under stress in order to learn from them. To better deal with organizational complexity, create a "war room", a crisis room with a small dedicated team with decision-making and executive power.
11. Reflect on what you have learned
Instead of heaving a sigh of relief and resuming your usual routine after the crisis is over, you should not miss the opportunity to learn valuable lessons. Even as the crisis unfolds, responses and their consequences must be documented for reconsideration and lessons to be learned. Rapidly changing situations expose existing weaknesses in companies - inability to make difficult decisions or an excessive tendency towards consensus, for example - which present opportunities for improvement.
In this regard, aviation safety, for example, is one of the most effective learning systems. Whenever an incident occurs, whether it is a minor unforeseen event or a tragic accident with loss of life, pre-established protocols are applied to examine the root causes with surgical precision and recommendations. bindings are formulated. Through this cumulative learning based on previous experiences, the airplane has - unsurprisingly - become one of the safest forms of transportation in the world.
12. Prepare for a New World
The Covid-19 crisis will certainly fundamentally transform our businesses and our society. It is very likely to stimulate areas such as online shopping, online education and investment in public health. It also risks changing the way companies organize their supply chains and pushing them less to depend on a handful of large suppliers. Once the urgency of the crisis is behind us, companies will need to consider the changes it has made and the lessons they have learned from them in order to include them in their plans.