BUSINESS
DISRUPTION: COVID-19
It is one thing
to have your meeting rescheduled because of an unexpected traffic snarl up that
held up half of your participants. With a bit of luck, you can get it back on
course in a week or two. It is another to plan for the business disruption caused
by the electioneering season in your country. With a bit of experiential wisdom,
you can plan for three or four months of low sales. However, the kind of global
and socio-economic disruption caused by COVID-19 over the first four months of
2020 is on a much grander scale. Indeed, the total “disruption” may still be unfolding. Its echoes and ramifications are yet to be fully absorbed. Data and
publications released by the World Bank and other financial institutions may be
in line with current trends, but the nature of this disruption may not be
quantifiable in GDP statistics. To assume that COVID-19 disruption is merely a
numbers game is to completely miss the point.
As consultants
we are often in a hurry to give client assurances of market trends. We want to reassure them that things will
get back to normal and we can get along with business as usual, with a few adjustments
of course. Again, to think so is to misinterpret the whole concept of disruption.
For example, to suspend interest payments for a distressed loan client for a season,
does not address the disruption the client has experienced or is experiencing.
This is the same as saying to the client, I appreciate you have some problems, but
sort yourself out and come back in a couple of months with my back payments! It
is of little value to tell a parent, who has lost his job, that schools are
opening next week, and as a special offer we have reduced fees by 50%. The parent
may not even have money for food, let alone school fees!
Disruption has three
features to it that need to be studied carefully, before a business takes “corrective”
action on its future. These are; Scale, Debility (impact) and Complexity. It is
fairly clear from the first paragraph that missing a meeting in the context of a
routine environment is annoying, but not overwhelming. Only one or two aspects
of life are briefly disoriented. Therefore, the scale of the disruption can be
quickly contained at a manageable cost.
Second, if you
can manage the debilitating cost of an event for a season, such as a general
election, it probably means that it was predictable and therefore with some
planning and stability in the wider environment, it is possible to get back on
course with your goals. “Scale” and “debilitating impact” are degrees of
disruption. However, if the environment which you relied on has to be
reconstructed for you to create new direction, then I would say we are dealing
with a fairly complex event. In this case, the event has to be observed and
understood before one makes commitments to address issues well beyond their
control. For example, a Hotel may be able to obtain funding to sustain its
closure during a lockdown. But once the lockdown is lifted, will the customers
come back? Potential customers emerging from a lockdown will have new
priorities informed by all manner of considerations. These may range from family concerns, to the loss
of interest in travel, to the adoption of new health and dietary habits, to
political dissatisfaction with the inability of “technology to save humanity”, to an emerging new found spirituality in the knowledge of God!
While it is
indeed important for governments, society, business, employers and employees to
get on with the business of living, disruption does not provide for off-the-cuff
solutions. Indeed, while business recovery and continuity are important, disruption
requires a more reflective and intuitive approach to successfully come through its
challenges. Traditional reactive and proactive management strategies
may not address the full circumstantial reality. In which case, it may be wise to
observe the disruption with some patience to consider how the convergence
of the scale, debilitating impact and the complexity of issues disruption presents,
are likely to affect long term outcomes, before taking short term action.
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