Interim Management and Covid19

European lockdowns are slowly coming to an end and business is gradually picking up. Nevertheless, many businesses and companies have been badly affected by this sanitary and economical crisis. Many questions arise today on how to safely and actively resume business operations. 8 actions should be taken into account for the restart.

1. Creating a detailed relaunch map: The crisis has shattered many of the assumptions and tools that business leaders rely on for decision-making, but for the restart, they will need to define a solid framework for action in a highly volatile environment.

2. Providing customers with safety guarantees that restore trust: Emerging from lockdown, clients will be more vigilant about health and increase their demands on safety. Companies will need to provide products and services that adhere to the most rigorous health and safety conditions, and be able to show or explain them to clients. 

3. Safeguarding the health of employees: Many employees are eager to return to work, but many are also worried about being able to do so safely. Companies will need to both reassure employees about safety and find ways to motivate them in a post-lockdown world.

4. Reviving demand: Perhaps counterintuitively, a McKinsey analysis shows that demand constraints were responsible for 85 percent of the weekly GDP loss recorded at the beginning of April in Germany and more than 70 percent in France. In a large majority of the 25 sectors they studied (17 in Germany and 20 in France), the effects of the demand shock on value added outweighed the impact of the supply shock. This was linked to the availability and productivity of labor or raw materials and components.

5. Rebooting operations and supply chain: The optimal restart of operations requires returning to the market at the desired speed to serve the demand accumulated during lockdown—but without going faster than the pace of recovery. At the same time, CEOs will seek to consolidate their company’s competitive position. 

6. Shifting IT and technology to restart mode: From the start of lockdown, chief information officers (CIOs) and chief technology officers (CTOs) have made heroic efforts to cope with spiraling new demands against tight deadlines. They have had to orchestrate the massive and sudden switch to remote work for employees, using new collaborative tools in a way that is both efficient and cybersecure. They have had to ramp up digital channels to serve customers, even as they solidify their company’s IT infrastructure at a time of very large load increases. For all these achievements, there’s still an opportunity to do more. The importance of digital to customers, suppliers, and to the entire economy has rapidly accelerated—and executives must speed up their digitization plans.

7. Steering the restart with care: The dual priority in this area will be as follows:

• Increase the speed of decision making.
• Provide impetus through the optimal use of working capital: Management of working capital requires special attention to ensure that cash flows will be sufficient to cope with the shocks of the crisis and recovery, regardless of which scenario takes place.

8. Sustaining value creation born from crisis and reinvesting in recovery: Many companies with the ability to continue at least partially during confinement periods had to design and adopt a radically new “under strain” operating model within a few days. Some have succeeded in pivoting a large part of their activities.

In such a difficult and uncertain context, companies will have to adapt their HR and hiring strategies and the fear and uncertainty of the future will be a crucial period for the human capital.

• The fear of hiring will more than probably lead companies to choose for external or temporary staff.
• This unprecedented situation will require companies to tackle issues where they do not have the appropriate person to deal with it. Interim management will more than probably be an interesting and unavoidable approach to tackle situations such as crisis management, restructuring, new strategy implementation, ...

In a short period of time, businesses will have to deep dive into a new phase of the restart with many variables that will remain uncertain for a long time. They may be far from having all their operational capabilities. They will lack links in their supply chain and have only restricted access to their various markets. Furthermore, they will have to live under the shadow of a restart of the epidemic with new confinement measures. Companies will be required to reinvent their business models, even as they continue to respond effectively to the aftershocks of the crisis.

Should an adapted staffing strategy be the spearhead of your global response to this global challenge, do not hesitate to get in touch with us at Arrowstone to discuss those challenges and tackle your needs together. Arrowstone being part of the SeniorManagementNetwork with associated member firms in 40 countries and partner branches in 19 countries including, Europe, Asia and Americas we will make sure to redirect you to the most appropriated of our partners.