Learning from the crisis to become Resilient and Stronger Together

As the Covid-19 pandemic continues to rage, and we remain focused on the health and safety of our employees, our liquidity and the safe restart of production, it is also the moment to identify the key lessons to enable us to prepare for the future. If we do not do this now, the temptation will be to return to “business as normal” as quickly as possible. That would be a mistake.

It would be a mistake because whilst this particular global health crisis was not anticipated, we can be sure that other crises will come.  Whether these are environmental, technological, geopolitical or societal they will become more frequent and of greater magnitude than ever before.

One thing this crisis has demonstrated is the lack of global resilience.

In order to build this resilience, society, industries and companies must now move towards a new economic paradigm. One that is not only focused on short term financial performance, but which takes a more holistic and sustainable perspective across the whole ecosystem. Short term performance is essential but must be reinforced with a balanced set of key indicators for resilience. Some steps have already been taken through transformation initiatives and efforts to reduce CO2 emissions. But it is now the moment to step up, in a concerted and collaborative way to the future challenges.

Going forward, the industrial footprint of nations will be reassessed, and selective relocalizations will occur. The crisis has also shown the limitations of complex global supply chains and the need to rethink logistics and production locations. It has shed light on the need to invest in R&D and industrial assets: competitiveness and resilience can be achieved through the acceleration of digitalization and the adoption of new technologies.

Global corporations are well positioned to show the way. Many of us experienced the Covid-19 crisis first in China and were better prepared to be able to react quickly when the pandemic spread to other areas of the world. The ability of global industries to mobilize teams and unite their efforts to produce locally and in industrial quantities the essential supplies has been remarkable. The immense resources invested globally in research and development – as is the case for example for Covid-19 – are then used to finance local research teams which are coordinated internationally and with full transparency. This system gives us the ability to react quickly and to become increasingly sophisticated in our response to crises.

Cash is also a centerpiece of resilience. Companies that generate cash are best positioned to control their destiny. Make or buy decisions should be made by putting more attention on cash than on margin capture, and asset sharing across the value chain should be multiplied to reduce capital intensity.

We will get through the current crisis, but we must learn the lessons for society and for corporations, because we are accountable to future generations to lead the change on climate change, biodiversity loss, and the accumulation of public debt. Through increasing our ability to work transparently and harness our collective intelligence in an ecosystem across industries and with the public sector, we will become resilient and stronger together.