Preparing for the Aftermath of COVID-19 Pandemic

The Sobering Realities

The coronavirus COVID-19 pandemic is the highly disruptive event and defining global health crisis of our time and possibly the most significant challenge many nations have faced since World War 2.

“The year 2020 could see the worst global economic fallout since the Great Depression in the 1930s...."

“The year 2020 could see the worst global economic fallout since the Great Depression in the 1930s with over 170 countries likely to experience negative per capita income growth due to the raging coronavirus pandemic”, IMF Managing Director Kristalina Georgieva said in a Video Release on "Confronting the Crisis: Priorities for the Global Economy" made ahead of the virtual Spring meeting of the International Monetary Fund (IMF) and the World Bank.

According to her, the world is confronted with a crisis like no other. COVID-19 has disrupted our social and economic order at lightning speed and on a scale that we have not seen in living memory. The virus is causing a tragic loss of life, and the lockdown needed to fight; it has affected billions of people. Lives have been disrupted as what was normal just a few weeks ago — going to school, going to work, being with family and friends — is now a huge risk. Observing that the world is faced with extraordinary uncertainty about the depth and duration of this crisis, she said that it is already clear, however, that global growth will turn sharply negative in 2020. She said IMF anticipates the worst economic fallout since the Great Depression.

"The virus is causing a tragic loss of life, and the lockdown needed to fight; it has affected billions of people."

The World Trade Organization (WTO) has announced that world trade is expected to fall by between 13% and 32% in 2020 as the COVID 19 pandemic disrupts normal economic activity and life around the world.

“This crisis is first and foremost a health crisis which has forced governments to take unprecedented measures to protect people’s lives,” WTO Director-General Roberto Azevêdo said. “The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself.”

?“The immediate goal is to bring the pandemic under control and mitigate the economic damage to people, companies and countries. But policymakers must start planning for the aftermath of the pandemic,” he said.

"...the shock to the global economy from COVID-19 has been both faster and more severe than the 2008 global financial crisis (GFC) and even the Great Depression."

According to the eminent U.S. economist, Nouriel Roubini, who is a Professor of Economics at Stern School of Business of New York University; the shock to the global economy from COVID-19 has been both faster and more severe than the 2008 global financial crisis (GFC) and even the Great Depression. In those two previous episodes, stock markets collapsed by 50% or more, credit markets froze up, massive bankruptcies followed, unemployment rates soared above 10%, and GDP contracted at an annualized rate of 10% or more. However, all of this took around three years to play out. In the current crisis, similarly dire macroeconomic and financial outcomes have materialized in three weeks.

The International Labour Organization (ILO) has reported the labor market impact of the COVID-19 pandemic, specifically the devastating effect on workers in the informal economy and on hundreds of millions of enterprises worldwide. "The continued sharp decline in working hours globally due to the?COVID-19 outbreak?means that 1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed, warns the International Labour Organization".

"1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed...."

The ILO further adds "Worldwide, more than 436 million enterprises face high risks of serious disruption. These enterprises are operating in the hardest-hit economic sectors, including some 232 million in wholesale and retail, 111 million in manufacturing, 51 million in accommodation and food services, and 42 million in real estate and other business activities."

The pandemic has already transformed into an economic and labor market shock, affecting not only supply (production of goods and services) but also demand (consumption and investment). Disruptions to production, initially in Asia, have now spread to supply chains across the world. All businesses, regardless of size, are facing severe challenges, especially those in the aviation, tourism, and hospitality industries, with a real threat of significant declines in revenue, insolvencies, and job losses in specific sectors. Sustaining business operations will be particularly tricky for Small and Medium Enterprises (SMEs).?

Prospects for the economy and the quantity and quality of employment are deteriorating rapidly. While updated forecasts vary considerably - and largely underestimate the situation - they all point to a significant negative impact on the global economy, at least in the first half of 2020. These worrisome figures show growing signs of a global economic recession.

Swift and coordinated policy responses are required at the national and global level, with strong multilateral leadership, to limit the direct health effects of COVID-19 on workers and their families, while mitigating the indirect economic fallout across the global economy.?

Challenges of Re-opening the Economy

In any health crisis, a government's priority is and should be, the health of the residents. Over the past months, we have observed, how countries worldwide have been racing to slow the spread of COVID-19 by testing and treating patients, carrying out contact tracing, closing borders, limiting travel, quarantining citizens, closing of schools as well as non-essential businesses, and enacting new regulations to ensure implementation of safe distancing rules. In Singapore, for nearly two months, a stringent set of these preventive measures collectively called a "circuit breaker" was imposed to prevent the spreading of the virus in the community by requiring people to stay home.

It is regrettable and inevitable that such containment measures have resulted in both social and economic burdens for both families and businesses. Businesses, especially those deemed to be in the "non-essential", have been clamoring their governments to allow them to recommence their businesses. The greatest challenge in the current crisis, where a vaccine has yet to be found, is to establish the right balance between preventing not only the damage inflicted by COVID-19 but also that which comes from a severe contraction of economic activity.

There are other challenges associated with lifting the lockdown on a large scale or reopening the economy by imposing only strict rules on the wearing of masks, social distancing, and other rules for the containment of the pandemic and applying them to every business? This is what many corporate leaders clamor for, but it faces limitations: Will there be enough masks? Will people follow the guidelines, for example, by installing privacy-preserving contact tracing applications on their smartphones?

In Singapore, concerns about personal privacy and data being used by the government for surveillance purposes have stopped residents from downloading Singapore’s contact-tracing app to combat the spread of the coronavirus. Singapore has recently decided to go further and do that on a massive scale by giving every one of its 5.7 million residents a wearable tracking device that will reveal if they have come into contact with COVID-19 infected people.

Challenges and Opportunities for Reopening of the Economy

We have to accept the fact that is a matter of both life and death, and prosperity or poverty, as a deep recession is likely to cause widespread hardship, therefore, find Governments need to find scintillating ways for reopening businesses while minimizing health risks as we have seen where some countries that had already reopened are closing down again after sudden spikes in infections.

While Singapore's circuit breaker formally ends on 1st June 2020, the COVID-19 multi-ministry task force announced the economy would then be reopened gradually in three phases. Prime Minister Lee Hsien Loong reiterated the importance of opening the economy in phases in his traditional May Day Rally this year.

1) In the 1st phase, called "safe reopening": more people will be allowed to return to their workplaces, with priority given to critical sectors and businesses that operate in settings with lower transmission risks.

2) In the 2nd phase, called the "safe transition", people will gradually be able to resume more social activities. More businesses will be allowed to reopen, including tuition and enrichment centers, gyms and fitness studios. However, employers must implement safe distancing measures and ensure that those who can work from home continue to do so. In this phase, small social gatherings and dining at food and beverage outlets could also be allowed.

3) In the 3rd phase, Singapore will move to a "new normal" until a vaccine is found. By this time, social, cultural, religious and business gatherings are expected to have resumed. However, limits will be put in place on gathering sizes.

The phased reopening of Singapore's economy will potentially reduce the risk of having a second wave of infection while acknowledging that there are potentially more jobs that will be lost as businesses.

"The phased reopening of Singapore's economy will potentially reduce the risk of having a second wave of infection while acknowledging that there are potentially more jobs that will be lost as businesses."

Similarly in Malaysia, Prime Minister Muhyiddin Yassin announced earlier in April 2020 that the government will reopen several selected sectors of the economy in stages during the extended "Movement Control Order" (MCO) period based on healthcare guidelines and strict movement control.?On 4 May 2020, after 47 days of the lockdown, most businesses were allowed to resume operations.?

"The economic impacts of the COVID-19 pandemic on the private sector, industry and jobs are expected to be large in Malaysia, especially for the Small & Medium Enterprises (SMEs) as they constitute 98.5% of total firms."

The economic impacts of the COVID-19 pandemic on the private sector, industry, and jobs are expected to be large in Malaysia, especially for the Small & Medium Enterprises (SMEs) as they constitute 98.5% of total firms and are likely to be severely affected with fewer resources to absorb the shock. Prior to the pandemic, the Malaysian Government has previously announced in 2018 that SMEs are expected to contribute 41% GDP by 2020.

Earlier today (7th June 2020), Prime Minister Muhyiddin Yassin announced that the Conditional Movement Control Order (CMCO) currently enforced will end on June 9 and will be replaced with the Recovery Movement Control Order (RMCO).

In a special televised address,?Muhyiddin said the RMCO would take effect from June 10 until Aug 31 with more lenient restrictions. Under this new phase, interstate travel will?be permitted, except for areas placed?under Enhanced MCO (EMCO).

Role of Business Leaders in the New Normal of the Post-COVID-19 Era

For some businesses, in particular, small and medium enterprises, the challenges are literally about survival. In contrast, for others, they mean maintaining operational continuity. For others such as those in video conferencing and e-commerce or online shopping, they involve responding to sudden considerable increases in demand due to the lockdowns and "work-from-home" (WFH) measures implemented by the governments across the world.

CEOs and business leaders have a crucial role to play in ensuring their organizations get through this crisis, and the decisions they are taking today and policies being instituted, usually from their homes, connected digitally to their teams, will have a significant impact on the future of their businesses.

COVID-19 is hammering companies' bottom lines, from productivity to profits. Leaders that put employees' safety and health first are demonstrating their humanity. This people-centered mindset is crucial for the organization's survival and long-term development as employees are the backbone of the organization and eventually create the organization's competitive advantage. Companies are highly recommended to adopt the "PPT" mantra, which is putting People (employees) over Process and Technology. Putting Employee First philosophy is prudent as the customer interfacing staff is the most critical group because they interact with customers and are the most effective educators of other stakeholders.

"Companies are highly recommended to adopt the "PPT" mantra, which is putting People (employee) over Process and Technology."

Other measures would include ensuring the right personal protective equipment and other materials, such as sanitizers, are available to all staff. It also involves setting clear and unambiguous rules to ensure safe or social distancing that covers all the company's business activities, so there is no room for doubt. Work-from-home (WFM) policies need to be formulated and proper support for employees working virtual working needs to be enabled adequately with the right IT equipment.

It is also recommended that communication between staff needs to be enhanced significantly with daily communications updates from top management. It is crucial to keep staff informed continuously in some detail, so that staff understand, rather than just comply. The HR function has a vital role to play in communicating these messages to ensure full staff understanding of what's behind them, as well as access to the right equipment.

The role of the leaders is to maintain positivity and morale to allay the staff's fears of job and income losses, which is common during such a crisis. At the same time, leaders need to be transparent and authentic in their messaging.

Transparency requires leaders to openly and proactively share relevant information to employees in a timely, frequent and digestible manner; give accurate information regarding what is happening, what the impact is, and how the company is handling it; and offer clear guidance on what workers should be doing. It also means encouraging employees to speak up and share their feedback and concerns. This kind of openness fosters trust and reduces uncertainty – especially crucial in a crisis.

Leaders that authentically share vulnerability can demonstrate the human side of leadership. Employees look up to leaders for assurance and support. They do not necessarily expect CEOs to be superheroes. To communicate authentically, CEOs should stay true to their values and beliefs and keep their promises. They also need to be self-aware of what they're capable of, and genuine in their communication with employees – even when they don't know what's going on.

In a video message to the employees, Marriott CEO Arne Sorenson demonstrated this when he didn't try to sugarcoat the losses his company has suffered in the crisis.

Role of HR Leaders in the Aftermath of the COVID-19 Crisis

The Role of HR leaders was discussed in the recently published article “The Future Role of HR in the Aftermath of COVID-19 Crisis: Transformation of the digital-driven workplace in the ‘new normal’”.

“HR, in partnership with business leaders, needs to prepare for tomorrow's workforce where they face twin challenges of producing growth and preparing for the new, often unknown opportunities the future will bring. They must answer a more profound question:?

How can we deliver exceptional performance by developing our people to thrive in this highly disruptive and digital workplace?”?(Bawany 2020).

"This requires HR to have a clear vision for an uncertain world – one that sets out transparently the plans that allow people to take on new and redesigned which could contribute towards a compelling people experience. Hence, HR has an exciting and challenging road ahead of itself!”

“In the aftermath of the pandemic, digital transformation has become more urgent than ever. There will be a strategic shift in how technology will be leveraged to enable how and where people work. HR will play a key role in supporting the new ways of working including the provision of the relevant digital tools. Further, there is a need for well-defined "Work-From-Home" (WFM) guidelines and policies for the entire workplace ecosystem supporting a fully remote workforce with capabilities and technologies enabling them to support critical business operations.”

“Most businesses are experiencing the "knowing-doing gap" where they are failing to transcend the gap between knowing what is needed and doing what is required to combine emerging technology with new processes and skills to remain competitive. This presents a significant risk to the organization, its operating model, and the talent it acquires and retains. While the presence of a contingent workforce and access to technology such as artificial intelligence, machine learning, cloud computing, data analytics and robots, opens doors to opportunities for the organization, it also stokes fears of redundancy amongst existing employees which needs to be addressed promptly and effectively as this would impact on the organizational climate, employee morale, productivity and performance.”

The full article is available below.

Digital Transformation of Small & Medium Entreprises (SMEs)

Small & Medium enterprises (SMEs) with unsustainable business models will likely fold up. Before the pandemic, many of these companies were already under tremendous pressure to adopt digital transformation to achieve efficiency and business competitiveness. As businesses reopen after the lifting of the lockdowns in various countries, many are likely to find some of the antiquated business operating models and processes they’ve used in the past may no longer be relevant in the post-pandemic era.

COVID-19 has paved the way for digital transformation as businesses including SMEs shift operations to cope with mandatory office closures, restricted business travels and supply interruption.

As far back as April 2018, the author has called for the implementation of digital transformation initiatives which is pivotal to the future of SMEs.

Inevitably, all organizations, not only SMEs, have to demonstrate organizational resilience, agility and speed as they are operating in a constant state of flux, and businesses are rapidly adapting their strategies to evolve with rapidly changing consumer behavior or preferences for those in B2C and customer demands for the B2B market place as research have shown. For some businesses, this has meant moving from B2B to a direct-to-consumer model or utilizing virtual streaming to replace meetings, conferences and events.

As SME businesses and their employees manage with the 'new normal', more effective ways of delivering the products and services and for employees to do their jobs more productively is crucial through leveraging digital technologies.

In Singapore, the Government has allocated more than S$500 million to support the digital transformation of businesses amid the COVID-19 outbreak with various support programs and grants for the SMEs to go digital.

In Malaysia, the Government announced the allocation of RM700 million for grants and loans to finance the digital transformation of small-medium enterprises (SMEs) as part of the nation's major digitization and e-commerce push under "Penjana" recovery plan.

In Conclusion

The rapid evolution of digital processes has sparked a new mindset and mental agility, focusing on the future with an openness to try new technology. Obstacles that previously prevented SMEs businesses from adopting innovations rarely related to the technology itself, but were tied to the reluctance to disrupt existing ways of working. Since businesses have had to adapt to remote working, teams have become more versatile and are replacing the ‘how things have always been’ mentality with a ‘let’s try it and see if it works’ approach.

There is no perfect strategy nor playbook available to get through this once-in-a-century pandemic, with as little loss of life and at the same time protect livelihoods. Businesses must navigate the financial and operational challenges of the pandemic while rapidly addressing the needs of their employees, customers, and suppliers while urgently addressing supply chain disruption, stabilizing revenues, aligning their businesses with evolving demand and identifying new growth pathways. These near-insurmountable challenges can be achieved with organizational resilience, agility, speed and most importantly with leaders and employees demonstrating the 'cognitive readiness' mentality is crucial to thrive or even survive for most in the 'new normal' of the post-pandemic era.

Adapted from: 'Leadership in Disruptive Times' (Business Expert Press, July 2020).

This latest book offers insights on the best practices frameworks, tools and approaches on how organizations including SMEs could prepare for the post COVID-19 workplace by creating a culture to support the digital transformation of their organization.

For details of the book and advance orders, please visit https://www.businessexpertpress.com/books/leadership-in-disruptive-times/ or email us at [email protected].

Abstract of the Book "Leadership in Disruptive Times" (2020)

Disruption is happening everywhere and in every aspect of our lives. It is happening at a scale and speed that is unprecedented in modern history impacting diverse industries, from financial services to retail, media, logistics & supply chain, manufacturing, education, professional services, and life sciences. Leaders are finding it challenging to navigate the near-insurmountable challenges resulting from the impact of these disruptive events on their operations and have to reinvent their operating and business models to ensure their survival.

?Not every disruption is driven by advances in technology as we have seen in the case of the COVID-19 pandemic since early 2020 where organizations all over the world face an uncertain future in a global business environment that is highly disruptive and increasingly Volatile, Uncertain, Complex, and Ambiguous (collectively known as VUCA).

We face a new era of radical uncertainty and disruption brought about by other challenges such as climate change, financial crises, terrorism, Brexit, demographic changes in the labor market, health/disease risk, mass migration and rapid developments in digital technology and its impact on transformation at the workplace. The management of shocks and crises is becoming an everyday occurrence. Organizations also need to be agile, and leverage opportunities and drive innovation to remain competitive in the face of challenging conditions.

The right leadership is critical for organizations to thrive in a disruptive business environment. How should we define leadership in this environment? Are the current leadership practices and competencies still relevant in the face of such disruption? How can leaders set themselves up not only to survive but also to thrive in navigating the challenges of disruptive events and crises?

This book provides insights into an understanding of disruptive leadership. It explores the transformation of organizations in today’s highly disruptive, increasingly VUCA and the digital-driven era of the Fourth Industrial Revolution (also known as Industry 4.0). It builds the case for organizations to revisit and, at times, reinvent their people strategy, internal systems and processes and deploy the technologies that would suit disruptive times.

The book also examines the fundamental qualities of disruptive leadership that would distinguish successful leaders as they guide their organizations through the disruption caused by the COVID-19 crisis and the digital transformation in the workplace.

Format Availability of the Book

One of the most important aspects of this book is going to be “Keeping Up to Date” due to the speed of the Disruption the world is currently experiencing.?This book is going to be one of the only few Business Leadership titles published as a Dynamic Book along with traditional print and e-versions.?

This means as and when relevant research articles, journals, videos, and/or any other content related to the themes of this book is available, it will be updated accordingly and these updates will automatically be pushed to its readers/subscribers.?The only way to have a competitive edge as a leader is to not only have the best information but to have the most current information and this is what readers/subscribers will receive from the Dynamic Delivery of this Title.?

For advanced orders for the printed or e-version of the book “Leadership in Disruptive Times” (which will be available globally in mid-July 2020), please visit https://www.disruptiveleadership.institute/book/.

Leadership 4.0 Masterclass "Leading in Disruptive Times" based on the book is now available.

For further details, https://www.disruptiveleadership.institute/masterclass/ or email us at [email protected].

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