REBOOTING the World post COVID19

As the crisis deepens across the world with COVID19 forcing disruptions across the socio-political and economic parlance, it may well be said that we may see one of the deepest recession of our times sooner or later. With the World Economy projected to go negative by 3% points for the entire 2020 with an impact of almost $2 trillion, we are bound to see big disruptions on their way in the next few months. Needless to say, almost all industries have been impacted with the largest impact being on the Oil and the Travel Industry. The plight of the economies can well be summed up, when the Crude Oil price went $0 per barrel for the first time. While all the industries show negative growth, the lesser impacted sectors like Retail and Consumer Product, Telecom, healthcare and pharma verticals will have to think of not just how to stay afloat in these troubled waters but also, strategize in terms of how to adapt to the New Normal. Surely, these are unprecedented times that need unprecedented measures by Organisations to stand tall once the crisis is over.??And with the inevitability of lockdowns looming large in derailing the economies, Organizations need to well pause, take a step back and rethink their strategy on the how world will behave POST this crisis.?

What`s the Impact?

Economic Turmoil

Well, while many organizations have withstood the economic shock till now, they might well prepare themselves for a long lasting effect, including erosion in consumer confidence that will drive recessionary behaviour. The economic cycle is pretty straight forward, if we go by the recessionary behaviour, due to lack of consumer confidence, the spending patterns will go into discretionary mode, which means, many companies may not be able to sell what they produce, leading to losses. If these losses sustain for longer period, they might find it difficult to hold on to the workforce, leading to job losses. As a result these people after having lost their jobs, again spend less and less leading to another cycle and so on leading to an economic depression. If we relate this to the current scenario, Governments across the world have rolled out huge Economic packages for the economy to be able to sustain itself, however, the question still looms in our mind with regards to the length and duration of this epidemic. The figure below is an ample example of how seriously the world is responding to the crisis.

Besides these Fiscal stimulus packages, Governments across the world are also thinking of bringing on several economic measures to curtail the economic depression cycle e.g. US has just approved fiscal stimulus package which also has a big portion of it going towards paycheck protection. Indian Government too is looking at rolling out a similar package to support MSME. Assocham, the industry body in India,??believes that in keeping up with most economies of the world to institute stimulus measures with 10 per cent of the gross domestic product, the Indian economy would need a transfusion of over USD 200 billion with an ability to go up to USD 300 billion, over the next 12-18 months. Therefore, make no mistake, the whirlwinds are pretty much in strength and weathering the storm is what we need to embrace for.

Changes in Consumer Behaviour during the Crisis

More than 75% of consumers globally expect the impact to be felt for than 2 months and about 50% expect the duration to be far more than 4 months. As a result as per the NRF survey conducted recently, 9 out 10 consumers have already changed their traditional shopping habits focused specifically on basics such as food, household supplies, and personal care items, as well as home entertainment. Beyond this, it goes without mentioning that the Digital Adoption among consumers have skyrocketed, and is there to stay for long. As per a Mckinsey report, 50% of consumers have ordered products online that they would normally purchase at the store. This is significant, considering that all the talk around the world around Data, AI & ML and in larger parlance the Digital Enterprise is based on the Digital adoption rate of consumer, which will now get a major push across all sectors. Hence, therefore Customer Experience (CX) is definitely going to be one of the major initiatives across the board to drive the next phase of the Digital Enterprise. The same Mckinsey survey also points to the fact that 6 out 10 consumers say they are worried about going to the store due to fear of being infected. And, hence their preference for self-checkout rather than assistance from cashiers during corona virus pandemic. Even in countries like Indonesia, 40% claim they will use more self-checkouts in the future

Organization are under a sledge Hammer

The biggest challenge for the companies during this crisis is to maintain business continuity and ensure productivity considering worldwide lockdowns. They have to do this keeping Employee health and safety, Financial Risk, Information Security Risk, Fraud and IT risk as their priorities to start with. Definitely, this is a considerable ask for all at helm running the show.?

Many, in a makeshift arrangement, have already shifted to a remote way of working with the bare minimum tools as an act of survival. While we do realise its importance, it also points towards our lack of preparedness to??Workplaces in these scenarios are being accommodated to make way for the future way of working. Many organisations have already made plans that moving forward, they will adopt this Remote work culture across the organization to save money and increase productivity. TCS, infact plans 75% of its workforce to work remotely.?

The root cause and The Future

Pandemics and the Economy

According to the World Economic Forum, Coronavirus COVID-19 is part of a pattern of increasingly frequent epidemics that have coincided with globalization, urbanization and climate change. As Coronavirus spreads, so does the sobering reality that epidemics will become more common with our increasingly connected age. Additionally, the WHO says there are?7,000 signals of potential outbreaks every month. And in June 2018, for the?first time ever, the world faced six of the eight categories of disease highlighted in the WHO Blueprint priority diseases list.

We don’t know when the next ebola outbreak will come but we do know it will come again, and again, and again.

??????????????????????????-Dr. Thomas Inglesby, director of Johns Hopkins Centre of Healthy Security

For instance,?over 2,000 people were quarantined?in their homes in southern Indian state of Kerala during the Nipah virus outbreak. In Nigeria, the levels of Lassa fever are ”unprecedented,” Kenya is fighting the frightening Rift Valley Fever by slaughtering camels and goats?that are suspected hosts, and Saudi Arabia has found?four distinct clusters?of MERS ― two of which are in health centers.

According to International Working Group on Financing Preparedness, The Annual Global Cost of moderately severe pandemics is roughly $570 billion or 0.7% of global income, which is comparable to other top priority threats, such as climate change.

Climate Change and the Economy

Things are equally mirky at the climate front too. According a new report from researchers at the University at Cambridge, 7% of the Global Economy will be wiped out by the end of the century unless action is taken to stop our planet from overheating. If the past 2 years events are any indication, it would not be wrong to for us to estimate that the climate change is happening faster than ever and hitting us harder than we thought. Extreme heat waves on land and in the oceans, massive wildfires, floods and hurricanes have been seen to have occurred within this decade. In 2018-19, as many as 2,400 Indians lost their lives to extreme weather events such as floods and cyclones, according to the environment ministry.?As per IMD (India Meteorological Department), these events are increasing in both frequency and intensity. If frequent floods in 2019, like the ones in Odisha, Maharashtra, Kerela and Karnataka in August are any indication, this surely needs urgent attention. For example, the flooding in Mumbai in September 2017 due to extreme precipitation (330 mm in 24 h) and that of Chennai, which received 483 mm precipitation in 48 h in November 2015, which had a devastating impact with economic loss of over $3 billion. Infact, as per a recent study published in the peer-reviewed Climate, Disaster and Development Journal in January, 2020, Intense floods and storms around the world could double in frequency in 13 years, as climate breakdown and social-economic factors combine.

The Need of the hour

While we do see the economic impact here, the societal impact is far larger that anyone can imagine. These numbers are simply unfathomable, calling for changes and transformation in the way we operate as societies, businesses and economies at large. Amidst the gloomy stuff I have highlighted, I have to say, not all is lost and there have been measures taken globally by governments to take a course correction. However, the scale and seriousness with which this needs to be tackled cannot be done individually only by the governments or corporates alone. This fight has to go down to the level of coordinated efforts as a global community where individual masses start contributing in their own way for the betterment of the society at large. Each individual stakeholder has to contribute towards building a sustainable transformation model that is??environment

A transformation, that means we need to significantly look at renewed focus on sustained, collective and constructive efforts led by industrialists, environmentalists, NGOs, People and the Government off course, towards the larger interest of

·?????Societal Transformation where??sustainable and environment friendly living is driven by collective interests and awareness at the core, with the need for behavioural change.?

·?????Economic Transformation supported by policy measures for increased focus on public health, economic resilience, climate change and demographic risk are adopted

·?????Business Transformation that incorporates resilience and is conscious on sustainability and corporate social responsibility.?

·?????Technological Transformation where technology becomes the core to enable the above objectives

In the interest of the length of this article, I am refraining to go towards the first 2 transformational exercises, as they will occupy a huge mindshare and are too broad to be covered. Business and Technological Transformation is an area that will be the focus to drive change. So, coming back to the current outbreak, while anxieties across the corporate world is towards the uncertainty around how long the situation lasts and its impact, it is also absolutely necessary to recalibrate and reassess how the industry will be reshaped and what the New Normal looks like.

Prepare for the “New Normal”

What`s the New Normal? Dealing with uncertainty is the new business normal. Amidst this uncertainty, the world around us is going to change significantly, and in the process questioning the status quo all along. This has built the base for the rise of a resilient yet conscious Digital Enterprise, which has built in capability, adaptability and agility to proactively identify and prioritize threats using technology as the core. The core principles that define this Digital Enterprise is Business Continuity, Risk Allignment, Sustainability and Social responsibility. Hence, it’s important for organisations to step back and re-assess their business and technology strategy in the current economic environment and potentially plan to transform themselves post COVID19, which gives them significant leverage to scale faster as the economy recovers. In the 2008 downturn, the top 20 percent of performers reduced costs more quickly and were faster to invest as the economy recovered. I am not saying the conditions are same, however, I do believe that this is the right time to Re-Assess one`s?Digital Strategy??in terms of changed business dynamics and environment and prepare for the New Normal. This ideally incorporates the below assessments

·?????Re-Design?Digital Workplace Strategies to adopt Employee Experience driven remote way of working.

·?????Assess & Design Zero Touch CX Experience in be able to build safe and trust driven relationship with customers in line with the changed customer behaviour.

·?????Re-Assess Supply Chain and Operating Model to re-calibrate the impact and build or design the new operating order in view of the New Normal.

·?????Re-Assess your current Eco-System and its preparedness for the POST COVID19 era: This may well mean re-defining partnership and in some cases working with partners on co-creation strategies to scale in the post pandemic era.?

·?????Re-Assess your Technology, Data and Security Strategy?in light of the changed market environment

·?????Design and Develop a Resilience and Business Continuity Strategy

While re-assessing these 5 domains, it’s important to understand the importance of building synergies between the Business and Technology strategies that will define the roadmap for the New Digital Enterprise.??Falling back on Charles Darwin theory that is extremely relatable in today`s scenario.?

“It’s not the Strongest of the Species that Survives, nor the most Intelligent, It is the one that is the most Adaptable to Change”

It’s time to Reboot the world in order to rebuild our future!!!!

References

Date : 24thApril, 2020??Article Date:- 4thMarch Author- Kate Whiting https://www.weforum.org/agenda/2020/03/coronavirus-global-epidemics-health-pandemic-covid-19/

Date : 24thApril, 2019??Article Date:- 5thMarch 2019, Author- Ryan Mortared https://www.weforum.org/agenda/2019/03/our-economy-is-woefully-underprepared-for-biological-threats/

Date : 19thJuly, 2018??Article Date:- 5thMarch 2019, Author- Ryan Mortared https://www.huffingtonpost.co.uk/entry/outbreaks-epidemic-preparedness

Date : 25thApr, 2020??Article Date:- 30thSept, 2019 , Author- Katherine Rooney, Climate change will shrink these economies fastest https://www.weforum.org/agenda/2019/09/climate-change-shrink-these-economies-fastest/

Date : 25thApr, 2020??Article Date:- 21stJuly, 2019 , Author-Vishnu Padmanabhan, Sneha Alexander, Prachi Srivastava, The growing threat of Climate Change, https://www.livemint.com/news/india/the-growing-threat-of-climate-change-in-india-1563716968468.html

Date : 25thApr, 2020??Article Date:- 8thJan, 2019 , Author- Kunal Kambli, Top 5: Biggest floods to affect India in 2019 https://weather.com/en-IN/india/news/news/2020-01-08-top-5-biggest-floods-affect-india-2019

Date : 25thApr, 2020??Article Date:- 24thJan, 2020 , Author- Emily Holden, Frequency of intense floods and storms could double in 13 years, says Study https://www.theguardian.com/world/2020/jan/24/climate-crisis-study-flood-storm-study