Arthur D. Little Report Reveals Global CEOs’ First Learnings from COVID-19
Global management consultancy Arthur D. Little released first learnings from global CEOs in the telecoms, transport and utility industries who delivered critical infrastructure services in Asia and Italy during the early spread of COVID-19.
The Leading businesses through the COVID-19 crisis: First learnings from Hong Kong, Italy and Singapore Report is available free to help businesses facing the worst of COVID-19 deliver vital goods and services safely.
The report urges companies to put people before short-term profits, avoid step-by-step measures, delegate authorities, intensify employee communications efforts, and work closely with governments, authorities and communities.
“We can learn from one another, build resilience in our economy, and emerge from this crisis ready to innovate and restore,” said Ignacio García Alves, Chairman and CEO of Arthur D. Little. “This report gives CEOs unique peer-to-peer insight from leaders who maintained effective operations through the worst of the pandemic and are now emerging ready to rebuild.”
The report identifies five areas of focus:
- Move fast, assume the worst, be comprehensive, and secure employee safety first and operational continuity next.
- Be prepared to spend most of your time on employee communications, focus on positivity and morale, and listen as well as talk.
- Create separate A and B teams for critical operations, support suppliers and ecosystem partners, and be innovative with cash management.
- Collaborate with government and authorities, engage with unions, and support local communities.
- Start realistically planning for recovery now, and take advantage of potential opportunities from the “new normal”.
- The report also names key priorities for business continuity and risk management, including using digital tools to establish dynamic, sensing risk management systems across internal operations and external supply chains.
Karim Taga, Managing Partner of Arthur D. Little’s Global TIME Practice, said, “Today’s CEOs are being called to lead through this crisis and emerge ready for new opportunities. Companies, governments, and individuals must all focus on protecting public health and defeating this pandemic together.”
Saverio Caldani, Managing Partner of Arthur D. Little Italy and Spain, said, “As we work to support our clients in Italy through the worst of COVID-19, their experiences will help businesses everywhere navigate this new world.”
The report summarizes the key areas participating organizations encountered unforeseen problems regardless of established crisis management and business continuity plans:
· Getting reliable information and intelligence: Especially in the early stages of a global pandemic, it is difficult to understand and align all parties around real facts and intelligence. Companies often partly relied on media reports. Having reliable data and intelligence is especially important for global companies, whose many local perceptions of the crisis may be very different.
· Velocity of the crisis: Several companies had not planned adequately for the rapid velocity with which the crisis escalated around the world. Companies found that some of the plans they had in place simply took too long to implement and were constantly being overtaken by events.
· Understanding the whole ecosystem: Some businesses found that their plans did not sufficiently consider the impact of the crisis on the suppliers and partners in their ecosystems, which then hit their own operations. This is of growing significance as companies’ operating models increasingly adopt an ecosystem-based approach.
· Coping with uncertainty: Companies traditionally feel comfortable if they can reduce or eliminate uncertainties, but in the COVID-19 crisis this is impossible. Companies have therefore found that agility and flexibility are critical, more so than they had anticipated in their plans.
In the future, it is clear that organizations will have to assess risk and have the ability to deal with crises that are far less predictable than what organizations currently plan for—months and sometimes years ahead. The report concludes with areas where firms can improve:
· More dynamic risk management approach: Risk management needs to be more dynamic in seeing and responding to signals across both internal operations and external supply chains to ensure the business is fully prepared for the threat. Digital tools are a key part of the solution to this.
· Stress-testing of business continuity plans: Those companies that have stress-tested their plans using relevant scenarios, such as pandemic outbreaks, have been able to respond much more effectively. Companies need to ensure that plans are regularly stress-tested to ensure they are fit for purpose in line with their existing operating models. As these models and associated key processes change, so should the plans.
· Better understanding of “risk velocity”: Many companies were caught off guard by the speed at which the pandemic risk impacted organizations. A better understanding of this dimension of risk, supported by a digital approach, would ensure that an organization could become more agile and dynamic in future crises.
· Workforce and supply chain as key risk factors: The crisis has highlighted supply-chain disruption and maintaining an effective, fit-for-purpose workforce as major risk factors.
Many of the leaders involved in the report expected they would need to diversify the supply chain diversification and include options closer to operations to avoid relying on lengthy and complex supply chains.
The full report is here: https://www.adlittle.com/en/