‘Plan for the worst-case scenario to make it as good as possible,’ was one of Ray Dalio’s (founder of Bridgewater Associates) most recent #PrincipleofTheDay. It may not be quite what he meant, but it made me think about the companies that are making the best of a bad situation – not only understanding the risks posed by the pandemic, but successfully adapting to them.
I used to talk about escaping the geopolitical ‘doom loop’; I think it equally important to consciously consider and make salient the COVID-19-fuelled ‘good news stories’. Where are companies banding together with government to support the health response, for the benefit of society and their employees? If the pandemic is an existential challenge for many small to medium-sized enterprises, how are they doing things differently to ensure their survival? Have corporates identified new solutions for COVID-19 challenges?
Here are just a couple of examples from around the world, to hopefully inspire creative thinking:
For now: from products to protection
Companies from a range of industries have turned their physical and human capital towards support for the COVID-19 health response. This has included:
- Sourcing critical components using their extensive supply chains;
- Repurposing equipment (like car manufacturers printing parts, or fashion houses manufacturing protective masks) and infrastructure (with hotels repurposed into hospitals);
- Designing new products (in previously unimaginable timeframes - Dyson designed a new ventilator in 10 days in partnership with The Technology Partnership); and
- Even waiving fees on mobile money products to minimize the physical exchange of currency.
While the underlying motives may vary, in most cases there has been a degree of ‘social investment’ by the company: Dyson’s owner paid for an additional 5,000 masks; and fashion brands are donating PPE equipment for example. For the smaller outfits, that ‘social investment’ might simply be a case of ensuring cost coverage and continued employment for a large proportion of your workforce.
So think differently: what does your community need most and how can you contribute? What do you need or who would you need to partner with to make this happen? My favorite so far: an Italian 3D printing start-up converted a Decathlon snorkelling mask into an emergency mask for hospital ventilators.
For the next year: the COVID-19 displaced
Other initiatives are looking to minimize the economic and social fall-out, both now and in the longer-term. Some new initiatives include:
- An Australian tech start-up is looking to create an online exchange platform to redeploy skilled and front-line labour; and
- Backed by the World Economic Forum, the Global Shapers Rome Hub launched a platform to sell restaurant coupons – in effect, paying for a future meal today.
Others are increasing access to existing services:
- Multiple tech companies are allowing free access or trials to their video conferencing capabilities to enable schools, hospitals and businesses to keep operating virtually; and
- Telecommunications companies have lifted data caps to help ensure vulnerable people can stay connected.
This does not just have societal benefit. The reputational (trust) value in such actions can be significant, and there is the possible longer-term commercial value from capturing changing consumer behaviour at the outset.
For the future: the ‘S’ in ESG
In the long-term, COVID-19 has the potential to exacerbate technological displacement, as companies’ strategic responses to COVID-19 turn to automation and AI. You may think you have the political coverage to do so in the current environment (and may have to, out of necessity), but keep an eye on the ‘S’ of ESG – when the economics play out for the worse, potential reputational backlash for workforce decisions will be heightened. Change the conversation from ‘is it legal?’ to ‘is it right?’.
The best of a worst case
Hopefully that has provided some food for thought on how business can make the best of this crisis, but also importantly, some nice stories to help keep us positive in such challenging times.
As for what that worst case scenario could be, we are working with our alliance partner Eurasia Group to help you understand the scenarios (worst case, but also the likely, credible alternative, unlikely) your business might face in your most important markets. Contact us for more information.