Industry Response to Corona Virus

Over time the world had become connected wider, deeper and in cases like China, almost embryonic. Every board room resonated with the words – global, exports, low cost, outsourcing, and rarely would you find a board room that encouraged suggestions that seemed inward looking

This was not true for advanced economies like USA, Europe but equally for economies like China, India, Vietnam, Australia. If you did not talk of imports, you talked of low cost and that meant exports. Rich or poor, developed or developing every country and its board rooms reverberated with the desire to join the global club and create the global village.

This had a huge perceived benefit. It spread risk so wide and thin that everybody was confident of weathering any storm that may come because storms hit only some places. Any tragedy was an opportunity because in every event there was someone standing outside looking in. Even the 2008 subprime crisis however much called global, still left many untouched.

2020 changed all that. In a few sweeping days the #CoronaVirus ravaged the world brutally as it shut down every city from Los Angeles to New York, Paris to London, Mumbai to Melbourne. Iconic cities that teemed with people 24x7, where cities did not sleep, where people were having fun or working while their colleagues, customers and suppliers slept elsewhere. Within days they started looking like ghost towns.

There was nobody standing out looking in, there was no opportunity for anyone, nobody to help pull up another. Everybody was scrambling to save their own lives, businesses, jobs and Darwin's theory was playing out in full.

Every government has been announcing stimulus packages and hope this massive dose of Oxygen will revive the globe and make it hum quickly. But what is being forgotten in this epic event is that the chain is broken at various locations. Fixing any one link does not help. Humanity, Economy and Lives are linked in this chain and every person needs to do their two cents to get this juggernaut moving. This is where I have some issues with how some parts of the chain are reacting.

When there is a classic recession cycle, there is substantial loss of revenue leading to the cycle of lost earnings, lesser demand leading to lesser revenue, but the current situation is strikingly different – there is FEAR. The ability to overcome that is where everybody needs to contribute. And that is where the announcements of job cuts by many companies – the classic reaction to an economic recession – I strongly disagree with because its self-defeating.

To each one of those taking this decision I say – you are making the problem worse, not improving it. By downsizing you are not going to have somebody else who has a job and earning to continue spending. However well off one may be the fear is all pervading and when one sees others lose lives and jobs, they are NOT going to think they are safe. They are not going to go out and spend. The virus can lurk anywhere, infect anybody. What if it infects them or their employer and they die? These are real and present dangers not just some figment of imagination. The crisis is not economic but humanitarian and unless we understand that we cannot solve the problem.

When you lay off people you scare the hell out of others also from spending even if they have money. THAT will hurt the business and economy more than the recession itself. In countries like India where migrant labour form a large proportion of the job market, they have started moving out of cities due to FEAR not because they have lost jobs and have no earnings. Remember they came to the city in the first place because they did not have jobs and earnings.

The chain of TRUST and FAITH is what is getting broken. Once they go back, many may return but not all will. This means that organisations will end up having to spend more, give more facilities, more assurances to continue businesses in future. They would have lost that basic trust and faith because they would have failed other humans in a humanitarian crisis. Owing to this FEAR people will not want to travel, go out to meet people and society as we know it can change unless each one of us try to help bring things to normal.

While it is nobody’s argument that organisations can keep paying staff without a revenue, the more important aspect here is to look at this situation from a humanitarian perspective and not as a business recession/ decision. Some things that employers can do are as follows.

Talk and meet every employee to reassure them that they are not alone

Tell them that with zero revenue, you as the owner or CEO have financial obligations to meet and explain those obligations to the staff. Do not assume they know. Knowing something as general knowledge and knowing something as a figure that affects them are two different things.

Ask them to give you suggestions on what the team can do in this crisis. Remember if you think you have the solution then you are delusional. Nobody has a solution – everybody has ideas and opinions. There are no right decisions but there sure are wrong decisions. Your ability to know this difference will save you in this crisis.

Reduce salaries if needed even by 50%~60% but tell them that they or their family will not go hungry or feel abandoned.

Talk to their families over video and assure them they are not alone. Communication is the KEY in a crisis.

When work resumes, get as many staff as allowed safely to the office. Even if they do not have much work, let them feel they belong, bring them out of the FEAR.

As a leader driving this FEAR out will be your biggest challenge and the rest including business, money etc will happen.

Even if you must take the most unpleasant decision of closing your business – do that in a humanitarian manner. Talk to your employees, explain to them, mingle with them, cry with them, but do not ever think that an email or circular is the right answer.

Ensure that you talk to your suppliers, customers, and other stakeholders why you have to take this decision. Remember you are not committing suicide – you are pulling back from being killed. You will also have to make a new beginning, a new start somewhere else and at that time every one of these people may make a difference to your life. So, do not cut the bridge and walk away, strengthen it, build it and then cross over it.

I would even go to the extent of telling employees that one day in the future when things turn better, the company earns money again they would be paid back every cent they gave up as salary. Just the fact that you think like this will get you loyalty and goodwill beyond anything you can imagine.

In this crisis, knowing that you do not have all the answers is your strength. Ask your team for answers. Somebody may have some idea that can just save your business. Can you use the machine/staff to make masks, PPE, hand held thermometer, something that another organisation that may have business but needs help in some way?

 

During the ongoing crisis, the humanitarian efforts of many including political leaders became an opportunity for companies like Dunzo to deliver aid, food, medicines if required by buying the same for citizens. They were ready to help senior citizens in completing paperwork with banks and others. I had heard of this name, never used them, never thought of using them, but having been exposed to this service will happily use, promote, and support them wherever and whenever I can. On one occasion they walked the extra 11 kms to help a stranded labourer.

Services like Swiggy started delivering groceries and even buying them for people in need.

Whatsapp which till now was the university for forwards became an “Ecommerce” platform. Now a small retail shop leveraging this can mean the difference between success and failure.

Do not be held back by ego, prestige because whatever you do the result is – MONEY. Here is a classic example of a friend to illustrate the attitude I am talking about.

The friend is in the auto components business, zero revenue, large staff, big liabilities. While everybody is calling up customers to ask for help, he has been calling up telling them that the day they open, he will be ready and ensure he starts supplies to them. He convinced a large auto OEM to arrange a webinar for their company where he would talk about technology and future opportunities and more than 55 people attended most of who he did not even know – now they all know him. He told them that he is in deep trouble with no revenue but said who can I ask for help? My customer has no revenue, my supplier has no revenue, so the only option is that we all survive together by staying positive and helping each other at a personal level. Tomorrow when things start coming back to normal – guess who the 55 people will remember first if they want to give business?

This same friend has developed an automatic door opener using the wiper motor used on vehicles which is activated by the temperature of a person which is read by a thermometer fixed at the door. Now nobody needs to monitor employee temperature. Every cabin door can have this. In the morning you were fine, in the afternoon you are feeling fine but your temperature has gone up and when you walk over to your colleague the cabin door refuses to open. No more touching handles, disinfecting them etc.

As I said earlier – this is to demonstrate attitude and carrying everyone along with you in this moment of crisis with timely and effective communication. This is the true mark of leadership and success.