COVID-19 effects on economies

Published: 14 May 2020 - 2:22 p.m.

Before the unprecedented outbreak of COVID-19, countries as well as businesses were used to study how the various disruptions have been changing lives and the world. Thus, they used to plan and try to mitigate the effects of disruptions. Some try to be the disruptors so they can be in the leadership position with competitive advantages.

While all that has been going on, COVID-19 took everyone one by big surprise. It outbroke and disrupted everything in a very short period, in less than three months and continues. It has brought the whole world; people, governments, and businesses; to a complete standstill of normal life.

The current outbreak of COVID-19 has affected all major parts of the businesses. Governments and businesses are encountered by an unprecedented crisis combined with uncertainty of how long it will last and how deep the impact could reach. Most countries and businesses are in a very enigmatic situation on how to plan and what to do to minimise the effects and be ready for the future.

This article aims to provide some tools that should help governments and businesses as well as individuals to respond and act now, before it is too late when the post-COVID-19 era comes. It focuses on practical solutions and ways of handling the current overwhelming crisis and uncertainty situation. They are tools to be used and applied to overcome the challenges transpired out of this unprecedented global crisis.

Pro Act and Fast:

First tool to be applied by people, government, and businesses is to be more proactive and as early as possible after cunning analysis and thinking but not to be inundated with so much analysis or thinking. At a crisis as such we have, it is imperative to act fast to mitigate the losses or worse conditions that could emerge. What happens is that many get busy with analysing and thinking of how and why crisis happened and give less time for action to what could be done fast. As Voltaire said: “Perfect is the Enemy of Good.” Having a good service or product in a short period is more valuable than having a perfect service or product after a long period. The market simply would not be waiting for them.

Governments and businesses should get accustomed with the new normal way of working. Efforts and sources should be exerted towards the new normal. The current and future normal will be highly dependent on technology and digital solutions. So, act fast to provide online services and products is the key to survival and growth. Focus on easy to use online platforms, browsing showroom, ordering system, delivery & tracking system, and after sale services follow up mechanism.

Quickly Let Go:

We tend to hang on to the old and comfort zone life fantasy. We normally fear to confront the new reality, so we keep thinking of the good times, or at least of the better than now times.

The normal advice given the failing businesses or ideas is: Fail Fast, and Go On. When a disruptive crisis occurs, governments, businesses and even individuals need to let it go, and move forward to new opportunities and solutions. Focus on the current and future. Don’t waste energy or resources. Use them wisely and quickly.

For this point, governments and organisations need to be smart and act like the mice in “Who Moved My Cheese?” Don’t be fully attached with good past resources or keep dreaming that they “must come back.” The mentality would focus on the following: The life must be in a “comfort zone”, and oil prices are not always low. The “Cheese” moves and in many times vanishes (actually it happens over time, but many times we don’t observe or don’t want to observe) by consumption with no replenishment plans and processes.

Organisations need to have very forward thinking and positive action-oriented culture that encourage innovative and active teams. Peter Drucker said it very well: “Culture eats strategy for breakfast”. Failing to fail-fast or fail to do new things or work with new ideas and ways would always lead to a worse situation. On the contrary, it will consume all your efforts, time and resources. The faster you fail and let go, the faster you learn and grab new opportunities and the faster you stand up and grow.

Life Cycle:

In business, we study the product life cycle. We understand and believe that whatever the product is. Go through the normal life cycle stages (Launch, Growth, Maturity, and Decline or Revive again). Yes, some part of the life cycle could be very short and some could be very long. It all depends on managing strategies and continuous improvement. However, nothing is safe from the inevitable down-turn of the product life cycle. This does not only apply to products in businesses, but also to governments’ performance. It is also very vivid when studying the strengths and the weaknesses of civilizations. Nothing would last forever.

Thus, the current crisis and uncertainty should encourage the governments and businesses to evaluate their products and services in addition to the strategies and priorities based on the stages of the product’s life cycle. They need continuously to revive and reintroduce current products or create new ones. The name of the game is to stay in the growth and the maturity stages.

Embrace Change:

Take the crisis and uncertainty opportunity to embrace the new way of life and doing business. Consider it as the great opportunity you always wished for. This is life; and you tend to get some hardships occasionally. Of course, some could be very severe such as the one COVID-19 has created while others are less traumatising. Smart organisations are always ready for the change as it is the only constant factor in life. Be ready to accept the new reality quickly after the change occurs due to the new conditions imposed by COVID-19. Plan new strategies, processes, and provide the products that create new value and help to sustain the crisis period and prepare the organisation for growth. New way of working and creating value to be adopted as fast as possible. Businesses that cannot operate as usual due to the crisis would need to change their business model, create a new value chain, and reposition their most valuable assets, their employees.

Planning should be based on the worst scenarios; that lock-down and business closure could last longer than expected. Embrace the change and create your own new opportunities.

The Future:

The universe has set its own law of cause-effect; your future is molded by your actions. Accordingly, what actions and decisions taken today will shape how tomorrow would look like. Edward Deming rightly said: “Your system is perfectly designed to give you the results you are getting.” So, if you are not happy with the results, then the first thing you must do is change your current system and workflow.

Organisations and governments ought to start thinking on how to operate and create value while the situation is under complete or partial lock-down. More and fast actions need to be taken and implemented with the future in mind, all relating to the economy and survival under crisis and uncertainty conditions. This means the governments and businesses need to think and plan the important things that need to be available in the medium and long terms that have great effects on competitiveness of each country and company.

Check List:
  • What is the percentage of forward actions compared to meetings, analysis and thinking?
  • Do you have future thinking teams that are working on new opportunities?
  • Do you believe in letting go of the past and the sinking costs?
  • How many new products and services were created during the past two months?
  • Are you providing your services and products online? If yes, is your online services user-friendly? Do you have an easy delivery and tracking system?
  • Do you believe in change as a normal life fact, and you are not immune from it?
  • Are you waiting for things to get better?
  • To act, are you waiting for someone to make your conditions better?

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