Preparation for recovery

Dear Members,

We are about to send out our latest update newsletter. So I thought it might be useful to provide some thinking about preparing to come out the other side of the current virus, and some scenario planning.

Starting with an established model, McKinseys in the States are saying this See Below.

In terms of scenario planning, the second worst case scenario is that the virus mutates as it did in 1918. The fundamental difference between now and 1918 is air travel. If it transpires that there are multiple strains circling the world, and we have to vaccinate against them one at a time, then we will forever be playing catchup and social distancing will be here to stay.

At that point we will need to review how we do business. We will have more of a think about that in the coming days. In the interim this checklist from McKinseys is a good place to start.

Understanding something intellectually is not the same as solving the problem

People do not get exponential growth.  “Crisis case studies are replete with managers who chose not to escalate, creating worse scanarios for their organisations”

We found this model helpful Scroll down to see the simulator, then imagine millions of cases with multiple viruses.

https://www.washingtonpost.com/graphics/2020/world/corona-simulator/

Employee safety is paramount but mechanisms are inneffective

Employee safety means stopping contact. Moving forwards it will mean minimising contact. The Asymptomatic nature of the virus, means that you cannot tell when people are infectious. I fact your whole company could have it before you even know. Look at the UK Government Cabinet. We are lucky more did not get it.

What does that mean for your business? I think this has the potential to run for a while. The County Council are talking about some form of seperation till 2020.

The best article I have seen on managing this is by Nobel Laureate Paul Romer

https://www.welhatchamber.co.uk/paul-romer-provides-solutions-to-corona-delivering-lives-and-jobs/

Optimism about the return of demand is dangerous

Organisations that are closer to edge, tend to be more optimistic about the recovery. It may be that by divesting now, you will get a better price than when the recession bites in a few months time.

If you are thinking of selling all or part of your business, now is the time act.

https://www.welhatchamber.co.uk/thinking-of-selling-your-business/

Assumptions across the Enterprise are misaligned

Give broad guidelines and local managers interpret how they should be implemented. Think in terms of WHY? We need to achieve this output because. Let your local managers, think through WHAT and HOW, then present proposals, learn, identify best practice, Check, share, then let them implement.

https://www.welhatchamber.co.uk/thrive-and-survive-in-business/

The short term is essential for survival, but don’t lose sight of the long term which might be worse

Managers are working long hours to keep the boat afloat. BUT far too few are thinking longer term. See above for ideas.

What if there is a recession, Credit dries up despite the stimuli? etc

I would start to think of your business in terms of cash generating units. What are the resources necessary to keep that income coming in? How will you protect the core of your business? Is now a good time to take some restructuring advice? At least to understand what your options are.

I actually think that would be the smartest move. In the short term contact Alan Clark

https://www.welhatchamber.co.uk/product/8-0-why-carter-clark/.

We will look to produce a video on this in the coming days.

Stay Safe

 

Nick

  1. Rob Morgan
    | Reply

    Thanks Nick
    Really interesting article. I’ve been giving this quite a lot of thought around the attitudinal attributes that business leaders and their people will need to display to navigate their way successfully through not only the current restrictions but the ‘new normal’ that will begin to emerge on the other side once those restrictions are lifted. In the vast majority of businesses, in my humble opinion, things will look a lot different on the other side of this.

    I’m starting to do some research with clients and Linkedin Connections and would welcome input from other Chamber members, obviously fully respecting their confidentiality.

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