Vinita Bali is a former managing director of Britannia Industries. Currently, she is a non-executive director on the global boards of Smith & Nephew plc, Cognizant and Bunge. In India, she is a non-executive director on the boards of CRISIL Ltd and Syngene International and is on the Board of Governors of IIM-B. In this interview, she talks about the impact of covid-19 on businesses, upturning of business models and how corporates have responded to this deep crisis. Excerpts:

You say the sudden corona pandemic exemplifies the VUCA term?

We were already in an economic slowdown and when the virus hit us nobody really understood the magnitude of its impact. In many ways, VUCA defines all that the Covid-19 has done. There are known problems and known solutions that can be dealt with in a linear fashion; then there are unknown problems to which solutions exist somewhere and even those we can solve. This was an unknown problem with an unknown solution, so far. Decision-making was really challenged as managers are used to making decisions with variables they are aware of and understand. The financial crisis of 2008 was big but wasn’t unknown, as the world had seen financial crises earlier. But this pandemic is impacting everything — from health infrastructure to jobs and the economy, how we live and work and how we travel, and it is impacting the entire value chain.

Many businesses have been upturned; how do you see the business scenario evolving?

For the first time, we are seeing the complexity of having to work through both a demand and supply-side issue, simultaneously. So many parts of the supply chain have been disrupted. Demand has to be stimulated. But only if people have money in their pockets, if they feel good about spending money, and if there’s certainty in their lives, will they be inclined to spend. So, where is the consumption going to come from, apart from essentials? Another significant factor in India is that almost 85 per cent of the workforce is self-employed and have no savings to fall back on and their entire earnings potential has disappeared. What we needed was immediate cash infusion to meet the minimum and basic requirements of hundreds of millions whose livelihoods vanished overnight; when it was time to put money in the hands of people to reassure them we didn’t do it — the stimulus packages came much later.

There's a lot of debate that work from home is going to upturn business models of many companies?

I personally think this whole WFH panacea is somewhat simplistic and exaggerated. Most people don’t live in large houses where they can have “office space” inside the house. The whole ritual of going to work, socialising with colleagues at work, has its own energy. Companies should explore models of dispersed and smaller offices, so the commute is reduced and I’m talking about companies which employ huge numbers.

Several factors converge between home and work — social, economic, sociological, psychological — and one cannot assume that WFH will be the answer to everything. It is also a bit naïve to conclude that WFH works and will be a great way to promote gender diversity, but that is a peripheral understanding of issues. Maybe women don't want to work from home — we should get and understand their perspective, rather than concluding that it works. Right now everybody is making it work because there is no other option. Also, work is not about completing a task — it is about interactions, face-to-face to meetings with customers, vendors and colleagues, shooting the breeze with new ideas and concepts and making them work. Staring at a screen all day by yourself cannot be the new norm and I am convinced that we will do better than that!

Have companies gone beyond their CSR mandate in this pandemic? Should they have done more?

My hypothesis is that every company has done more than what it was doing, and as always, there are exceptions — the outliers who have done the right thing, irrespective of whether it was part of their CSR mandate. One board I am associated with gave 10,000 meals a day, for over two months, to daily workers who were simply abandoned by their employers. However, what has been remarkable is the work of individuals and NGOs, (some with corporate support). The sad fact is that Covid-19 has pushed us further back on the hunger and nutrition spectrum, even though zero hunger by 2025 is the first SDG.

But corporates have a social responsibility beyond CSR at a time like this — do they lay off people, reduce salaries, defer bonus for last year, to conserve cash? How do you improve working capital without delaying payments to small vendors, use your credit lines effectively? My view is that in the long life of well-run companies, 2020 will end up with poor/inadequate financial performance, but could be a positive year in other ways — high on reflection and learning how to operate better, how to prioritise, how to think holistically and comprehensively about business and its impact on society and the environment. This is the time for authentic and conscientious leadership and the winners will clearly differentiate themselves from the pack.

What would you say are the implications for boards during this Covid crisis?

Effective boards have supported management to make the right and tough business calls, not compromise on the culture and values of the organisation, scan the horizon for inorganic opportunities, use cash well and strategically, and keep the morale up. Good boards have not taken their eyes off strategy and the long term while supporting management with operational decisions, as required.

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