Much has been written about the magnitude and shock of the Covid-19 pandemic on the business environment, and the causes that have contributed to such an impact.

As with human beings, organisations that are business-fit and have immunity to environmental vagaries are the ones surviving and in some cases, even thriving, in the new normal.

Business-fitness test

The pandemic has accentuated the unforgiving “survival of the fittest” context that will dispassionately decide which businesses will survive in the current environment.

Businesses need to be strong both on the outside and within to survive in the current business climate. It is now or never for most of the businesses to acquire fitness and immunity.

The “outside fitness” is what is perceived by customers: businesses that are trustworthy for their products and services. Such companies will be the go-to brands for customers in these times, as buyers are more likely to gravitate towards companies whose quality, service and price considerations are now more reliable than ever before. For most products and services, orders are far and few in between and they need to be fulfilled swiftly to avoid the risk of customers switching to other brands to meet their requirements in this uncertain environment.

This calls for several enhanced capabilities for an organisation to generate and capture demand wherever and whenever it happens, and then swiftly fulfill the same. On the “outside”, customers need to be provided with several channels of connection with the company and increase the frequency of customer contact to remain relevant, by constantly educating its customers about what the company is doing for them. “Customer is God”, and in these times of need, organisations will do well by keeping in touch with their customers.

On the “inside”, the company’s supply chain needs to be more nimble to function accurately and on time. There is a need and an opportunity to for the organisation to constantly assert itself as the most reliable partner for its customers in the current environment. This may mean spending and investing in the form of inventory and logistics, which requires a historically-sound cash position — a necessary immunity component to weather the current business environment. “Cash is King” they say, and such kingdoms are unlikely to fall, at least for some time to come.

This is a rude wake-up call for all those companies that did not see it wise to conserve cash. Such companies may end up losing customers because their supply chains cannot afford to be sustained. They may also retrench their workforce on affordability grounds, badly damaging employee morale and possibly entering into a rapid swirl of downsizing and eventually winding down the business.

As Peter Drucker said: “the purpose of business is to create and keep a customer.” A company with a strong historical culture of customer centricity, with internal deep pockets filled with cash, will be able to keep its customers.

An example of an organisation that is not just surviving but thriving in the pandemic is Dominos in the US: it posted a 22 per cent overall growth in their March-May 2020 sales despite a significant drop in dine-in customer walk-ins. The National Restaurant Association in the US said “tens of thousands” of locations could close during that time. So, how did Dominos grow? It leveraged its historically well-established customer-centric assets of channels of delivery, take-away and customer database to proactively generate orders. If this trend continues for Dominos in the US, it should not be surprising if they takeover some of their rivals who may be available at a very steep discount.

Role of Leadership

Soundness of leadership in an organisation is another dimension of “internal immunity” that will also be fully tested in this business climate of high uncertainty and ambiguity. An organisation may have the culture of customer centricity and may have deep pockets, but if the leadership’s behaviour, judgment and decisions are misaligned, then the company runs the risk of falling by the way side if the pandemic drags on.

How the leadership responds to the pandemic will either help in retaining customers or forsaking them forever. Leaders are forged in times of crisis.

First, the leadership needs to be hands-on and provide its personal high-touch experience to all the stakeholders: customers, employees and business partners. The ecosystem needs to feel the calm reassurance that the leadership of the organisation is listening to them, using sound analysis and interpretation to drive business decisions. Empathy, decisive actions and honest communication are the need of the hour. As an example, unmindful of its premium apparel brand, Ralph Lauren’s leadership quickly decided to initiate its order-strapped suppliers to manufacture face-masks and gowns for frontline medical personnel, thereby sustaining the ecosystem. It takes a unique kind of leadership to show urgency and humility.

In other examples of swift responses to the rapid change in the environment, large-store grocers have had to quickly shift from in-store services to deliveries. Many such stores missed opportunities when they were unable to efficiently respond to large-scale demand during the lockdown, leading to long wait times and even cancellations for customers — resulting in missed opportunities.

Others have changed their business models temporarily: if Mohammed can’t go to the mountain, the mountain must come to him. Many retailers have tapped into gated communities and large apartment complexes, bringing their stores to the communities — a win-win for both the store and the customer.

Second, such lofty requirements on leadership qualities such as decision-making, speed and soundness of judgment will put unprecedented levels of pressure on some, taking a toll on their physical, emotional and intellectual health. They need to power through to navigate the organisation through troubled waters.

Several global leaders and public figures are also falling sick, resulting in an albeit temporary but unnerving leadership vacuum. Physical health is of primary importance and the leadership team needs to keep that in mind.

Emotional health can be ensured by prioritising the essentials and letting go of the rest objectively. Emotional health of the leaders and the employees can also be reignited by identifying new avenues for growth; for instance, Best Buy (a consumer electronics retailer) at this time began to deploy its technology to help senior citizens live more comfortably. Such decisions call for sound judgment based on sharp intellectual analysis of the business priorities using, at best, limited data, collective experience and the right amount of consultations with stakeholders.

Seizing new opportunities

Also, the pandemic appears to represent opportunities for certain types of businesses, and the ability to seize the opportunity in an economically efficient manner can push such organisations to the next level of growth. Pharma companies, oxygen suppliers, home-care services, manufacturers of medical devices and so on need to rapidly respond to unprecedented demand, but the response needs to be capital efficient keeping the post-pandemic business climate in mind. Needless to say, this tight-rope walk of balancing the present with the future requires good judgment and intellect on the part of the leadership.

As a final thought, there is a high likelihood that several companies may be too late to learn these seemingly basic lessons of customer-centricity, cash-flow management and grooming strong internal leaders. While this can prove disastrous for the laggards, it is also going to be bad for the economy as a whole. Much like the real-life lessons of staying healthy as a collective to ensure individual well-being in the pandemic, the best-practice companies must ensure the ecosystem imbibes its culture and thereby develops its collective fitness and immunity.

The writer is managing partner at CorEssentials

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