06 Apr 2020 20:24 IST

Keeping the lights on when a crisis strikes

‘Never normal’ is going to be the new normal, and companies need new levels of preparation henceforth

The best laid plans of men and mice

Gang aft a gley (often go awry)

And leave us nought but grief and pain…

Scottish poet Robert Burns, 1786

Most companies have business continuity plans (BCPs) to ensure that operations carry on even during emergency situations. Typically BCPs are for three months and, even during natural calamities or severe economic recessions, a lot of companies manage to pay salaries and keep the lights on. But Covid19 has thrown even the well laid BCPs out of kilter.

Caught on wrong foot

A survey in the US last month by payment automation solutions provider AvidXchange of 500 different businesses showed that just over 60 per cent of them had businesses continuity plans, of which only 37 per cent had the necessary technology to enable employees to carry out mission-critical processes such as taking care of customers, or paying staff.

And while many companies do have a documented set of procedures, and identify key personnel who would carry out these steps, these can often fail if not regularly updated when those people leave.

We have just seen how, in the context of Covid-19, companies in India were caught on the wrong foot and scrambled helter-skelter to put technologies in place to enable staff to work from home, and keep them safe or find alternative supply chains as existing ones were disrupted. For those in essential service businesses — healthcare and pharma companies, retail and e-commerce companies supplying groceries, logistics players, banks, and financial services companies — keeping employees working in the field safe has been another contingency to plan and manage. Who would have anticipated the shortage of protective gear?

Agile and on the cloud

On the positive side, in week two of the lockdown, many companies impressed with their remarkable agility and adaptability to keep operations going smoothly. It’s early days yet but I would hazard a guess that if an analysis were done of the companies that got their acts together quickly, they would be the ones that had digitally transformed as well as those with decentralised leadership. Software company Zoho, for instance, in just three days had all its 8,000 employees across 20 countries make the transition to working from home. It could do so quickly as its entire application suite was on the cloud. Zoho’s BCP team relayed information and delegated responsibilities. How it did it is, here.

Good communicators

For continuity management, communication is crucial. Several CEOs did virtual townhalls, kept their lines open, took on tough questions. A crisis is a time for over-communication, and to allay fears. And if hard times are inevitable, it is important to be upfront and transparent about it, as Marriott’s President and CEO Arne Sorenson was in his moving address to all the associates of the group.

The grim reality of the current crisis is that businesses big and small are going to have to take tough decisions about their workforce. A survey by the Society for Human Resources Management (SHRM) in the US, released in the first week of April, found that one in five small businesses cannot afford to pay employees for more than a week under quarantine. The SHRM research showed that while 80 per cent of these companies did come up with business continuity plans in early March, a quarter of American workers said they had not heard from their managements on how they were handling the Covid-19 crisis.

Behaviour shifts

Covid-19 is going to cause huge behaviour shifts in society. Already #CatalysedByCovid has become a trending hashtag, with forecasts that people will henceforth start becoming more responsive to digital tools, start consuming healthier, become very conscious of hygiene and equip homes for every possible emergency. There are forecasts that people might start saving more as jobs become insecure, and postpone, or altogether discard, frivolous buys. Fear is going to be an emotion driving the consumer henceforth.

All these new behaviours have implications for businesses. Whole business models will change as consumer behaviours change. Till now businesses and leaders were thinking in terms of a VUCA (volatile, unpredictable, complex and ambiguous) world. But now, as somebody said, ‘never normal’ is going to be the new normal. And that’s what the continuity plans have to focus on.