Learning from Crisis
The health crisis we are currently experiencing due to the COVID-19 pandemic and the resulting economic and social crises have put us in an unexpected and complex situation. Challenges that we were already examining, such as globalization, technology, the environment, democracies, poverty, inequality, and international institutions, have and will continue to become more glaring and our concerns have become more widespread. The world will not be the same after this.
Companies need to reconceptualize their business models in order to come back from this crisis stronger than before. Those who use this moment to improve will be far more prepared to confront the issues (and opportunities) of the next crisis. Recovering gradually as the COVID-19 crisis diminishes will not be enough. Businesses will need to completely reassess their revenue profile to position themselves for the long term and stay ahead of their competitors.
Companies need to determine what customers, post-coronavirus, will value and develop new tailored experiences based on those insights. Due to disruptions in supply chains, adaptability is crucial, which may mean considering nontraditional partnerships and collaborations. The crisis has quickened the shift to technology, and the best companies are going even further by strengthening and broadening their digital options. To be successful, businesses need to use advanced analytics to combine new sources of data with their own insights to enhance their links to their customers.
Successful companies will act quickly to re-stabilize their global asset base and supplier mix. They will also need to remodel their supply chains and operations to protect against a more acute and wider range of potential surprises. The once-common global sourcing model in product-driven value chains has regularly declined as new technology and consumer demand patterns support regionalization. I expect this trend to be expedited.
Most companies were digitizing their operations before COVID-19, and if they expedite these efforts now, they will more than likely see considerable benefits in production, quality, and end-customer connectivity. In this operation, flexibility could be pricey, but leading innovators have demonstrated how “Industry 4.0” can considerably reduce the cost and increase resilience.
While the coronavirus hastened the pace of existing automation and technology and employees have learned how to accomplish tasks using digital communication and collaboration tools, there will be even more changes in operations, with a decline in repetitive and manual work and a rise in the need for technical and analytical support. This shift will require a considerable investment in workforce engagement and training in new skills.
Over the past few months, there has been a dramatic change in the way we work, travel, interact with loved ones, receive medical care, spend our leisure time, and handle everyday transactions. This transformation has expedited the movement of digital technologies. When reopening after the crisis, business leaders will face radical changes in, for example, consumer behavior and demand patterns. How the economy rebounds will vary from country to country and even from city to city. To successfully handle the recovery, companies must analyze the early signals of the sudden influx of increased consumer demand in real time and adjust quickly in order to bring back services and supply chains.
To deal with these issues, business leaders will need to create an ambitious plan and deliver it promptly— in two or three months as opposed to the usual year or more. For businesses around the globe, leadership, imagination, and execution will be of great importance in navigating life after the coronavirus pandemic.
To reduce the impact of future crises, here are a few recommendations for leaders to keep their performance on track:
1. Evaluate the financial damage.
To create a rebuilding plan, leaders must first determine how much their business has been affected by updating financial statements and comparing them to previous numbers.
2. Revisit your business model.
The business plan that worked great prior to the pandemic may have to be tweaked. You may need to examine how your company can pivot to adapt to a new normal. For example, brick-and-mortar stores may have to look at expanding sales digitally rather than relying on foot traffic.
3. Update your budget to account for new costs.
After the pandemic, you may need to be prepared to invest in growth opportunities. As part of the recovery, businesses must understand what they can cut and what they need to allocate to make the most of the earnings they have coming in. The goal is to eliminate monetary waste and make the operating budget as efficient as possible so that when opportunities arise, businesses can take advantage of them.
4. Establish a timetable for recovery.
It would be beneficial to have a timeline that prioritizes the company’s most important actions. There may be many things you want or need to rebuild, but doing all of it at once may not be feasible.
5. Develop an emergency plan for the next crisis.
While this uncertain time may seem like a one-off event, a crisis can come about at any time. Using what you learned from this experience can help protect your business from future disturbances. COVID-19 has taught us how crucial it is to adjust and keep our businesses flexible so that they can weather storms. Preparing for the worst-case scenario requires outside-the-box thinking. Having backup plans for tough financial times can increase the chances of survival and ensure that your business flourishes again.
How We’ve Adapted
Higher education institutions are facing challenges posed by the rapid move to online learning due to global pandemic. Some parts of the curricula are affected more profoundly than others. York College of Pennsylvania has stepped up to address the challenges presented by the social distancing required to deal with the global pandemic. Our Graham School of Business faculty were able to move from face-to-face to remote teaching in a short time, which is very inspiring. Internships have been handled remotely. Experiential courses have been handled through alternative projects such as online simulations or independent studies. We are now offering synchronous online and HyperFlex classes. HyperFlex classes contain a customized blend of online and in-person classes that require access to the Internet, Canvas, and other learning modules such as MyLab. While HyperFlex classes allow for some in-class instruction, social distancing prohibits the physical sharing of course materials. As such, all faculty members provide online access to course materials and assignments.
Graduate programs in the Graham School of Business offer the ability to switch between in-person and remote attendance. This ensures that any additional constraints on a student’s time due to the pandemic will not derail their educational goals. Our graduate students have the flexibility to participate in their classes on campus or remotely without interrupting their work schedules.
Systemic risk is closely associated with paradigm shifts. Systemic change can alter entire systems, especially business systems, and result in system-wide transformation. However, this pandemic is a systemic shock for businesses around the globe.
This pandemic has altered social systems, economies, and customers’ values, expectations, and behaviors. The future will bring new regulations, business partners will fail, the competition will react, and employee ambitions will change. These forces will clash and substantially change business systems. The changes will be swift and extraordinary, and business strategies will need to adapt.
Even before COVID-19, corporate management was grappling with the speed and scope of technological transformation. While this transformation is inevitable, successful leaders will use their digital operating systems to take advantage of the disruption caused by the pandemic. When a system has faults and weaknesses, forced change can be good. The systemic risk that led to this difficult time can also lead to the beneficial systemic change. We can always do better, and now we must.
Nick Delener is Interim Dean of the Graham School of Business. He most recently served as Interim Dean of the School of Business and Economics at Indiana University East in Richmond, IN. Prior to this position, Delener served as Dean of the School of Global Business at Arcadia University in Glenside, PA. Before Arcadia, he served as Dean of the School of Business at the State University of New York (SUNY) Old Westbury.