Business Risk Officer, Capricorn Group
We always want things to go back to normal quickly, but what most of us have probably not realised yet is that some things will never be the same again.
To stop the coronavirus, we radically changed almost everything we do: how we work, exercise, socialise, shop, manage our health, educate our kids and take care of family members. For weeks now. We are all practising a new thing called “Social Distancing”, and it is here to stay for much longer as the whole world is talking about another concept called “flatten the curve”. How long would that take, and how extreme do social restrictions need to be? We simply “Do not know.”
Social distancing is not just about avoiding people, researchers at Imperial College London defined it as: “All households reduce contact outside the household, school or workplace by 75%.” That doesn’t mean you get to go out with your friends once a week instead of four times. It means everyone does everything they can to minimise social contact, reducing the number of contacts by 75%.
The decisions governments took over the past few weeks shaped the world for many years to come. These were hugely damaging to businesses that rely on people coming together in large numbers: restaurants, cafes, bars, gyms, hotels, theatres, cinemas, shopping malls, music shows, sporting events, airlines, public transportation, schools etc. These organisations, large and small, are in survival mode, of which, lesson one is that now is not the time to price for an increase in the bottom-line, but to price for survival.
Many of the short-term emergency measures we are now forcing into practice, will become a fixture of life after COVID 19. Global emergencies always accelerate historical processes and decisions which, in normal times, could take months of deliberation, but are now passed in a matter of hours.
If we continue to make decisions in the good times at the same speed, we did in the past few weeks; we will see the bottom-line jump after this time of survival. We surely should forget about five-year plans as we now have proof and experience of effectively running businesses on weekly plans, the right people, with the correct information and decision-making; driving execution at the speed of light. We now also know that we only need to track two things, Money and Risk.
Money is why we take risks, and the essence of any business is to take a risk to gain reward. So, we must watch the money – bad cash flow kills companies, and so does greed. Find that balance between risk and reward and always remember that you can only take more risk as you get better at the management of risk. Thus, more money is a result of better risk management, nothing else. Those who still see risk management as preventing things from going wrong will differ with me here; those who understand that risk management is about the management of risk and opportunity will understand and agree. It is not about getting everything green, the better you get at the management of risk, the redder there should be. “If everything seems under control, you’re just not going fast enough.” – Mario Andretti
Secondly, you must watch risk, both the levels of risk internally and externally, as well as emerging risks, including those that do not presently exist. This presents two big pitfalls – trying to identify all the risks and focusing more effort on the internal ones rather than what is outside of the business. You can never identify all the risks you are exposed to, so the ability to assess risk and make the best decision in response to that situation of risk is the most important skill. So many executive teams struggle through pages and pages of risk reporting on what is internal to the business and focus all the risk management efforts on controlling everything internal to the business. In contrast, the ones from outside are the ones that are most likely to put you out of business.
We also learned that the key to survival is how people in your organisation respond to a situation of risk. Building an effective Risk Culture and teaching all employees Risk Management Skills are much more important than having “tested” Business Continuity plans. No disaster will follow your Business Continuity Plan, and most do not even cover Pandemic Outbreaks.
Communication takes the top spot in the lessons learned!
- Bad news travels much faster than good news
- Only those needed for decisions were involved, these emergency gatherings carried no passengers
- Most meetings can be e-mails
- We do not have to all be in the same room to make the best decision; we can even be in different countries
The final permanent game-changer is that we are paying way too much for office space; most people can work remotely with the right tools and some discipline.
The world of work will never be the same, the world of business, for those who survive; will never be the same.
COVID 19 did not “Rock the Boat”; it is rocking the planet. #LockDown, #StaySafe and #KeepYourDistance #TheFutureIsHere