Oliver Wyman, the American global management consulting firm, is monitoring the COVID-19 events in real-time, and have published a study about the possible long-haul effects of COVID-19 on the economy. The paper emphasizes that crisis-management won’t be enough in the long run, but strategic plans and decisions are needed to define companies new realities.
To open up economies again, Wyman says, countries and businesses must be prepared for the long haul of suppression. In their study, the company has analyzed the impact of moving to aggressive containment on the case curve – early measures resulted in a flatter curve with a lower peak. They have also examined the various phases of COVID-19: Phase 1 (where we are now), Phase 2 (transitioning to this is not as easy as it looks), and Phase 3 (which will be a major step forward depending on breakthroughs). And, Wyman’s researchers consider what truths about regional shutdowns, mental health, permanent culture changes, and the economy to adopt now, and why more business leaders must accept the shift from crisis management to agile strategic planning.
According to the study, we are at Phase 1 at the moment: rapid transmission of the virus, no vaccine, and limited treatment options. Phase 2 would be the time when the number of new cases would decrease during a 14-day-long period. According to the paper, this phase might be reached by early June in the USA.
“The risks differ substantially by geography based on local factors such as health system capacity (beds, respirators, personal protective equipment, and clinical staff), population demographics and density, and cultural norms. The very fact that these decisions will be made locally,( yet, we live in an interconnected national and global economy), is one challenge we must face ” – the research emphasizes.
As neither policymakers nor businesses want to risk the increase of the spread again, Wyman’s researchers say it is likely that some of the restrictions will stay in force for a longer period. Some kind of social distancing, especially for the vulnerable is more than likely to stay in place for a while. Also, those, who can work from home, might prepare for continuing remote work for some time.
This means, that the customer behaviour won’t change to the post-pandemic pattern all of a sudden. Home-delivery is going to be the most important way of shopping for a considerable amount of time.
“Business operations are likely to see radical changes, particularly those enterprises that rely on in-person services. Those businesses will need to adhere to strict requirements for social distancing and monitoring of employees. This means that stores, restaurants, and malls will operate with social distancing requirements and maximum capacity limits well below current fire codes. Manufacturers will need to implement spacing and protective gear for workers. Service professionals such as hairdressers, dry cleaners, repair services, painters, and others will need to wear protective equipment like masks and maintain disinfection standards.” – can be read in the study.
According to Wyman, the major step forward to the transition to Phase 3 depends on medical breakthroughs. Phase 3 is going to the period when vaccination and treatment are going to be on hand. The researchers predict that the earliest vaccine can be commercially available is the spring of 2021.
What all of this means is that businesses should gear up to operate differently during the long haul of suppression. They need to plan for a more sustained period of disruption than many were considering a few weeks ago, and the temporary crisis management-oriented approaches deployed in Phase 1 won’t get us through this effectively.
Crisis-management is not enough
As crisis-management only works for the short run, business managers should be able to use strategic planning. This means developing multiple scenarios for the short, medium, and long terms; making decisions based on relevance under multiple planning scenarios; reframing the company’s mindset to acting with purpose vs. reacting.
Employees and customers won’t tolerate week-by-week work-from-home decisions, increased delivery delays, service reductions, and shutdowns of whole locations for much longer. Therefore, businesses should develop explicit plans to get back to work responsibly and adapt solutions for work from home to be sustainable in the long run.
“ Whatever happens, it’s clear that the easy ride of the past decade is over. The next few years will show which enterprises are truly durable, as they lead through the long haul of suppression” – concludes Wyman the paper.
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