 "What to prioritise? Challenges galore for business leaders post lockdown")
With increasing worry and stress among employees as well as rising loneliness, thanks to prolonged remote working, the organisation's role in sustaining the well-being of employees has become more important than ever. The issue has become more complicated with the kids at home and intersecting with their parents' work day. As employees prepare to return to work when the lockdown is lifted, how are business leaders preparing for the months ahead? What measures are they adopting to keep productivity and morale high while making the most of the dwindling resources?
Mahesh Vyas, chief executive officer of Centre for Monitoring Indian Economy, offers two scenarios. If the lockdown is indeed lifted around April 30, the priority will be to get a firm's operations, including internal processes, cash flow and the supply chain, back on track. The challenge is, while consumer demand had been weakening even before, it has been hit really hard by the lockdown. Maintaining top-line revenues will mean a market share struggle as the pie is not growing.
In the second scenario, says Vyas, if the lockdown goes deep into May, the first priority will be organising finance as most companies have cash to survive only for about a month or two. The next task would be to revive demand and the third, to get the operations back on track and that can be done only if there is demand and finance.
A tightrope walk, to put it mildly.
Vyas says most services sector companies have kept their operations going by enabling employees to work from home. “More than half of CMIE is working from home and we have kept most of our activities running. For us the top three priorities are revival of demand, finance and operations. Being a B2B company, the financial health of our institutional clients has an impact on our financial health,” he says.
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Heading out, large companies in the non-durable consumer goods will have to be aggressive in their growth strategy, while smaller ones will fight for survival, notes Vyas. On the other hand, large companies in heavy industries will help the smaller ancillary companies survive because the industries are more integrated vertically. Sumit Joshi, vice-chairman and managing director (MD) of Signify Innovations India Limited (formerly Philips Lighting India Limited), says efforts to localise production and manufacturing in India to reduce dependence on other countries will gather pace.
Ganesh Natarajan, chairman of 5F World, a platform to nurture start-ups, says that in the manufacturing and retail industry the most important link is the supply chain for raw materials and other shop floor inputs and the demand chain of distributors, dealers and stockists. Business leaders will have to check out the entire chain and replace any part that may have stopped functioning in the lockdown. Disintermediation and enabling supplies to directly reach the factory and also direct dispatch to end customers could be an option to be evaluated.
He adds that the immediate strategy should also be to ensure that business partners are comfortable and costs are managed so that there is no alarming decline in top and bottom lines. “Make sure that cash outflows are minimised while assessing the ability of customers to pay on time. Till there is certainty that the virus has been overcome, leaders should remain on guard to ensure there is no sudden cash crisis. Manufacturing to demand and not just for inventory and sourcing would be a wise strategy to adopt.”
For the hospitality industry, one of the worst affected, the return journey will be a bit different. Smita Jatia, MD of Hardcastle Restaurants (that owns and operates McDonald’s restaurants across South and West India), says all costs, including fixed and variable, will have to be revisited and a new break-even will have to be defined for the new normal. She says it would be safe to assume that consumers will continue to be apprehensive about stepping out for some time and the trend in food will move more towards home deliveries. “Additionally, they will carefully choose places they are confident of, that are safe and hygienic. Given this, one of our focus areas will be doubling down on our customer-first approach.”
She adds there are various consumer sentiment reports that indicate that people are going to be extremely cautious about discretionary spending because of economic uncertainty. “Given this, we will be focusing more on affordability and value for money.”
But consumer demand, finance and operations is 50 per cent of the story. Ensuring physical and mental well-being of employees is the other major concern and would be key to an organisation's survival.
Natarajan says one of the top priorities for business leaders should be to ensure that people stay safely socially-distanced as they get back to a more "normal" working style. “Companies that have taken knee-jerk lay off, furlough or salary reduction decisions will find it difficult to reinstate trust among people,” he says.
That said, as corporations struggle with their cash flows and with keeping their operations going, the fear of job loss and pay-cuts would loom large. Many are trying to keep their staff motivated with measures like e-counselling by specialists and web seminars on topics such as managing uncertainty and change. “This crisis has also underlined the importance of employee engagement and communication. We are also conducting regular virtual coffee corners, wherein leaders engage with team members over a video chat on a variety of issues,” says Joshi of Signify Innovations India.
Observers say smart companies will try to retain their key staff even as new recruitment will halt. Vaibhav Aggarwal, founder and CEO of FabHotels, agrees: “We expect that team additions would stop for some time as the need to conserve cash is paramount.” That said many industries, particularly construction and agriculture, will find it difficult to get labourers to come back to work. Many such workers would have returned to their villages, their safe heavens.
Pradeep Bakshi, MD & CEO of Voltas, has a different take. He believes employees will come back better motivated. “They would have utilised their time to accumulate knowledge digitally, invested in e-learning and training sessions to operate in a new deeply digitally-connected world.”
So will "digital" be the make or break for corporations? Is work from home going to be the new normal?
As Vaibhav Aggarwal, founder and CEO of FabHotels, says, many businesses can't afford to have all workers working remotely so most corporations will try to bring employees back to office in a staggered manner. Zubin Saxena, Radisson Hotel Group’s South Asia MD and vice-president (operations), says when employees do come back it would be payback time for their bosses. “Many of our service staff took additional duties. Ensuring that we do enough to make them feel safe to return to work is an important consideration for us. Regular health screening for employees will be a key responsibility for employers,” he says.