Dubai, United Arab Emirates, (AETOSWire): The COVID-19 crisis has caused a systemic shock to the global economy. There is even talk of a ‘Pre-COVID-19’ and ‘Post-COVID-19’ world.
ACCA’s global research Covid-19 global survey: inside business, impacts and responses data looks at the impact of COVID-19 so far on organisations and the global business community and it’s clear from the findings that this is only the start of the story. Over the coming weeks and months different regions of the world, countries, businesses and organisations in all sectors will seek to navigate a way through the crisis, using different strategies and interventions to respond to the crisis in what will be a continuously and fast-changing situation. ACCA’s report provides advice for organisations in how to respond based on the ‘3As’.
Act and respond in a sustainable manner
- Think ‘people first’. Pay attention to the physical and mental health of employees and develop appropriate plans for the resumption of work. Put in place a communications plan that will engage and update employees regularly and human resources policies that address crisis measures.
- Accept the short-term focus and demonstrate true leadership. Timelines and targets will need to be refocused on near and mid-term horizons. Senior leaders in organisations need to accept a change of focus from strategic to tactical.
- Recognise the needs of your customers and other stakeholders. Make sure you do not miss the opportunity to respond to those changing needs. Understand the impact on your supply chains, and wider relationships with stakeholders and partners.
- Use a crisis-management team with communications skills and establish a resilience plan. Oversee major issues, formulate business contingency plans, coordinate and align implementation across different departments, and ensure speedy responses and decision-making. Initiate resilience planning to ensure activities across the organisation are connected in response to an event and broader business integrity is protected.
Analyse the different information sources to secure your organisation
- Model scenarios and plan for resumption. In a crisis such as COVID-19, organisational scenarios are not constant and require regular review. It is important to understand how using analytical capabilities to assess both external and internal data can put the organisation in a stronger position and help it understand the operational and financial impact of different scenarios that may arise. Information insight is also critically important for business resumption planning, which aims to get the organisation back up and running properly, planned in manageable phases. This requires analysis of the resources and assets that the organisation needs to safeguard in order to be able to resume.
- Review government and fiscal policies that may be of benefit. Monitor the relief measures and policies introduced by the government and seek to use the benefits fully. Take a lead role and communicate the needs of your industry (leveraging on data insights) to relevant government agencies for appropriate policy formulation, refinement or implementation.
- Remember: ‘Liquidity is the lifeblood’. Organisations should review their lines of credit and renegotiate their debt financing obligations. Payment periods, for example, may well be extended in the immediate term as businesses recover. Strong focus on cash management and liquidity should be in place to bridge different business scenarios, accepting that recovery to full liquidity is likely to be a long process.
Anticipate the business impacts and future trends
- Look for opportunities to innovate. Organisations should consider opportunities for short or medium-term innovation. This could involve product and service development or thinking innovatively about partnerships. It could mean ensuring that employees have new opportunities for producing innovative ideas or looking again at how the organisation is deploying digital and technological innovations.
- Review company strategies. Re-examine business models. Explore new channels to market, supply-chain diversification, new approaches to customer services, and opportunities to grow.
- Don’t forget: fundamental business risks remain. Don’t lose sight of the fundamentals. Even in the face of COVID-19, the organisation will still face not only existing risks (e.g. cybersecurity), but also different ways of working, and strategic reactions to COVID-19 could change these risks or introduce new ones.
ACCA’s global research with over 10,000 finance professionals identifies a wide range of financial challenges facing organisations of all sizes and across all sectors.
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