Building Resilient Business

By Karan Gupta | 6 min read

What's in the page

Covid-19 Impact

The COVID-19 pandemic is the defining global health crisis of  our time and the greatest global humanitarian challenge  the world has faced since World War II. Beside Challenge  of health it has brought huge economic crisis and has  impact across industry refer Fig 1. We are noticing across  globe people working from home, disruption of supply  chain except for essential, labour disruption at factories,  restriction on market to sell product other than  essential through shops, closure of mall or market places  other than online. Governments across Globe have taken  certain decision like lockdown and financial survival  incentive which has to certain extent restricted spread of  Virus and possibly could enable economy to survive. However, the adversity can be changed to opportunity only if Companies build resilience and adapt to change. They need to respond  to it and turn adversity as New normal and to its advantage.

Risk that need to be addressed and turned from Adversity to opportunity:

Human Resources

1.Employee health and  safety

2.White collar unavailabilty  in ouice

3.Blue collar in Factory

Demands

1.Market disrupted

2.Reduction in purchasing  capactity

3.Market sentiment and  change in choice  prefrence.

4.Online subsittute

Supply

1.Raw material sipply  disrupted

2.Trading platform  restriction

3.Restriction in Movement  and supply chain impact.

4.Compliance to new  morms in good movement

5.Impact on inventory in  habd

6.Machinery maintaneace  and cost of restrating

7.Energy and fuel availabilty

Distribution channel

1. Distribution and storage  availability

2. Distributor contracting

3. Movement to and fro ,  from distribution channel.

4. Availabilty of Machinery  for storage

5. Port restrictions

Fund and Liquidity

1. Investor sentiment and  withdrawal from market

2. Challenge in servicing  existing debt

3. Working capital liquidity

4. Fixed cost servicing

5. Impact on Investor and  brand confidence

6. Regulatory compliance 

Technology

1. Absence of connected  technology

2. Dependence on manual work and lack of automation and dashboard

3. Bandwidth issue

4. Risk of system, data and  process confidentiality, availability, integrity and  privacy.

5. Cyber breaches and fraud

6. Cyber and cloud security 

What needs to be done : Adopt to Risk management approach to manage this and be resilient

There are various best practice framework which can be referred for  guidance, however none will be suflcient in itself. Considering  the unique and combined impact we have seen on Mankind  and Economy. Framework like COSO ERM, ISO31000, ISO  22301 etc., can be referred but each industry and company will have to customize and create and work with unique  approach fit to them considering risk and response will be  unique to them. They need to Recognize their unique culture  and capabilities, apply their own practices, integrate  response with strategy-setting and its execution and manage  risk to strategy and business objectives.

COSO approach of Objective Setting and Event Identification,  Risk Assessment, Risk Response and accordingly defining  process response and Control Activities. Information & Communication and monitoring need to be addressed in unique way. Long  term lesson drawing and adding to this a layer of adoption, innovation  and  change  management  will  be  much  required. Complete rethinking and brainstorming to be more agile and responsive in entire  process is need of the hour. Organizations need to Link to creating, preserving, and realizing value in better and sustainable way . Many a times short term views  need to be given to preserve long term suitability.

 

How we can help

Here are few Short term and long-term suggestion Short term:

  • Organization board and key managerial professional including head of depart-  ment should get together to use collective intelligence and brainstorm and  prepare short term plan with long term vision.
  • Bottom up channel should be open, inclusive culture need to be built, as human  have huge potential and no possible suggestion should be unheard considering  together every one is fighting toward virus auecting wellbeing of health and  wealth.
  • Extended enterprise covering customer, Supplier, investor, and regulator all need  to be involved in redefining approach by survey, AS-IS analysis, Contract discus-  sion and collaboration approach and also ways of meeting and serving together  as all are connected.
  • Digital journey and automation should be adopted, the exercise should be led by  key managerial professional and business process owner and not only IT. Short  term immediate solution need to be brainstorm and implemented.
  • Reviewing of existing govt. support and relaxation across globe
  • Contract and compliance management discussion and renegotiation if required
  • ERM program and IT, Cyber and BCP program need to be revisited to update and  respond quickly for quick corrective action.

In short, Trust and Believe in all should be enhanced and program need to be  dealt with emotional intelligence more than logical intelligence.

Long term :

Long term strategy and plan should be devised to build resilience for sustainability.

  • Preparing response to emerging customer need, Explore scope of new market
  • Develop new product and services
  • Developing trust and relationship with Investors, employee, vendor, customer  and regulators
  • Identify new source and changing source of supply chain,
  • Contracting to enhance and manage distribution channel based on learning  gained
  • Research and development
  • Understand and develop delivery skill and market to deliver product and services
  • Digitalization of business, Developing Monitoring mechanism and tool some  digital product like cloud, social media, mobile, analytic, internet, RPA, blockchain,  cloud computing and AI/ML.
  • Cyber control design,
  • Fund and resource management and building of capital by investment improved  investment strategy
  • Building capacity and agile and inclusive infrastructure with lower fixed cost
  • Developing cost executive value chain and forward and backward integration.
  • Focus on Building resilience by inclusiveness approach

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