Many people consider Covid-19 to be a temporary nuisance that will pass in no time. They are wrong. The pandemic will be with us for quite some time – two years according to some estimates. As a result, nations are now focusing on how to adapt to life with and not without the virus.
What this means is that the ‘laying low’ strategy will not work for businesses. The disruption that is being done will be ‘long term’. Supply and logistics chains will continue to suffer. The travel and tourism industry will remain uncertain. Many in the leisure and entertainment industry will be laid off. Oil demand – having recovered from a below-zero value – will remain in the doldrums. Healthcare practitioners will continue to wonder what is happening to their normal clients.
For small businesses, numbering about 2m in Tanzania, the situation can be more troublesome. Given that only 10% of SMEs survive the first two years in a normal business environment, and given that the vast majority of SMEs in Tanzania are characterized as small and very small, when Covid-19 is thrown into the mix their survival chances can become slim indeed. So, unless one is in the few businesses that are being buoyed by the pandemic, e.g. selling masks and sanitizers, you have to determine how to proactively manage this tumultuous environment.
The smartest thing at this point is to accept this reality and seek to adapt one’s business accordingly. The market is a dynamic reality, and this is the new normal. What we know is that the possibility of multiple waves of Covid-19 is quite high so one should not expect the market to bounce back immediately, the so-called V-curve response. This is going to be a drawn-out war that is going to affect how people live dramatically, so we may not know how the market is going to pan out.
Secondly, organizations have to be reinforced to survive uncertainties. We know what types of organizations tend to survive. These are companies that are ‘built to last’ if I am to borrow that terminology from the authors of ‘Built to Last: Successful Habits of Visionary Companies’. While many companies are started simply to make some quick bucks, the ‘Built to Last’ thesis of founding visionary companies – that is one that will be successful through multiple generations – is pertinent for times such as these. Short-termism will condemn the organization anyway.
Thirdly, managing mercenaries out. One of the biggest liabilities that an organization can have is to have mercenaries at the top at a time such as this. Mercenaries, even though they are paid generously enough per month to sustain them for a year, they will never risk their incomes even once. Their whole focus is on squeezing the last dime from the company before they jump ship just before it sinks. An organization needs leaders who identify with its future to survive times of crisis.
A couple of years ago a construction company that was fighting for survival hired two executives from the UK to turn it around at an exorbitant cost. Those executives took no time to buy themselves expensive vehicles, install a golf course, and allocate huge payments for themselves whereas even low paid employees were not being paid. The company went under.
Fourthly, an organization needs to uncover the internal weaknesses in its operations and correct them immediately. This is the time for proper due diligence in one’s decisions.
A while ago I received an email from a CEO of a group of companies in need of consulting services. The group – over a dozen companies – did not have a strong recognizable brand but it was immensely powerful in some circles. After I had helped the CEO manage some projects, he asked me to survey his yard operations. I found that the yard had about 80 trucks parked in different states of disrepair. Many things were amiss: a truck had vanished a year before (so they doubled on security); a crane was broken (so they had paid more money for leasing a crane than was needed to buy at least two cranes); there was no computerized system (so cost could not be tracked); and – above everything – millions of dollars in revenues were being lost since the yard’s efficiency was very low! Worse still, managers could not be held responsible – they were related to the CEO! This operation has not survived either.
Business catastrophes usually punish wastefulness. And most cash-rich organizations are usually quite profligate. They pay for anything because they can. Their systems are usually laden with internal contradictions, and when catastrophes hit those organizations collapse like sandcastles. One is reminded of Enron here.
The fact is that Covid-19 will be a graveyard for many businesses around the world. But some will take this as a cue to forensically examine their operations and may even emerge from this crisis stronger. It is all dependent on how managers react to these new realities.
The author is a Management and Technology Consultant based in Dar es salaam. He holds an MSc degree (with distinction) in Telecoms and Internet Systems (UK), in addition to over a decade of experience in management and leadership. For comments and/or inquiries email: email@example.com or call: 0786070740.