Do you have FAITH in your business during the Covid 19 pandamic?
During the current Covid 19 pandemic, most, if not all the companies are in their uncharted business environment. The acid test will validate their business strategy, continuity plan and robustness of their supply chain. For most, it reveals the level of dependency on the suppliers and the deficiency of the supply chain strategy.
The success and failure of businesses are critical across the board. It is important for businesses to help and support each other to overcome the challenges brought about by the economic recession and to come out of the recession stronger. We are stronger together. Inevitably, some businesses will not have that chance.
Faith Analysis
FAITH Analysis was created in 2018, during my post-graduate research, under The University of Auckland, for the subject of ‘Developing Resilience, Adaptability and Transformability in the Fourth Industrial Revolution and Era of Artificial Intelligence’. It was used to evaluate small countries like; Denmark, Finland, Ireland, New Zealand, Norway and Singapore on their challenges of developing resilience, adaptability and transformability in the Fourth Industrial Revolution and era of Artificial Intelligence. I felt that it can be used for businesses on their challenges of developing resilience, adaptability and transformability during the current Covid-19 pandemic.
Future-proof Strategies
Strategic business planning. In a competitive and dynamic business environment, businesses need to implement strategic business planning and validate it quarterly, if not half-yearly. The more accurately a business understands their risks, the higher the chance of them being able to derive a proactive contingency plan against that risk. Unfortunately, many businesses underestimated the risks associated with a pandemic, like the current Covid-19. Wimbledon (UK tennis tournament) is one of the few organisations that has pandemic insurance.
Robust and validated business continuity plans are crucial. Many businesses did not go beyond their business continuity plan, after it had been drafted, approved and filed. It needs to be validated with all the what-if scenarios as well as the causes and effects analysed, for each respective response action plan.
Speedy weighted decision-making and action plan or response plan. Speed is not only applicable to a business response plan; it is also proven for pandemics like Covid-19. China has overcome a speedy outbreak with a speedy response plan. Taiwan appears to have acted swiftly and decisively on the Covid-19 response plan. If the rest of the world had learned from China and had implemented controlled, supervised isolation speedily, we may be experiencing a different result today. New Zealand, similar to Taiwan, due to its location (Island nation without road or bridge access from other countries) will be the ideal country to implement a speedy response plan.
However, the New Zealand government was complacent during the initial stage, telling the public that New Zealand has a low risk, even after the first case had landed in New Zealand in February 2020. Therefore, there was no stringent and controlled supervised isolation or quarantine plan in place for all arrivals from overseas. If a proactive, stringent and controlled supervised isolation or quarantine plan had been implemented back in February 2020 for all arrivals from overseas, New Zealand would most likely not need to implement a reactive control plan to have a lockdown at the expense of many businesses and the need to borrow the extra billions of dollars for the economic rescue package. Whether the New Zealand government had underestimated the risk is debatable. The New Zealand government should go against the norm and invest in infrastructure development like building airport runways, port facilities for cruise ships and roads in anticipation for an economic upturn and recovery in future. Currently, they should take advantage of lower costs of building, lower volume of road and air traffic, thereby boosting the economy.
Workforce Strategic Planning. The organisations must periodically and continuously review their workforce strategies to upskill, cross-skill and re-skill their workforce. During this pandemic, it has been demonstrated that companies that have upskilled, cross-skilled and re-skilled their workforce are in better position than those who did not. They are more successful and effective in redeploying their employees into small team ‘work bubbles’. Less effort is also required for the redeployment and reorganisation into the ‘work bubbles.’
Humans and machines will be more connected than ever before in the Fourth Industrial Revolution and the era of Artificial Intelligence Agility and adaptability. The pandemic has only helped to speed up the process. One of the greatest promises of the Fourth Industrial Revolution is to potentially improve the quality of life for the world's population and raise income levels. However, the current priority is to save lives and find a cure for Covid-19.
Develop resilience in life. It is important to help oneself, family and your workforce to development resilience. It is a stressful situation for many. The well-being of people, physically and psychologically, is important to overcome this pandemic.
VUCA is an acronym that stands for volatility, uncertainty, complexity and ambiguity. The term VUCA originated from the United States Army War College to describe conditions resulting from the Cold War. The VUCA concept has since been adopted throughout businesses and organizations in many industries and sectors to guide leadership and strategy planning. An awareness of the forces represented in the VUCA model and strategies to mitigate the harm they might cause are integral to crisis management and disaster recovery planning. The organisations must recognise that it is important to be agile in order to be able respond to ambiguity, whereby the relationships between causes and effects are completely unclear. We must be aware that the sustainable competitive advantage is an organisation’s ability to learn faster than their competitors.
The businesses should not shift their focus away from continuous improvement like the 8 S’s of lean; Sort, Set In Order, Shine, Standardize, Sustain, Spirit, Safety & Self-awareness/Reflection as well as 9 Wastes of lean; Defects, Waiting, Extra Processing, Overproduction, Motion, Inventory, Transport, Utilized Resources and Untapped Potential.
Agility and Adaptability
Not only are agility and adaptability critical to meet the challenges of the Industrial Revolution 4.0, it is also demonstrated that they are critical to meet the challenge of the current pandemic. Governments and businesses need to be agile and adaptable so that we operate differently to ensure human safety is the priority as well as to accommodate the new business environment. Our lifestyle, schools and our work practices have changed to accommodate the current situation. Working and having classes at home have become the new norm. The leaders must be able to lead self before they are able to lead others. Therefore, on a personal level, they must work on and improve their cognitive and relational skills to enhance their adaptability capability.
According to Steven A. Boylan, Kenneth A. Turner (2017); “Individual leader adaptability is an essential step in creating organizational adaptability, but individual adaptability is not enough to guarantee organizational adaptability. It is not enough for leaders to be individually adaptive. Individual adaptability does not automatically transfer to organizational adaptability. Adaptability is a multidimensional construct that encompasses a range of cognitive skills and behaviors that leaders develop in themselves and inculcate in their organizations through education, training, and experience. Organizational adaptability requires purposeful action on the part of the leader to instill an adaptive mindset in the organization. The complexity of organizations provides an inherent capacity for adaptability.”
Therefore, developing leadership or appointing the right leadership within the organisation is just the beginning. Developing organizations capable of adapting requires active leadership that fosters a culture that values collective adaptability. A top-down and bottom-up approach are necessary for an organisation to develop resilience, agility and adaptability capability.
I have seen highly adaptable businesses switching from their core businesses to higher demand businesses (PPE, hand sanitizer & home deliveries etc.), an opportunity created by the pandemic. This is very encouraging.
Investment in innovation, R&D and technology progressively
According to the World Economic Forum Handbook on the Fourth Industrial Revolution (forthcoming, 2017), there are 12 key emerging technologies. Scientists and engineers have leveraged on some the technologies to create cure, vaccines and compute the probability and severity of the impact from the pandemic in many aspects: health, economic and social.
Similarly, businesses with successful innovation and R&D outcome will have the capability to implement them selectively in responding to the challenges of the pandemic. It appears that businesses that are at the frontier of the innovation will have a higher success rate of coming out more successful from the current economic recession caused by the pandemic.
From my research paper in 2018, the findings from the respondents from Denmark and Singapore have scored themselves highly in investment in innovation, R&D and technology. These are in line with the actual monetary spending per capita. The respondents from New Zealand had scored themselves lowest with regards to investment in innovation, R&D and technology. This was also the same with regards to investment in innovation, R&D and technology. It suggests that New Zealand has the lowest percentage of high-tech companies as compared to the other countries in the research. According to Stats NZ, total R&D as a proportion of gross domestic product increased to 1.3 percent in 2016, up from 1.2 percent in 2014. The OECD average is 2.4 percent. Business investment in R&D, however, was 0.6 percent of GDP, up from 0.5 percent in 2014.
Therefore, it is of huge concern that many companies in New Zealand may not survive the current economic crisis and pandemic.
Technological Advantage
It has shown that laboratories which are more advanced not only could produce Covid-19 vaccines faster but at a higher success rate. Similar businesses with technological advantage will have a leading advantage over their competitors.
My research paper also found that the respondents from Finland rated their businesses very highly for having the technological advantage to create new value, products and services. Their top 5 exports are: machinery including computers, paper and paper items, electrical machinery and equipment, mineral fuels including oil and vehicles. We can understand why they are investing more in innovation, R&D and technology progressively to generate high-value products.
The respondents from New Zealand had rated their businesses very low for having the technological advantage to create new value, products and services. Their main exports are: dairy, eggs, honey, meat, wood, fruits, nuts, beverages, spirits and vinegar. These do not require huge investment in innovation, R&D and technology. This is concerning as it appears that many businesses in New Zealand are not ready to meet the challenges of the pandemic.
Harnessing the benefits and advantages
Bottomline: we need to effectively harness the benefits and advantages of technology and artificial intelligence collaboration. The concerning findings from my research paper shows that majority of the respondents from both New Zealand and Norway believe that they do not have the ability to harness the advantages and benefits of technology and artificial intelligence collaboration.
The businesses must also be able to harness the benefits from their continuous improvement program.
The current acid test will validate the business’ strengths, weaknesses, opportunities and threats. How a business comes out of this pandemic will depend on its future-proof strategy, timely response plan, action plan and contingency plan as well as its ability to harness and leverage from its competitive advantages.