“Although most of us are still in the depths of the crisis and there is much uncertainty, we know that at some point it will end.” Those were the words of Ignacio Garcia Alves, chairman and CEO, Arthur D. Little, in the introductory letter of the recent report published by the company and to highlight how businesses are handling the situation today in light of the COVID-19 pandemic. Telecom Review asked all about what the report entails in an exclusive interview.
In order to help the world overcome this crisis through its own scope of expertise, Arthur D. Little spoke to 25 CEOs and business leaders to share knowledge and insight on the measures taken in the context of emergency strategies elaborated to mitigate the impact of COVID-19.
The report, ‘Leading businesses through the COVID-19 crisis’, focuses on critical infrastructure sectors, such as telecoms, utilities and transport, and in countries/regions furthest into the crisis, such as Hong Kong, Italy and Singapore. Five main key points were discussed during the virtual meetings held to draft the report: crisis steering, employees and customers, operational and business continuity, other stakeholders, and recovery and regrowth.
The report showed a significant difference between the response in Asia and in Europe. In fact, the former had learned a lot from previous experiences, notably with the SARS outbreak in 2002 and already had plans prepared for such situations.
Employee safety was on top of all CEOs’ priorities and business continuity came second to that. This is where IT departments played and are still playing an important role to ensure communication between all colleagues.
“All the business leaders emphasized the importance of positivity, in terms of both maintaining morale and ensuring the best – and fastest – recovery possible following the crisis. This does not mean false optimism and denying realities, but rather, acknowledging that although the crisis may not be over quickly, it will not last forever,” the report states. All leaders have expressed the need to put in place a recovery plan that outlines the new opportunities that they can leverage in the post-COVID-19 period. Companies across all sectors will need to strengthen their risk management and business continuity efforts to be better prepared in the future.
In the interview with Garcia Alves, we were able to shed light on the most important outcomes and on the fruitful efforts deployed by leading CEOs to ensure a positive environment to be able to overcome this crisis in the best way possible.
Garcia Alves pointed out the common steps that CEOs took as part of their adaptation strategies and identified the measures that they should take to achieve a successful recovery. He also spoke about the lessons that the telecoms sector has learnt and the opportunities that will come out of this crisis.
Following the publication of your recent report, ‘Leading businesses through the COVID-19 crisis’, what are the major outcomes that you can outline?
The report has been very well received. What companies and leaders have found especially helpful is the frank personal testimony from CEOs about what worked and what didn’t during the initial crisis response. For example, many found that their crisis management plans were simply too slow and rigid. They found it challenging to make quick decisions with incomplete and rapidly changing information. Some realized that their plans did not cover their partner and supplier ecosystems adequately. And they realized very quickly that initially, the only thing that actually matters is staff and customer safety – and that company interests are secondary now. All the leaders we spoke to instinctively put care for fellow humans above all else.
After the discussions with 25 CEOs, can you tell us more about the common pillars in the strategies they elaborated to counter this crisis efficiently?
It was striking that there was high commonality in the main pillars of the response, which included:
- Be decisive, but share the burden with your team and delegate as much authority as you can
- Move fast, assume the worst and be comprehensive (not step-by-step), and secure employee safety first and operational continuity next
- Be prepared to spend most of your time on communications, focus on positivity and morale, and listen as well as talk
- Create physically separate A and B teams for critical operations, actively support suppliers and ecosystem partners, and be innovative with cash management
- Collaborate closely and openly with government, authorities, unions and local communities
- Be realistic, but start planning for recovery now and use separate teams to work on recovery while the crisis is still in full swing.
The other thing in common was the realization that from now on they needed to adopt a much more dynamic and agile business resilience approach.
Are those strategies actually bearing fruit? Or was execution harder than it was expected in theory?
For our CEOs, most of whom were in critical infrastructure industries such as telecoms, transport and utilities, these strategies have worked well so far. But bear in mind that the strategies they shared with us were based on what actually happened; they were not necessarily what was written down in their plans – on the contrary. So yes, execution was a lot harder than expected in theory.
In your opinion, how important was it for the CEOs to quickly adapt to the situation?
Being quick and agile was absolutely key for the CEOs. There is no point in having a crisis response plan with processes and an organization that are too slow to match the speed at which the crisis moves. This is why our CEOs highlighted delegation as being vital. You can’t be fast and agile enough with a top-down, command-and-control approach.
Recovery should be the most important part of any strategy now. What steps should CEOs take to fully and positively recover?
The post COVID-19 world will be very different. There will be a deep recession initially, and for most companies the key challenge is yet to come. However, there are always opportunities as well as challenges, and there is huge benefit in taking a fresh approach to work out the best path for recovery and regrowth.
The crisis is likely to drive penetration of many new technologies, new approaches to supply chain strategy, new customer behaviors, and a different role for government and regulators where we can expect a higher degree of intervention.
The key for companies going forward in this uncertain environment is to adopt a scenario-based approach to strategic planning – prepare for a number of alternative futures, know how to position for each one and have some fallback positions as “insurance”. Leaders, above all, need to be prepared to reinvent their businesses, consider new roles in the value chain, and work out how to be more flexible and agile. Innovation-based growth is one of the areas where Arthur D. Little is strongest.
What are the lessons learnt, especially in the telecoms and ICT industry?
For telecoms and ICT, there are, despite the terrible consequences of the virus, ultimately new opportunities which are emerging from the huge push the crisis has given to acceptance of virtual interactions and digital technologies. There are some key lessons also about how to build better business resilience approaches.
The classic corporate risk management systems, based largely on backward-looking data and rigid risk registers, will not be adequate for the future. The high degree of global interconnectedness we now have also implies greater fragility and higher likelihood of escalation of threats such as pandemics and cyberterrorism. ICT has a role in putting in place much more dynamic “sense and respond” business resilience systems, leveraging the power of new data analytics and AI/ML technologies that can provide early warning of emerging risks, as well as provide the right aggregation and interpretation for fast decision-making. We are currently already helping many clients with this.
