Managing in Times of Coronavirus

Apr 15, 2020
WEDNESDAY APRIL 15 2020

In Summary

  • Managers and employees have made it through a disrupted month of March and are facing the rest of the year which may have similar upheavals.
  • They should immediately initiate scenario planning to judge how long and what impact the virus will have on their businesses. They will have to weigh contradictory information but use common sense and compassion.
  • This is not a time to look for windfall opportunities, as everyone is looking for day-to-day oxygen. Managers have to come up with acceptable levels of loss, identify their essential partners and come up with the plans to achieve these results.
  • Most important is that managers must make firm decisions, as indecision is even worse in times of crisis. They must then explain these decisions truthfully, and marshal employees and partners to follow
By BANKELELE
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This past week I was privileged to listen to experts in the legal, financial, and academic fields exchange ideas on managing companies during unprecedented wave of changes brought about by the Covid-19 pandemic. 

The different virtual sessions were arranged by the East Africa Private Equity & Venture Capital Association, Thunderbird School of Global Management, the American Chamber of Commerce in Kenya, and the law firm of Oraro & Company.

Managers and employees have made it through a disrupted month of March and are facing the rest of 2020 that may have similar upheavals. Africa is considered to be in the early stages of the pandemic, and while it is believed the worst is still ahead, its government and company leaders can learn from examples in other countries.

Re-opened China provides a glimpse of a different world after Covid-19, one in which consumers are more hygiene-conscious, socialise less, shop online, work remotely and travel less. In China, industries have resumed and congestion is back, but urban transit, store sales, flights and hotel bookings are still half of what they previously were. And while it is fodder for conspiracy theorists, immunisation certificates and medical codes on our phones may govern how much travelling people will do in future.  

What can managers do? Forecasting is useless as situations change rapidly. Also, none of the business continuity plans in place foresaw such extended shutdowns, closures of schools, and travel restrictions. Managers should immediately initiate scenario planning to judge how long and what impact the virus will have on their businesses. They will have to weigh contradictory information but use common sense and compassion. 

Companies are obligated to provide safe work environments for employees, with masks and gloves, ample spacing, shift hours, and allowing employees to work remotely. Working from home brings unique challenges such as distractions and loneliness, and managers need to communicate to staff working remotely that they are still essential.

This is not a time to look for windfall opportunities, as everyone is looking for day-to-day oxygen. Managers have to come up with acceptable levels of loss, identify their essential partners and come up with the plans to achieve these results.

INNOVATE

Managers should allow partners, suppliers and employees to innovate. One good thing about a crisis is that it makes people think differently and, in the past few months, governments and regulators have shown flexibility and adopted technology such as to allow companies to make online filings, and judges have delivered court rulings online.

With supply chains disrupted and no revenue coming in, some businesses may not be able to fulfill their obligations. But ‘force majeure’ clauses are not common in Kenya, and managers cannot just invoke them prematurely to get out of contracts. Managers considering this option will have to show, in court, that they took steps to mitigate the losses of their counter-parties.

Ideally, managers should negotiate and engage with their banks, suppliers and landlords and other partners as situations change. They should also consult their lawyers as they contemplate major decisions in response to the pandemic.

If difficult conditions persist, and companies want to declare insolvency, directors should know that they are not to do business or trade while in insolvency, That status offers a temporary moratorium from creditors and managers should use this time to get creditors to convert debt into equity and also consider entering into merger deals.

Finally, managers may turn to the sensitive area of controlling human resource costs. They can send employees on annual leave and may also consider sending others on unpaid leave, but only with the consent of the employees. Most employees will cooperate in redundancy exercises if their employers are open in communication, follow all the legal steps, are seen to be fair, and promptly pay employees their dues.

Most important is that managers must make firm decisions, as indecision is even worse in times of crisis. They must then explain these decisions truthfully, and marshal employees and partners to follow.

Twitter: @bankelele    

https://www.nation.co.ke/oped/blogs/dot9/bankelele/Expert-advice-on-managing-times-of-coronavirus/2274454-5524820-12ykasbz/index.html


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