Covid-19: How it will change companies
March 28. Day 4 of India’s 21-day lockdown. There are now around 645,000 Covid-19 cases in the world. Of these, the US alone accounts for a little over 116,000. There have also been almost 30,000 deaths, with Italy accounting for around 10,000. Spain accounts for around 5,800. Two countries in Europe, then, account for over 50% of all Covid-19 deaths. And the US, Italy, and Spain account for around 43% of all cases.
The number of cases in India crossed 1,000 on Saturday night. This shouldn’t be cause for alarm. It was bound to cross 1,000 some point in time. And, as this writer has repeatedly said, it is very likely that community transmission in India started sometime back. It is also almost certain that the enforced lockdown will flatten the curve – one reason why it is important that everyone adheres to it. At 10.30pm on Saturday night, India had 1,013 cases with nearly 44% of them concentrated in Maharashtra, Kerala, and Karnataka.
It’s important to believe that India, and most other countries, will beat the disease – simply because we will (that’s what humans have done through the centuries – beaten the odds). But it’s also important to realise that nothing will be the same again. Not countries (as this column pointed out last Sunday). And not companies. There are five ways in which companies will change.
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One, all companies will now work on proper contingency plans that can last weeks, perhaps even months. Sure, most companies already have them – but these largely remained on paper till they were forcibly put to the test after lockdowns necessitated by the spread of Covid-19 came into effect, at which point they were found wanting.
Two, many companies will automate more (the pandemic will accelerate the adoption of automation technologies across industries). They will also shrink their workforce, in one part because of the post-outbreak economic scenario (bleak), and, in another part because it’s only when people WFH that it becomes clear how much W they actually do (and whether this is critical to the organisation or not). As a corollary, companies will move more aggressively to WFH, and also away from open offices. They will start doing more things, including conferences (perhaps even team-building off-sites online – sorry, that was this writer thinking wistfully). No one is going to be wanting to breathe other people’s exhalations for a long time after this.
Both of these will benefit Big Tech. The future will bring online communication and collaboration tools of a kind we have never visualised before.
Three, companies will review, revise, and sometimes scrap policies, processes, and procedures based on management and manufacturing concepts popularised since the 1970s, and which were pretty much taken for granted. One such, for manufacturing companies, is Kanban, or just-in-time management of inventory. Expect companies to start stocking bigger inventories of parts and raw materials. Expect to see a wave of clustering (getting suppliers to move closer to the factory) and backward integration (where manufacturers start making inputs they need too). Companies are also going to be keen to have their supply-lines in the same country (if not the same county), dealing another blow to globalisation.
Four, and this is related to both one and three, continuity will be the most important thing for companies; not cost, perhaps not even efficiency.
Five, the health care and pharmaceutical sectors will see a boom, a long one, with countries pumping billions of dollars into them. As a corollary, the business of catering to survivalists, a niche till Covid-19 struck, will become large and mainstream. And a host of new businesses will emerge. In the post-Covid-19 world, everyone is a survivalist.