This article was first published in Entrepreneur Middle East.
The world is adjusting to the new reality that has suddenly confronted us. As teams around the world embrace the latest technologies to communicate, now is the time for leaders to formulate and mobilize their strategies to ride the wave of change. In situations such as a global pandemic, the cogs of pre-COVID-19 innovation simply move too slowly, and leaders should be seeking out speed, precision, and foresight to get them through.
Anticipation and planning
Charles Darwin had a one-size-fits-all answer to the threat we face today- adapt and thrive, or stay still and die. If you are fortunate enough to be a food retailer or pharmacy, the COVID-19 pandemic may not pose the same threat as it does to so many other industries. However, other sectors will certainly need to tackle the situation with an air of creativity, as project-based businesses are feeling the repercussions of supply chain shortages and delays, while SMEs, startups, and agencies are facing liquidity issues.
The most pessimistic medical science anticipates the world is facing a six-month crisis, provided we don't make any economic blunders to prolong the situation. This means that while it is tempting to sit back and wait for the storm to pass, all businesses must produce a realistic survival strategy for the next six months. Auditing current contracts and timelines to identify where it may become difficult or impossible to carry out contractual obligations or meet deadlines is key to mapping out the short- and long-term future.
From an operational standpoint, it is also worth keeping in mind the light at the end of the tunnel may be pent-up demand. Therefore, now is the perfect opportunity to review procedural efficiencies to ensure your business emerges from these unprecedented times a robust, well-oiled machine.
Communicate and negotiate
Opening the lines of honest communication with stakeholders, customers, suppliers, and employees, both internally and externally, is crucial. Inflated optimism will fail to impress customers, but any business that can project a calm and realistic understanding of its customers' issues, while acknowledging the ones they themselves are experiencing, will quickly establish loyalty.
When engaging with suppliers regarding contractual obligations, the best line of defense is mutual cooperation. Discuss the issues you have identified as being potential roadblocks in the coming months with the other party. This will then place you both in a position to enter into negotiations to either amend the contract in light of the current situation, or mutually agree to terminate the agreement, bringing the contract to an end.
Regardless of the desired outcome, transparency will be the virtue that could save you from future litigation.
Is your insurance policy enough?
If they are not already doing so, businesses should start carefully reviewing various forms of cover they may already have, such as business interruption. If this is something you are not protected by, serious questions must be posed to the broker as to why not.
Those in the hospitality, travel, and leisure industries may have customers who are looking to make a claim. In this circumstance, businesses should be working with their insurers to offer clients an upgraded holiday next year, with the difference being paid by the insurer.
Understanding your legal rights
Google indicates that force majeure is one of the most common searched French expressions right now, with coronavirus at the top of the rankings. The internet is littered with articles considering the implications of the COVID-19 pandemic as a potential force majeure event. The truth is the language of the contract a business has in place, which may or may not encompass a pandemic, will largely depend on how the force majeure clause can protect them. If an organization had the foresight to have its contracts drafted by a lawyer, there is a high possibility a contract can be terminated, or the business can, at the very least, avoid paying damages as a result of delay or non-performance.
While it is entirely proper business consider force majeure, they should also look to other less well-known options. These include mandatory legal requirements under many of the Middle East’s legal systems, which permit courts to vary and mitigate contractual obligations in light of unforeseen hardships, as well as material adverse change clauses in contracts.
Triangulate and network
Whether we like it or not, the stark lesson the COVID-19 pandemic is teaching us is we are all connected and dependent on one another in ways we might prefer not to be. We are being forced to think constructively about how we are interdependent on our customers, suppliers, and stakeholders. We are coming to realize the solutions we present during these unprecedented times should serve us all equally.
It is likely the majority of businesses are taking away two rather contradictory lessons from the experience of remote working, ranging from, “Do we need that expensive office space at all?” to “I never realized how much I missed my colleagues.” What we are discovering is that our truth lies somewhere in between.
Unlike in 2008, we are fortunate enough to have a relatively capitalized banking industry. Unless our banks support us, our suppliers, and our customers, they will begin to face familiar issues, and states are simply not willing bail the banks out again. Therefore, we all need each other to succeed, which we will, provided we tackle the situation with a degree of cleverness.
If the coming months are approached with intelligence and caution, it is not inevitable that business will face commercial ruin. Instead, we will merely be entering into an unforeseen period of hibernation. The magic of economics is circulation, but stasis is death (and not necessarily just in the long run, as John Maynard Keynes would have us believe). While we weather this short-term bump in the road, we have found some give and take is needed, and people are realizing other businesses need you as much as you need them– some just need to be shown the importance and connection.
Whatever challenges you and your business are facing, you are not alone. The old adage “a problem shared is a problem halved” is a wise one. Look around you– there will be those that are suffering more than you, but we can be uplifted through helping our colleagues and industry, while allowing them to help us.