Business in the time of Coronavirus
What to do when your manufacturer abroad is forced to halt operations • Who to turn to for assistance in finding alternative buyers and sources of production • And why panic and hysteria make the worst advisers in the present climate • Three experts in ec
The Crisis as a Ladder of Opportunity
“In these challenging times, with customers surrounded by uncertainty and unsure of the proper course of action, my advice – whether you are a company with five employees or 500 – is to see this as an opportunity to do things you have not done previously, with looking ahead to the future. The first priority must be to tackle the short-term challenges and risks: How do we stem the tide? For example, is our company able to cope with a full transition to remote working? How can I provide support for my clients if my call center is forced to shut down? This primary phase must also include giving thought to short- and long-term cost-cutting measures.
“The second priority is the ladder of opportunity. In every crisis, there are those who can gain from it, so why not you? If you have previously made plans to work smarter, to apply new methods that you never got around to testing – this is the time and this is the reason to pick yourselves up and give it a shot.
“If you are able to provide services via delivery instead of in-store purchases, go for it. This will also send a message to employees that the company is taking the crisis seriously and not remaining complacent.
“The third priority is the day after. Analysis of organizational behavior in times of crisis reveals that one of the key factors is what happens once the crisis is over. If we assume that the coronavirus threat will pass sooner or later, every organization will face a challenging transition back to full productivity. These are not processes that can be completed in the course of a single day.
Take the example of an airline that has laid off pilots and flight attendants and cut its scheduled flights, and the significant challenges it faces in returning to a full schedule. Whatever the circumstances, there is an opportunity to restore your business to its previous glory, and even to expand it. Why take a backward step? Think of it as an organizational opportunity.”
The writer is the CEO of einsof, a strategic consulting firm
Stick to the Plan
“A global health crisis can quickly spiral into an economic crisis – and we have already seen evidence of contagion among global markets, with sharp plunges in reaction to the spread of the coronavirus. It appears that governments and banks have already internalized the scale of the crisis, and an attempt is underway to minimize the extent of the impact to the economy via tax breaks and lowering interest rates. On the other hand, there is still no answer at present to the burning questions, such as “how long will the crisis last, and what will be the extent of the damage?” Without that information, every investor is left to consider how to move forward in the present climate.
“There are two things we can say with a high degree of confidence: Firstly, as with any crisis, the coronavirus epidemic will pass sooner or later; and secondly, any attempt to time the stock market is destined to fail – we will never know the ideal moment to buy or sell. Therefore, in order to make an informed decision, any investor must ask themselves several key questions: Would a sharp drop in the value of my portfolio be a significant blow, endangering plans? What is my investment range and what is the purpose of the money? And will I have need of that money within the foreseeable future? Once you are able to answer these questions, you can be confident that your decisions will come from the head and not the gut. Moments such as these present significant opportunities for the long-term investor with an appetite for risk. Risk-averse investors, on the other hand, who are unable to process large-scale losses, will take the decision to minimize their exposure to the market.
“At the end of the day, life will return to its regular course, the world will keep turning, and all that once was will be again – people will keep consuming, building and producing, and even traveling abroad. Panic and hysteria make for terrible advisers. Every investor should stick to a plan and decide whether they are willing to gradually increase their holdings in shares that have dropped in value, or whether to minimize the risk to the bare minimum and hold onto their cash. Liquidity comes at a cost, which is obviously the inability to enjoy the fruits of the correction that may occur over the next year or two.”
The writer is the research director in the Bank Hapoalim dealing room
Don’t Rush to Seek Alternatives
“Like so many others, we at DHL woke up one morning in January to a world with corona. Our company, with its 330 planes and 100,000 employees, immediately grasped the outsized role that we would have as a logistics provider in supporting our customers in 120 countries, extracting people and businesses from the crisis. The logistics market has taken a severe blow to its cargo transportation capacity in recent days, and any delivery company that holds no planes of its own is struggling.
“Whenever I get a call from a concerned customer saying, for example, that the Chinese factory that manufactures goods for them has been shut down, the first thing I say to them is not to rush to seek external alternatives, but rather to find alternatives within the existing arrangement. The Chinese factory isn’t operational? Speak with them and you’ll be amazed to see how much they can help. Maybe they’ve switched to working from home? Or maybe they have existing stocks of the product you need stored in another country? Any solution that retains your positive relationship with the existing supplier is preferable – and we will know how to provide the logistical support for it. You can be sure that the Chinese manufacturer will be very grateful for your loyalty in such turbulent times.
“It’s different in situations where you have no choice but to seek alternatives. Through our close ties with the Israel Export Institute and the Ministry of Economy, we know that they have amassed extensive knowledge regarding potential alternative buyers or sources of production around the world. If you are textile producers who are currently unable to import from China, call either the institute or the ministry, they will tell you where you may be able to find the type of textiles you import – whether in India, Turkey or elsewhere. Over the last month, we have connected several of our clients to these organizations, with immediate results. At the same time, undertake a reassessment of your entire supply chain, and if you need to make any time-limited adjustments to your logistics arrangements, this is the time to do it.
The writer is the marketing and sales director of DHL Express Israel