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Business Bullet

COVID-19 WILL CHANGE BUSINESS MANAGEMENT PRACTICES FOREVER 

"Now that every firm in every industry is dealing with survival, it’s time to let those old ways give way to the new at a breakneck pace," writes Art Petty for SmartBrief. The COVID-19 global pandemic will change five business management practices forever: Remote work for knowledge workers will become the norm. Collaboration and innovation practices will become more entrepreneurial. Transparency on risks and finances will be expected. Strengthening decision-making muscles will become a thing. The supervision mentality will be replaced by coaching. Click for article  

Clearly Defined Decision-Making Structure Boosts Performance

Any organization can get decision rights right if its leaders will give the matter enough attention and focus, according to a Deloitte Insights article by Tiffany McDowell and David Mallon. Getting it right, according to the authors, depends largely on a small set of factors. Their research shows that organizations with high organization design maturity: Simplify and clarify decision rights across the organization. Establish strong, transparent accountability for decisions made. Align individuals in decision-making groups to a common mission. Encourage distributed authority. Prioritize the customer voice in decisions. Click for article

How to Seize the EV Fleet Charging Opportunity

Services to support charging electric vehicle (EV) fleets could be worth $15 billion in annual revenues and cost savings. Much of that activity would come from three activities, according to a McKinsey & Co. article by Rob Bland, Wenting Gao, Jesse Noffsinger and Giulia Siccardo: Procuring renewable power directly from the source. Offering energy management services. Providing ancillary grid services. Four elements will need to be in place for companies to capture the opportunities in the EV fleet charging market, according to the authors: Hardware and software integration. Digital, analytics and connectivity. Large base of installed EV chargers. Access to price signals. Click for article

COVID-19: 3 ECONOMIC SCENARIOS 

A McKinsey & Co. report on coronavirus examines three global economic possibilities. A quick recovery, which the authors call "least likely," would include contained intracomplex transmission, with economic impacts limited largely to Q1. The base case is a global slowdown, which would include sustained intracomplex transmission, with a 2020 global slowdown. The pessimistic case would involve a global pandemic and a 2020 recession as transmission jumps and new complexes develop.  Click for report  

COVID-19 Planning Checklist

McKinsey & Co.'s 23-box checklist provides business leaders with specific actions to: Protect Employees  Follow the most conservative guidelines available among leading global and local health authorities (e.g., CDC, WHO).  Communicate with employees frequently and with the right specificity. Support any impacted employees per health guidance.  Benchmark efforts (e.g., certain companies curbing nonessential travel to all countries with community transmission). Stand Up a Cross-Functional COVID-19 Response Team  Designate overall at the C-suite/CEO-1 level. Team should be cross-functional and fully dedicated.  Appoint five workstreams: a) Employees. b) Financial stress-testing and contingency plan. c) Supply chain. d) Marketing and sales. e) Other relevant constituencies.  Define specific, rolling 48-hour, one-week goals for each workstream based on planning scenario.  Ensure a simple but well-managed operating cadence and discipline. Output- and decision-focused. Low tolerance for “meetings for the sake of meetings.”  Deliver minimum viable products: a) Rolling 6-week calendar of milestones. b) One-page plans for each workstream. c) Dashboard of progress and triggers. d) Threat map. Base Goals on Workstreams (vs. employees) Financial Stress-Testing and Contingency Plan  Define scenarios that are tailored to the company, including global slowdown over multiple durations. Identify baseline planning scenario.  Identify variables that will affect revenue and cost. For each scenario, define input numbers for each variable through analytics and expert input.  Model cash flow, P&L, balance sheet in each scenario. Identify input variable triggers that could drive significant liquidity events (including breach of covenants).  Identify trigger-based moves to stabilize organization in each scenario (A/P, A/R optimization; cost reduction; portfolio optimization through divestments, M&A). Customer Care  Protect customers (e.g., no penalties for cancellations, waiving fees, flexible booking models).  Preserve customer loyalty (e.g., premium discounts, loyalty packages). Supply Chain   Define extent and timing of exposure to areas that are experiencing community transmission (Tier 1, 2, 3 suppliers; inventory levels).  Immediate stabilization (critical parts rationing, optimize alternatives, prebook rail/air freight capacity, after-sales stock as bridge, increase priority in supplier production, support supplier restart).  Medium-/longer-term stabilization (updated demand planning and network optimization – solve for cash, accelerated qualification for alternative suppliers, drive resilience in supply chain). Marketing and Sales  Immediate stabilization (inventory planning, near-term pricing changes, discounts).  Medium-/longer-term stabilization (investment and micro-targeting for priority segments with long-term growth).  Examine online vs. branch strategy (e.g., in China now, no footfall traffic in major metropolitan areas but significant online demand; investing much more in digital). Practice Plan With Top Team Through In-Depth Table-Top Exercise  Define activation protocol for different phases of response (e.g., contingency planning only, full-scale response, other).  Key considerations: Clarity on decision owner (ideally a single leader), roles for each top team member, “elephant in room” that may slow response, actions and investment needed to carry out plan. Demonstrate Purpose  Support epidemic efforts where possible.  Click for full report, including supply chain actions to consider.

PEI Shares COVID-19 Resources 

PEI is in contact with U.S. officials overseeing the COVID-19 response and offers resources relevant to PEI members.  COVID-19 is caused by a member of the coronavirus family that’s a close cousin to the SARS and MERS viruses that have caused outbreaks in the past.   The disease is caused by a virus named SARS-CoV-2 by the International Committee on Taxonomy of Viruses.    COVID is short for coronavirus disease. Symptoms of COVID-19 can include fever, runny nose, cough and breathing trouble. Most develop only mild disease. But some people, usually those with other medical complications, develop more severe symptoms, including pneumonia, which can be fatal.  

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