The COVID-19 global pandemic which started as a health crisIs has practically made the world stand still, the worst in 100 years since the Spanish flu in 1918, leading many countries to economic recession. As the quarantine lockdown severely disrupted mobility and dampened consumer spending. Philippine GDP shrank to negative 0.2% in the first quarter, expected to contract by as much as 6.7% in the 2nd quarter. The IMF now sees the Philippine economy shrinking by 3.6% in 2020. The BSP in a swift proactive move further cut its overnight reverse repurchase, lending, and deposit facilities by.50 basis points to new record lows of 2.25%, 2.75% and 1.75%, respectively, to spur economic activity. The financial stimulus bill is pending in Congress. The positive thing is that outlook is good with 6.5% growth back in 2021 supported by infrastructure spending and anticipated recovery in consumer and business confidence.
At the John Clements Leadership Institute platform “Leading Through COVID Crises” held recently, Professor Ranjay Gulati of Harvard Business School says: “A Crisis is a Terrible Thing to Waste.” He talked of a study of about 4,700 companies which survived 3 past crises and 9% of the companies came out stronger, even becoming market leaders in the recovery. What did the 9% do to come out better? Mr. Ranjay says that usually in a crisIs, inaction sets in, because of limited information, we don't know what must be done. And even if we know, we don't know who should do it. In a crisIs comes uncertainty, (I don't know) and loss of control (sense of loss of power) which equals fear. Fear impairs our cognition, affects emotion and colors our ability to take action. In a crisIs, it’s very important to mobilize the organization. He even used parenting style as the model where there is freedom but within a framework.
He recommended the importance to do both offense and defense and balance it. To do simultaneously is an art as it’s difficult to reallocate scarce resources. Generally, what happens is that cost cutting is priority which is very important given lower revenues. But he encourages to continue being in lookout for new opportunities as well. He talked about the power of Reimagination. Reimagine the organization, what new products should you offer given new conditions. Who is your new market? What business are you actually in? He gave the Kodak example in the film business which closed shop when films became passe and our mobile phones took over. Fuji films also in the same business thrived. How? It has reimagined its business, still in film but expanded to healthcare as well. Reimagine your operations. How? Need to deepen customer relations, connection and education. Need to get closer to customers to understand their constraints, balance familiarity and novelty. What is consumer demanding and how will you reposition the operations. With social distancing and less contact preferable now, online ordering, service deliveries, a growing business. Reimagine the way you work. The evolution of work from use of bundy clock in the office to work from home thru virtual means. Reimagination is not just looking at new ways of repositioning your business but also what to remove and drop.
Rick Warren, author of Purpose Driven Life asked who doesn't want to have a remarkable business, a remarkable life and career? Remarkable is being outstanding, out of the ordinary. Here are Ricks four (4) valuable guides:
1.Be Respectful of everyone. Treat other people the way you want to be treated.
2. Be Reliable means to be trustworthy, honest, dependable and faithful. Always tell the truth and deliver on commitment
3.Be Resourceful. Think of new ways to solve problems. Be imaginative.
4. Be Resilient. Resilience is the ability to adapt to adversity and even grow from it.
Don’t give up. Try and try again. Keep going ahead. Ability to bounce back.
So how do you grow stronger and better from a crisis? How do you continue being optimistic despite the difficult challenges and how do you find opportunities even in a down market? How can you reposition your company to show higher growth after COVID? Let’s go back to basics. To the very purpose, the meaning of why you started your business. And try to be remarkable in anything you do.
Bias for Action. Conserve resources but always be in lookout for new ways of doing business and new opportunities. Reimagine your business. Be resilient. At this time, be healthy and stay safe, wear your mask. What’s good of having a business if you're gone? Most of all let’s strengthen our faith and not fear.
Ms. Flor Gozon Tarriela is chairman of the Philippine National Bank and PNB Capital. She is a former Undersecretary of Finance and the first Filipina vice-president of Citibank N.A.
She is a trustee of FINEX Foundation and FINEX Academy and an Institute of Corporate Directors fellow.