Emerging stronger after COVID-19Building an enduring business as the outbreak continues…

24 March 2020

2

Welcome

Tanja Juul ChristiansenPartner, Strategic and Reputation RiskMA, Ph.D.

We help organizations protect and strengthen business and reputation before, under and after a crisis.

3

Organisations are facing large, unprecedented challenges

Today we will touch upon the characteristics of organizations that manage to, not only return to business as usual, but actually emerge stronger on the other side.

• The challenges posed by COVID-19

• Creating crisis readiness

• Ensuring agility in the set-up

• Defining the best response strategy

• Demonstrating crisis leadership

• COVID-19 has spread all over the world – some countries are beginning to return to normality, while others – like Denmark – is still in the early phases

• Denmark has been ‘shut down’ with a countrywide lockdowm for at least two weeks and closure of all human traveling across borders

• New information keeps pouring in changing scenarios on a daily basis and we might experience more measures from the Danish government

• The government are also working hard to support the Danish economy leading to new ‘rescues packages’ to be presented.

Business leaders across

every industry face a

myriad of important and

difficult decisions in

dealing with a situation that

is highly volatile and for

many unprecedented.

4

The current challenge

5

Some estimates suggest a nine-week epidemic period. However, ‘delay’ measures to reduce the peak infection rate may prolong the epidemic to 15-20 weeks, thereby dampening the curve.

Ab

sen

tee

rate

% o

f w

orkf

orce

*

Time in weeks 0 5 10 15

0

40

20

20

Worst case scenario

30

10

More likely scenario

Best case scenario

H

M

L

Infectious

High

Medium Low

Even in a ‘best case’ scenario we are only in the early stages of the crisis

We are still facing many uncertainties

Even though we have been in crisis mode for quite some time, the model illustrates that we are only in the initial stages.

• We don’t know to what extent the workforce will be affected

• We don’t know which measures will be taken by government to fight the virus, or for how long they will last

• We haven’t yet seen the entire range of initiatives taken to support the Danish economy.

6

The entire complexity of the eco-system must be taken into considerations

Internal

Competition and regulation

Suppliers

Reputation Two-Way Influences and Lobbying

Two-Way Influences and Lobbying

Seek to Attract

Target

Target

Influ

ence Compete

Expansion into Business

Acquire

Influ

ence

Social media discussion

Mainstream media coverage

Involvement from key influencers

Customer sentiment

Workforce backing

Shareholders

Suppliers

Key competitors

Your organisation

Regulatory and government bodies

Tech start ups

Protest, criminal and hostile groups, whistle-blowers

Keeping eyes on the future

Though we do not know when, this crisis will pass.

Every organization must take the entire eco-system into account when figuring out how to operate under the close down in a way that enables come back after the close down.

No business is the same

The implications of the close down vary from organization to organization dependent upon a whole range of factors such as:

• Industry

• Locations

• Number of employees

• Business model

• Channels

77

Managing the crisis will be a marathon – not a sprint

RespondRight now there is a huge sense of urgency and many organisations will be busy acting.

• Understanding

• Deciding

• Adapting

• Communicating

• Ensuring continuity … to the extend possible

Risks:

• Too fast and too operational

• Under- or overestimating consequences

ContinuingAt some point the most dramatic part of the crisis will be over – but the crisis itself is not. This phase will demand persistency.

• Keeping pace

• Keep communicating

• Thinking forward

• Understanding future scenarios

• Adjusting or disrupting

Risks:

• Strategic and operational fatigueless

• Entering into post crisis mode too fast

New normalWhen the crisis is over a new normal must be established. This is the time to emerge stronger by both looking back and forward.

• Creating closure

• Crisis review

• Future crisis strategy & scenario development

• Risk analytics

• Adjusting BCM

• Implement new ways of working

Risks:

• Old normal

8

Emerging stronger

99

First and foremost one must know the core business and its vulnerabilitiesCombining top down and bottom up

Know what to protect

Most organizations have contingency plans and continuity plans in place, but not all are useful. Typical pitfalls are:

• Too many plans

• Silo thinking

• Lack of strategic ownership

• Designed for one off catastrophic events

To make use of the crisis preparedness and planning, one must ensure:

• In depth analysis of key vulnerabilities

• Overall recovery strategy

• Plans to support recovery strategy

Embeds strategic direction led by top management

Identifies key business objectives for continuity

Prioritises the most critical processes for the business as a whole

Identifies top level business relevant risks

Key attributes of different approaches Taking an integrated approach

Top

-dow

n

app

roac

hB

otto

m-u

p

app

roac

h

Identifies key dependencies to critical business activity

Provides detailed planning information to inform recovery strategies

Accounts for varying business function criticality

Led by top management who understand the overall business

strategy

Prioritises business activities based on

their relative importance across

the whole organisation

Owned and implemented by the business who understand the

detail

Informs the strategy selection and development

of plans and procedures

1010

The crisis management set-up must be designed for agilityEnabling the organisation to respond to an ever changing situation

MonitoringPersistent monitoring of bespoke, open source data feeds to identify substantive changes, track trends, and flag time sensitive developments.

Enhanced intelligenceIn depth thematic investigations to support business decisions around key topics relating to specific risk concerns or potential opportunity areas.

SensingActively harvest key information from bespoke data feeds using dynamic open source intelligence collection methods to hunt for and identify risks and opportunities.

Ensuring situational awareness by risk intelligence

Fluid crisis management teamTeam composition, roles and responsibilities depend upon the

issue or crisis at hand ensuring that the right competencies are represented.

Constant check-insLong status meeting and path dependency replaced by

constant check-ins to reflect the changing situation

Digitalising the CMOEnabling a constant overview of the response, ensuring right level of accountability, enabling remote working and avoiding

bottlenecksSimulationsCombining historical data with future scenarios to simulate crisis such as for instance the effect of global warming on specific locations.

Responding timely and efficiently

1111

A strong response strategy requires creativityAll elements of the business model must be taken to account

Develop crisis scenarios Analyse impact and response opportunities

Supply• Identify risks and disruptions for

specific scenarios• Monitor• Restructure to improve resilience

People• Define competencies needed• Assess the people risk• Analyse and decide upon ramp down-

ramp up scenarios

Demand• Analyze and adapt to changes• Review orders vs. commitments and

inventory• Strengthen customer relationship• Revisit customer channel

Finance• Implement cash flow conservation• Evaluate working capital and liquidity

requirements• Revisit cost structure/pricing

Value proposition• Revisit value proposition• Consider temporary or permanent

changes

Channels• Analyze how current touch points and

distribution are affected?• Consider which new touch point could

be created

How will the crisis evolve?

Sketch out worst case, best case and realistic scenarios considering elements such as:

• Length and depth of the virus spread

• Length and depth of governmental measures

• Short term and long term effects on economy at large

• Short term and long term effects in your eco-system

• Etc.

Remember to involve the organization in the development to ensure the right

picture.

12

Involve your stakeholders in the problem solvingUser driven innovation may sound grand, but it can be small-scale too

Unprecedented situations call for unprecedented solutions

• Reach out to your stakeholders

• Abolish red tape

• Use existing and available technology

• Remember cyber security

Suppliers

ReputationTwo-Way Influences and Lobbying

Target

TargetIn

fluen

ce Compete

Expansion into Business

Influ

ence

Social media discussion

Mainstream media coverage

Involvement from key influencers

Customer sentiment

Employees

Shareholders

Suppliers

Your organisation

Tech start ups

Key competitors

Regulatory and government bodies

13

DESIGN FROM THE HEART

Seek and reinforce solutions that align to your purpose, your

societal obligations, and serve the heart of the organization

Don’t forget deliberate crisis leadership

MISSION FIRST

Stabilize today, and harness both the energy and the constraints of volatile conditions to spark innovation tomorrow

SPEED OVER ELEGANCE

Decisive action – with courage –is often more essential than getting it perfect

OWN YOUR NARRATIVE

Paint a picture of a compelling future and path forward that

your stakeholders can support and rally around

EMBRACE THE LONG VIEW

Stay focused on what’s on the horizon to instill the confidence

and steadiness across your ecosystem

In the crucible of crisis, resilient leaders are defined first by who they are

14

“Shutting down the economy -- and more importantly turning it back on again -- is not like shutting down and turning on a light bulb. It's more like shutting down and restarting a nuclear reactor. You need to do it carefully, and make sure the parts survive the shutdown intact.”

John Cochrane, Hoover Institution

Thank you