Tuesday, April 21, 2020

Pandemic Planning: Winning at Transition

What problem are we solving? This is probably the single-best question to ask in any in strategic planning exercise. So, what follows are a few insights based on some recent questions from clients who are starting to plan for the next phase – that we are calling “Transition”.

In addition to reading the basic data at ourworldindata.org I had the opportunity recently to participate in a private Q&A with Cam Harvey a Professor of Finance at Duke University. Professor Harvey has stellar experience and credentials around the behavior of markets in periods such as this.  I also found Tomas Pueyo who writes brilliantly researched, data-intensive articles on COVID-19. He is a super-genius Silicon Valley engineer dabbling in epidemiology as a public service.  Prof. Harvey’s is profoundly a top-down academic perspective, whereas Mr. Pueyo’s is a wonderfully granular bottom-up pragmatic view.

How long will this last?
Campbell takes this on with a historical perspective on pandemics and recessions generally. He is emphatic and optimistic that this time is different because the cause is a bio-based hazard with a clear solution. Once we have a vaccine or to a lesser degree an effective treatment – problem solved, all clear. If policymakers support the millions of small and medium-sized businesses in North America so that they don’t permanently fail we can have a quick recovery, meaning growth in Q1, 2021. He is assuming that unprecedented global pharma R&D will save us.

What is “this”?
How long will what last? Pueyo uses an elegant metaphor of the Hammer and the Dance to describe the transition period. The Hammer is the blunt instrument, total lockdown to flatten the curve and significantly reduce the death toll from the virus. The Dance is management of society through a wide variety (Taiwan has 100) of tactics that contain it. Basically, learning to live with it. In North America we have only experienced the Hammer, in Taiwan, South Korea, Hong Kong they have moved on to the Dance.

That Dance is strongly enabled by your phone plus testing. Police and Public Health know where you are, where you have been and everyone else who has been near you. It is crazy surveillance and contact tracing and civil liberties aside it will happen here because it is much better than the alternative.

Importantly, Pueyo documents the mutation of the COVID-19 virus since its inception in China, which means that Transition may go on for years. No one knows how long it will take for science to make it go away. We can be fairly sure that we can learn to live with the virus because those models exist in other countries. That is what we are planning for.

Learning Flexibility
For office people it took two or three weeks to operate with everyone working from home. Manufacturing is a tougher task and retail is even harder, but we are making great strides at it. Let’s call this “learned flexibility”.  Once we agree that people can return to the office there is a good chance that for a period your office may have to shut down for a while again. No problem, been there, done that. Now apply that same mindset to mitigating the risk for the hard stuff.
The strategic capability is to achieve operational flexibility around the initiatives that limit the virus spread in your particular business.

An important part of the “planning” is to identify the initiatives and their impact on spreading the virus as well as their costs. As always you are looking for efficiency – biggest impact at the lowest cost. Seating half the restaurant may be effective, but it has a significant loss of revenue; maybe partitions are a more efficient solution. Simple, but not easy.  Flexibility will come into play because as the environment changes, more or less efficient tactics will be deployed in response. Maybe the hostess has to take a guest’s temperature, maybe not.

Other Stakeholders
As an industry you will need to lobby policymakers that you can Dance in your sector.  Namely that it may be unnecessary to mandate 50% seating when risk can be mitigated in other ways. Consumers are another critical stakeholder who will need to be persuaded.

Consumer perception of risk will likely vary from reality. Their feedback on what makes them feel safe and comfortable in a bar, restaurant or movie theatre will help you bring back the required volume for recovery. A little like some aspects of airport security post 9-11. It looks like they are making me safer!

Lockdown is unprecedented and for many businesses no advanced strategizing would have helped much. Transition though is coming and while it has unknown elements, in that way it is similar to all your planning, not radically different. The good news is that developing a menu of initiatives, learning to implement in a flexible way, getting feedback from stakeholders are fundamentals that will help you win in the transition to a post-COVID 19 world. As always, we are here to help.

Lighthouse Clients

Cases, examples and client references are available upon request. Some of our clients over the last few years are:

Toyota Canada
Landmark Cinemas
Sleeman Breweries
Toronto Blue Jays
Cadbury Adams
Constellation Brands/Vincor
Cara Foods/Recipe - Casey's, East Side Mario's, Fionn MacCool's, Bier Markt, Kelsey's, Montana's
Sigma Alimentos - a large food company in Mexico
Multiple Sclerosis Society - MS WALK
Yellow Pages Group
New Balance Canada
Ideazon -(Gaming Hardware)
Edwards Builder's Hardware

Going further back:
AB-Inbev
Pfizer - Viagra, Detrol
Volvo Canada
Canadian Blood Services
Bacardi
Red Lobster USA
Xerox Canada
Sprint Canada
Absolut (Maxxium)

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