Which Businesses Will Survive COVID-19 – Five (5) key actions businesses are taking to adapt and find success
COVID-19 is arguably the greatest disruption to global society and business since WWII. In the second year of the worldwide COVID-19 pandemic, we continue to see the incredible impacts on society and business as countries experience more cases, more deaths, and more economic instability. Hopefully, the end is in sight as vaccines are rolled out, even if there will continue to be hotspots for some time.
Whilst the past year’s struggle with COVID-19 has been difficult and often tragic, within it have been examples of personal and organisational inspiration that have demonstrated success and served as examples for us all, not only for now but also for the post-COVID-19 world.
They show a pattern of action which delivers consistent success irrespective of sector or location; these are the COVID-19 secrets of survival and success.
In this article, we will explore which businesses will survive COVID-19 by covering the following topics:
- The psychological journey of COVID-19
- External factors impacting business survival during COVID-19
- Internal factors impacting business survival during COVID-19
- Five (5) surefire actions for future resilience – becoming an “Accelerator”
The Psychological Journey of COVID-19
Our COVID-19 journey has been a rollercoaster of actions and emotions.
Shock, disbelief, and denial – our initial response was similar to anyone facing a sudden and traumatic event–essentially telling ourselves that this can’t really be happening and, if ignored, will go away. But, as governments started to enact travel bans and lockdowns and cases started to exponentially rise, acceptance of the reality of the threat was forced upon all but the most resolute deniers.
Heroic response – once organisation leaders and employees had accepted COVID-19 was potentially an existential threat to their survival, there were two simple choices: work together to survive or fail. Everyone aimed for survival, and for the first time in many people’s careers, everyone in their organisation truly did give their best and worked together. It might have been because the other alternative was too frightening to contemplate, but it worked.
Bureaucracy was slashed, processes were simplified and streamlined as much as possible, workarounds were developed to continue doing business, and everyone worked to their limits to make it happen. According to reports in many organisations, a “we not me” culture grew.
Sprint to a marathon – when COVID-19 initially hit, no one had any idea of its potential duration. In early April, whilst medical experts looked at the 1918 pandemic as an indicator, the business world, in general, followed the traditional management bias towards an optimistic outlook, sometimes encouraged by politicians with their own survival in mind.
The consensus was that this would last three months and be gone by June or July 2020. Thus, they predicted the level of intense effort in the “heroic response” could potentially be sustained. By May, however, it became clear this wasn’t reality; the sprint had become a marathon where current effort levels were not sustainable for that long.
Shattered hopes – everyone dug in for the long-term, and into July, as time passed, stress levels and associated mental health issues rose. Some businesses had run out of money by this time either because of lockdowns, drop in consumer demand, or both. Those who had got this far were hoping for a September escape, which is when the second wave hit across many countries.
The sudden removal of what had seemed like a finite end of the pressure was replaced by the realization that there was no end in sight and that things were going to get worse. At this point, people started to lose hope.
Vaccine vision – in September 2020, as the gloom over a second round of lockdowns spread, a ray of hope for business appeared with the announcement of vaccines. This was good news for a long-term game plan but still did not offer immediate relief. No vaccines would be administered until early 2021.
In the fall of 2020, businesses knew they still had at least another three challenging months ahead, but if they could make it through, there was a chance of surviving. By this time, many government-supported initiatives had come on stream making business prospects look more positive.
Knife-edge race – as we move towards the summer of 2021, there is a race between vaccine delivery and variant spread. This race and the side that is winning varies across the world. Countries with higher vaccine implementation and/ or lower variant spread are able to slowly open up their economies, e.g., UK, UAE. Those with lower vaccination and building variant spread are having to shut down yet again, e.g., Italy and France. Others, e.g., the USA, are balancing on a knife’s edge.
How this race plays out will determine if organisations will have to endure further lockdowns and/or low consumer demand. It’s also clear that even in places without a lockdown, people are voting with their feet by not returning to in-person businesses where they perceive a high risk unless they are vaccinated.
External Factors Impacting Business Survival During COVID-19
Some of the factors determining which organisations survive and which don’t were not fully in control of the organisations themselves but imposed upon them by the situation.
The key to preventing the spread of COVID-19 was social distancing, and that became the primary driver for establishing lockdowns. Thus, the greater an organisations’ ability to keep functioning within a socially distanced world, or even a lockdown, the greater its chances of surviving.
Where social distancing was not possible, failure rates were higher. For example, an OECD study of smaller organisations showed failure rates in entertainment, events, and education up by over 20% compared to previous years, with hospitality close behind. On the flip side, however, construction, manufacturing, and basic services such as transport, water, and electricity saw under a 5% increase in failures.
Size, and the corresponding ability to withstand the financial impacts of COVID-19, have been another key factor. Size fed into many critical survival opportunities, such as the level of cash reserves or ability to borrow versus costs and the ability to reduce costs while maintaining base service levels to meet lower demand. These can be viewed as a cash buffer against failure; the longer COVID-19 went on, the more likely it was to run out.
Smaller organisations inherently had less of a survival buffer, and compared to larger ones, suffered a higher percentage of failures. We can all recall the stream of smaller organisations and local businesses we know that failed but relatively few larger ones that did. Large businesses most impacted by COVID-19 were in heavily exposed sectors, e.g., travel, where demand was effectively cut to nil.
Proof that size matters is well demonstrated by the global cruise industry, which was totally shut down. The main larger players have survived with no customers and the continuing fixed costs of their fleets, while smaller players have not been able to.
A third factor influencing survival during COVID-19 has been the speed and effectiveness of support provided by governments to businesses. This varied from nation to nation, but the OECD data shows that effective government support reduced failure rates. Targeted bailouts reduced the failure rate growth by around 9%.
If your organisation was in an eligible group to receive assistance, your survival chances increased. However, evidence from around the world has shown the practical implementation of many of these “bailouts” was far from effective either in terms of speed or accuracy. The vast majority of organisations which failed in the OECD study did so within the initial 8-week lockdown or within a couple of weeks of a lockdown ending. This time period was often before governments had organised bailouts. After bailouts started, approximately five times fewer organisations failed.
Internal Factors Impacting Business Survival During COVID-19
Given the above external factors, there were also internal factors within the direct control of organisations, which impacted their survival chances. These can be broken down into three key actions:
ASSESSING– how quickly and accurately did organisations assess the potential impact of COVID-19 on their business? Given the unknown nature of COVID-19 and the speed of spread, most organisations waited for some form of governmental guidance based on their expert assessment of the risks.
This governmental assessment was the trigger for social distancing, lockdowns, and travel restrictions. To some degree, governments dictated the ground rules when they officially identified some activities as “essential” and allowed them to continue despite lockdown regulations. Those considered “non-essential” were forced to cease operations where any of their activities compromised social distancing.
Once these government ground rules became clear, the fundamental assessment for organisations was simply, “Is it possible for us to do what we do with these restrictions, or can we adapt to meet them?”
This was the first test organisations faced. For “essentials” allowed to continue, this was challenging but not impossible. For some “non-essentials,” it was clear that even if not closed by a lockdown, any form of activity that did not comply with social distancing would have to cease.
ADAPTING – after assessing the potential impact and ways to mitigate it, how well did businesses implement changes?
Essential businesses in industries like construction, water supply, electricity, transport, healthcare, vehicle repair, or those designated as essential business carried on near normally with social distancing. The level of failures among these companies was up to four times lower than with the “non-essentials.”
The ability to adapt was largely the result of being able to answer yes to the following questions:
- Is there an open and positive organisational culture?
- Is leadership capability good at all levels both in terms of task management and motivating people?
- Is there clarity of action and purpose, so people know what to do and why they are doing it?
- Are employees engaged and giving their best?
- Is decision-making cascaded to the lowest possible level?
- Is there flexibility of thinking to reshape organisational systems?
- Is everyone encouraged to be innovative and entrepreneurial to look for opportunities to be better?
Inevitably, the better an organisation ranked in the above, the more likely they were to be able to identify and implement opportunities to adapt and continue operating, e.g., hospitality venues ramping up takeaway food services when indoor dining was banned.
For many, however, there was no option but to cease activity, e.g., gyms, beauty salons, hairdressers, as their survival was almost totally reliant on government bailout policies.
ACCERLERATING – having made their adaptations, how well did organisations accelerate adaptation through COVID-19, and who will continue to innovate in a post-COVID-19 world?
What is interesting is the degree to which, having completed an initial pivot in response to the COVID-19 world, some organisations are simply maintaining a new “COVID-19 status quo” whilst others have accelerated their efforts by identifying additional opportunities to adapt. A frequent example is small retail outlets that were either forced to close or who suffered massive losses in face-to-face business.
Many of these have slowly built up their online presence leveraging technology to stay afloat. Maybe they had never seriously considered online business and e-commerce an option worth their time. But, once COVID-19 forced them to consider this avenue, they discovered its benefits were greater than predicted and have opted to continue these post-COVID-19.
The last part of the Accelerate story is yet to be told. How many lessons learned from COVID-19 will be carried into the future? Will organisations revert to previous behaviour? We are already seeing some large corporates starting to say they will restrict remote working despite a significant number of employees wanting it and actually performing better because of it.
Organisations that have survived and truly absorbed these important lessons will accelerate into the future. Those who revert will potentially decline and eventually fail, and those who survived but don’t build on the lesson they learned will survive but get left behind by the “accelerators.”
Five (5) Surefire Actions for Future Resilience – Becoming an “Accelerator”
Based on insights from companies who are surviving the COVID-19 downturn, here are five actions that will continue to deliver business success in the future:
1. Focus on people – COVID-19 put significant pressure on leaders, and this pressure highlighted the difference between good and average leaders for employees who might not have seen it before. COVID-19 also showed that where organisations and leaders engaged and supported their people, those people were prepared to give their best to enable the organisation to survive and adapt.
It was simply about creating a genuine “we not me” culture. Not only was this a key factor in organisational COVID-19 survival, but it will also be a key factor in succeeding post-COVID-19.
2. Simplicity in everything – COVID-19 forced rapid responses from organisations that broke the traditional decision-making models, which were unable to provide answers fast enough. Complexity had to be broken down into simple and effective.
Time became exceedingly precious, and any unnecessary steps in a process that wasted effort and time and increased risk were discarded or streamlined. Simplicity delivered speed. Decision-making had to be cascaded to the lowest practical level to be fast and effective.
3. Develop entrepreneurial thinking – COVID-19 made many legacy ways of working and thinking redundant. Many organisations simply could not work as they did previously. This called for entrepreneurial thinking, creativity, and innovation to find and implement new ways of working.
Entrepreneurial thinking wasn’t as difficult as many thought, either. Above all, it was about a clear message from top leaders encouraging employees to think for themselves and come up with new ideas. This liberating environment created a rolling wave of new ideas which will last well past COVID-19 in organisations that continue to Accelerate.
4. Agile transformation – During COVID-19,those organisations which birthed new ideas were able to swiftly adapt and increase their chances of survival. Having great ideas is one thing; having the courage and ability to change the status quo for them is more challenging.
It’s about commitment to the future, seeing change as an opportunity, and optimising risk. It’s about that “the way we do things around here” is just a moment on the transformation journey. The ability to transform is key to responding to any future change in the organisation’s environment in the future.
5. Powerful purpose – the initial heroic response to COVID-19 gave a clear purpose to all organisations: adapt or fail. For the first time in many organisations, everyone was focused on a shared purpose, albeit enforced. It demonstrated, though, what could be achieved with an aligned and clear goal. The significant power of purpose should not be lost for the future but developed to power the post-COVID-19 organisation.
TAKEAWAY – What Delivers Success Remains the Same
What’s interesting about many of the things COVID-19 has shown organisations they need to do or forced them to do, is that a majority are what we have always said organisations should be doing to fulfill their potential anyway. The problem is that we’ve never bothered to do them properly, e.g., employee empowerment or entrepreneurial thinking, often just doing the minimum possible, token actions within the thinking and working restrictions of the status quo.
COVID-19 showed that if organisations implement the five actions for future resilience, they are more likely to survive COVID-19, and if they can do that, they will also help you be more successful in the future. Those who see the COVID-19 insights, learn the COVID-19 lessons, and accelerate out of COVID-19 will be the role model organisations of the future.
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The views expressed in this article are those of the author and do not necessarily represent the views or opinions of Natfluence / Influence 4 Growth, LLC.
About the Author | Chris Roebuck
Chris Roebuck is a British economist, speaker and Hon Visiting Professor of Transformational Leadership. He has been a leader in military, business and government holding senior roles at UBS, HSBC, KPMG and London Underground. Chris has advised major global organisations at Board Level on leadership and improving bottom line performance through people and helped individual leaders succeed as a neuroscience accredited executive coach.
Regarded as an influential thought leader and expert, Chris Roebuck is often quoted in major UK and international press, including the Financial Times, Wall Street Journal, CNN, Bloomberg and the BBC. Nearly one billion people worldwide have seen his expertise on television, and he has been voted as “HR Most Influential Thinker” 9 times in past 10 years. He has published 5 books, including the best-selling book, “Lead To Succeed” and has developed over 20,000 leaders through his inspirational keynotes and masterclasses unleashing the power hidden within people to succeed. To learn more about Chris, see his interview feature on Natfluence.