If the maxim is true that business hates uncertainty, then COVID-19 is especially loathsome. The unpredictable virus has shuttered companies across the globe, disrupting day-to-day operations in almost every sector. More than two million Canadians are now seeking unemployment relief as employers try to adapt. There’s no playbook for dealing with a pandemic, but for solutions, Canadian business leaders can look to jurisdictions finding resilience against the virus. The original epicentre of the outbreak, Wuhan, China, is starting to re-open for commerce after more than two months of lockdown. And Tokyo, Japan, has managed to avoid a lockdown while also effectively containing the disease. Not every sector is struggling either, as many companies are finding ways to innovate through the crisis.
Here, four executives with experience dealing with COVID-19 weigh in with key lessons learned to help companies to get through the coming weeks and months.
One of the major underlying challenges of COVID-19 is that no one knows how long it will last. That’s why John Muffolini, the national leader of technology, media and telecom with MNP, an Alberta-based accounting, tax and business consulting firm, says simply waiting out the pandemic is not an option. Many of MNP’s Canadian clients felt initial supply chain disruptions in January when Chinese manufacturers started closing — disruptions that were unpredictably protracted by recent Canadian shutdowns. “This is an unprecedented situation,” he says. “So even if finances look okay now, we’re advising all our clients to have detailed plans to deal with reduced sales pressures as well as how they are managing cash flows to pay their vendors, creditors and employees. It’s important to be aware of the various government programs being announced to help with credit liquidity, tax relief and wage subsidies. Businesses may face tough decisions ahead. Knowing all the options and planning for the inevitabilities is critical.”
It’s easy to despair at a time like this, but Muffolini suggests looking for business bright spots and ways to innovate. “Although bricks-and-mortar distribution to customers may be on hiatus,” he says, “logistics companies are growing like crazy because of the huge focus on distributing products and services online.” Amazon and Walmart, for example, are hiring more than 100,000 people for their North American distribution centres. Likewise, any company that facilitates online interactions — such as Zoom for video meetings — is seeing a spike.
Mitsubishi Corporation, a global integrated business enterprise with 10 different verticals across virtually every industry, shows resilience in certain emergency situations with its diversity of business. The company has been continuously modifying its business model over recent decades. “Now pure trading makes up only a small part of the company’s profits. Rather than simply trading, we manage actual operations in each of the value chains that we cultivated through trading. For example, we have invested in shale gas and salmon farming operations in Western Canada,” says Asako Vitous of Mitsubishi Canada Ltd.’s Vancouver office.
A harsh reality of COVID-19 is that even in such jurisdictions as China and Japan, where containment efforts appear successful, a second wave of infections remains possible. When Canada’s Woodbridge Group, which manufacturers commercial and automotive products, recommenced operations in Wuhan, China in late March after a two-month lockdown, it did so cautiously. “Re-opening is a gradual process with many new safety procedures that people need to follow,” says Hassan el Bouhali, CIO of Woodbridge Group. “We are adhering to the best directions from local health authorities — something we will do in every jurisdiction where we operate.” That might mean maintaining social distancing protocols in a plant by spacing workers out farther than normal, ensuring extra sanitation measures with more frequent cleaning and providing adequate training for all staff and managers to ensure compliance. “This could impact productivity and increase costs in the interim,” says el Bouhali. “But it’s important to maintain the health and safety of all staff.”
Closely following sanitation protocols helped the Tokyo headquarters of Mitsubishi Group remain in operation during the outbreak — a lesson learned from previous epidemics. During H1N1, “the company required every employee to wear masks,” says Eita Kitani, vice president of the Boston Branch for Mitsubishi Corporation (Americas). “Two or three masks were put on every employee’s desk. Some may have thought that was over-reacting, or that it was strange to see everyone in a meeting wearing masks. Now we are grateful for the recommendations.”
Re-opening slowly might seem, well, slow. But there is a benefit. Because of the uncertainty around the disease and how long it will affect businesses and society, a gradual, fluid start should allow for the necessary caution and flexibility if the situation rapidly changes again.
Business is competitive by nature. Something that has helped The Woodbridge Group navigate COVID-19, however, is setting aside competitive differences. CIO Hassan el Bouhali is regularly in touch with CIOs at other manufacturers. “It gives me a chance to double-check my assumptions and validate my thinking and learn from what others are doing,” he says.
Likewise, Mitsubishi is also sharing intelligence with other Japanese companies, especially to parse any new government and regulatory developments in the various countries where Mitsubishi operates. “At a regional level, we cooperate,” says Kitani. “We are trying to talk with Japanese companies that operate locally to see what they’re going to do as the situation evolves.”
As COVID-19 has spread, Mitsubishi has been able to quickly transition employees to working from home with minimal disruptions. In addition to strong IT infrastructure — critical because “almost all the employees are connected to VPN,” says Vitous, of Mitsubishi Corporation — risk mitigation training was crucial. “Every year we do disaster drills and simulations and discuss the possible implications on the business environment,” says Vitous. “We get a notice from head office, giving us a scenario, testing us with what we do in a natural disaster, for example, or a breach in cyber security.”
“If nothing happens, then such risk preparations are a cost,” says Eita Kitani of Mitsubishi Corporation (Americas). “But things always do happen. In Japan, there is always something, such as the 2011 earthquake. We have yearly typhoons. It all reinforces the need for constant vigilance.”
Going forward, COVID-19 will shape The Woodbridge Group’s approach to potential black swan events. “Crisis is also an opportunity to learn,” says el Bouhali. “I think if there is one thing we should all learn, as a company and individually, is that we should view risk management very seriously as a discipline and at least twice per year take time to review prevention and mitigation strategies for even wilder scenarios. We shouldn’t disregard anything.”