What lessons can business learn from government responses to COVID-19

25 May 2020

As COVID-19 has fanned out around the world the responses of national governments have differed significantly as has the effectiveness of those responses.

The old fault lines of the developed and developing economies do not provide the easy dichotomy to parse responses as they might have in the past.  In fact, the three worst-affected countries are all modern economies - the US, the UK, and Italy. But rapidly closing in on them are two of the BRIC nations  - Brazil and Russia whose economies have only more recently modernised over the last two decades.

In comparison, APAC nations - especially those countries with direct exposure to the SARS outbreak at the start of the century and irrespective of whether they are developed and developing countries - have generally responded more effectively.

Australia thankfully sits in the second camp.

We asked Richard Hames, the founder and executive director of the Centre for the Future to outline the lessons business can learn from these responses.

According to Hames, “It is imperative to include strategic foresight in any kind of planning methodology you use.”

He said this is true irrespective of the size of the company or the industry in which it operates.

“Developing the ability to use foresight and to utilise all the tools available, needs to be learned and adopted and integrated into strategic planning.”

Data is critical

He said, “You can't develop foresight as a capability in an organization, unless you've got access to real-time, business ecosystem intelligence. In other words, you' have to have a way of collecting data and information that can help you make decisions when you're using foresight.”

He also stressed the importance of real-time navigation and treating strategy as a living process. “We have to abandon the old idea of the executives going away for a week, every year to prepare a strategic plan - that's dead in the water.”

Then, of course, there is the simple matter of competence, an issue where the stress testing impact of COVID-19 on institutions has laid bare poor leadership and management.

“I would quote Paul Polman, the CEO of Unilever between 2009 and 2019, and an extraordinary CEO by any standards. I’m paraphrasing him but he said, the very compliance and conservatism that led you to get the top job really now disqualifies you from knowing what to do today.”

Hames is critical of the overreliance many businesses have of traditional corporate qualifications and approaches. “I think one of the problems is that we put too much stock on MBA graduates, formulas, and management consulting.”

The current crisis exposed the weakness of cookie-cutter approaches when all the rules and assumptions that underpin those ideas disappear or change.

“The lesson is that competence must change because of the context. So when the context changes, the level of competence and the kind of competence you need changes.”

Hames calls out the responses of Cisco internationally, and Qantas and Woolworths as effective examples of leadership.

“I was most impressed with Cisco very early on in the piece, where CEO Chuck Robbins was addressing all of his staff on WebEx and he told them the company would guarantee their jobs for at least three months. That was extraordinary and more CEOs could have done that.”

With Qantas and Woolworths he praised the approach where the laid-off workers from the airline were offered roles at the retailer which was struggling to meet demand.

He also used the example of his own organisation to illustrate how the issues are just as important for smaller businesses.

“Here at the Center for the Future, we were not really geared up to respond to client needs instantly. Within days, my board had organized a rapid response team and we had an online process available for clients that went into operation literally within three days.”

Comparisons are odious

Hames also said that in trying to learn the business lessons from government responses it is important to understand what is happening at a much deeper level than just the headline statistics, and he used the disastrous outcomes in Italy and the controversial approach on Sweden to illustrate the point.

Any comparison between the two needs to account for demographics for instance. “You know, population density [in Sweden] is about half that of Italy. Sweden has a very high proportion of single households and very few intergenerational households.”

Italy also has a much older average population.

Likewise, any comparison between North America and the other APAC countries needs to acknowledge the Asia Pacific cultures tend to be more compliant (even in a country like Australia) compared to the US which places a premium on individual liberty.

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