It’s time to start planning for the recovery. Here’s why.
It’s only a month since we were planning for the apocalypse. The news from Italy was dire and, Australia was tracking along a similar curve. Until we weren’t. In the last four weeks, we’ve had a shutdown and a comparatively mild lockdown that has put a few hundred thousand people out of work and sent thousands of businesses to the wall. This is still playing out.
The IMF recently predicted a sharp V-shaped recession for Australia with GDP down 6.7% this year, but the critical point here is the bounce, with 6.1% growth forecast for next year. This could happen faster than they hoped.
Recent headlines are about the states with zero new cases in the previous days. Even the worst affected state, NSW, is well past the peak of cases and many of the new cases are people who have recently returned from overseas and are in hotel quarantine, unable to spread the virus. On the other side of the equation, we’ve stockpiled PPE and ventilators, and our hospitals are prepared, many with empty Corona wards ready for a deluge.
Leaders are already talking about relaxing restrictions. Schools are planning to open up to more students. Sydney beaches are re-opening, at least for exercise. Elective surgery is re-starting. Jacinda Ardern has suggested re-starting international flights with Australia and New Zealand will start winding back Corona restrictions on April 27th. Even in hard-hit Europe, Italy is easing its lockdown and Germany is ending theirs. These are tentative first steps, but a pattern of recovery is emerging.
I’ve even heard talk of Australia re-starting international flights with other countries that have COVID under control, including China. Imagine if Chinese students and tourists could come here while the rest of the world was closed to them. That alone could jump-start a recovery.
Lindy Muller, our FP&A Practice lead, recently wrote a blog post, Planning for a “VUCA” world post Coronavirus. Her top recommendation was to develop scenario plans. That means having an up-side plan as well as a down-side one. You may need that recovery scenario sooner than you thought.
While there is still cause for concern, and we could get a second wave of infections, I feel that this is unlikely – social distancing has become ingrained and Australia is testing widely. To me, the greater risk to business now is not managing the recovery. Gartner’s term is, “Winning in the Turns”. Much like motor racing – it’s easy to drive straight – the bends sort out the winners and losers. Similarly, in business, some will come unstuck in the downturn and others will accelerate too slowly in the upturn.
Winning in the turns can include buying a struggling competitor, finding skilled staff that rarely come on the market and anticipating that your customers may swing from pessimism to optimism very quickly. You can also lock in some of the gains that the crisis forced on you. I have heard of healthy companies letting leases lapse while everyone is working remotely on the assumption of better deals. Large companies have announced that teams forced to work remotely will stay that way.
Remote working can save a lot of money – staff commute time, office space; it can even reduce turnover and allow AI to crunch recorded meeting data, taking notes and adding tags. Realising the benefits of remote working requires overcoming the fears and risks of data loss and getting the right balance between chaos and control as Hein Taljaard, our Pre-Sales Architect, points out in his blog post How to manage and secure Teams for remote work. Now is the time to review and improve the remote working procedures that were implemented in haste, adding governance and control.
One of Gartner’s recommendations is to innovate to save costs in the long term, rather than simply cutting IT spend now. This can include migration to the cloud, outsourcing and automation. Cutting all IT spend will leave you behind your competitors after coming out of the turn
Don’t believe the old saying, “plan for the worst and hope for the best” – you also need to plan for the best.
I’d love to hear from you. Feel free to get in touch and talk recovery.
Decision Inc. Australia