Six months into the Covid-19 pandemic, it is time to take stock: While inclusive business companies have been plunged into a difficult operating environment, many have found ways and resources to adapt.
Companies must be quick to adapt: Many inclusive business companies had to switch to online marketing, secure their supply chains, or even change product lines. While some have struggled, those that emerge from the crisis have a chance to become more resilient.
In adapting to the pandemic, innovation is key: Technology creates communication channels during lockdowns. It can also help level the playing field.
Relationships, too, are crucial: When inclusive business companies can rely on their networks, they are more resilient. Public-private-cooperation may experience a lasting boost.
Disruptive as it is, the crisis is also a chance to build back better: While societies may emerge more cooperative, companies can become more innovative and more resilient.
Covid-19 is an unprecendented challenge for many companies – but it can be overcome.
Covid-19 has many faces. Some of them are very unpleasant – such as supply chain disruptions, financial uncertainties, and logistic difficulties. Yet, not all side-effects of the global pandemic are quite as bleak. The crisis may also represent an opportunity to build back better, enabling companies to become more resilient.
In this edition of CLUED-iN, we have started to take stock of the last six months of the pandemic. How did companies experience the pandemic? Which challenges did they face – and how are they reacting? Which resources did they find useful, and how do they envision the post-Covid-19 future?
The following two challenges emerged as particularly impactful.
Inclusive business companies had to adapt to a new operating environment.
It quickly became clear that the pandemic has created a challenging operating environment for many companies. “At AFEX Nigeria, we believe that we can solve Africa’s food insecurity problems”, says Hemense Orkar, Vice President of Commercial Operations at the company. Covid-19 has complicated this mission. “It became a lot more difficult to supply farmers with inputs in a timely manner”, he recounts, and goes on to highlight concrete examples, including movement restrictions, a reduction in crop yields, and a price hike for staple crops.
Martha Herrera González, Director of Corporate Social Responsibility at CEMEX, also paints a troubled picture of the situation. Normally, the company provides low-income families in Latin America with affordable building materials to construct their own homes. Social distancing has disrupted these activities. “We do not yet know how large the impact on our community partners and customers will be”, she states.
Covid-19 forces companies to rethink their business models.
Increased need for speedy adaption Both CEMEX and AFEX have found ways to adapt to the crisis. “Everything became decentralized overnight”, says Hemense Orkar, “we saw a lot more local empowerment.” CEMEX, too, has found ways to support their clients during the crisis: "We have partnered with many construction industry stakeholders to create business opportunities for many of our communities”.
But adapting quickly and efficiently is not easy. “One of the principal challenges for companies was: Were they able to make adjustments soon enough?”, explains Nicholas Colloff in our new podcast. The biggest challenges, according to the Executive Director of the Argidius Foundation, were how to effectively switch to online marketing, how to secure one’s supply chains, and how to – if necessary – switch product and service lines. As a result, four in five companies are struggling, with half of these in danger of failure. Only one in five companies saw their business increase during Covid-19.
"Covid-19 really did not affect us at all." – Thomas Ng, Genashtim
One of the companies successfully maneuvering the crisis is Genashtim. “It looks like we got to sail through Covid-19 without any problems. Our business is even getting stronger”, states Thomas Ng, CEO of the Singapore-based e-service provider.
But how exactly did Genashtim thrive in the midst of the global pandemic?
The answer takes us to one out of two themes that recurred in our in-depth talks with practitioners: innovation – in terms of technology but also work culture. Genashtim has been operating remotely for years – and has implemented unique ways of ensuring efficient work streams and a team spirit nonetheless. “We have implemented a tribal system”, he explains, “this year alone we had a chess competition, a talent competition, and various challenges. If you do not have the culture embedded properly, whatever you try to implement with the most fancy technology will fall apart.”
In a similar way, CEMEX and AFEX are employing technology to mitigate the adverse effects of the pandemic. At CEMEX Mexico, an app helps to keep the connection strong between the company and its customers despite of movement restrictions. Meanwhile, AFEX has used technology to enable remote client meetings. “Be ready to adapt, be ready to change, be ready to move quickly and leverage technology”, Hemense Orkar recommends.
Innovation is key.
The second recurring theme is relationships. “It was important to rely on the relationships we created prior to the advent of the pandemic”, recalls Hemense Orkar, “when it came to a shortage of inputs around the country, the partners that had worked with us for years were more willing to supply us.” Martha Herrera González, too, lists the social capital built with NGOs, academia, local governments and other companies among the key resources CEMEX had drawn upon during the crisis – a network built through inclusive business activities.
Such relationships extend beyond the purely local to the national and even international level. “The crisis created by the pandemic is huge and ongoing, so companies and governments have to collaborate to face it”, states Camille Putois, CEO of the Business for Inclusive Growth coalition. Katie Hyson, Director of Thought Leadership at Business Fights Poverty, agrees that “the collaboration between organizations, between sectors, between people in different spaces, has superseded anything that we have seen before”.
Networks have helped inclusive business companies stay afloat.
This momentum is likely to continue. “Public-private collaboration will continue to grow stronger”, states Camille Putois, adding that social inequality continues to call for a cross-sector response. Nicholas Colloff, too, predicts “a tighter, more collaborative ecosystem of support” for inclusive business.
Meanwhile, the technology used to mitigate the disruptive effects of the pandemic may help level the playing field for everyone. Thomas Ng, for instance, suggests that teachers may use technology to teach poor children remotely: “Technology should already have made that happen. Maybe with Covid-19 things are going to start to happen.” Katie Hyson, too, hopes that technology may help to tackle social problems – by helping companies to shorten their supply chains, for example.
On the individual company level, too, there is an opportunity to build back better. “Companies that survive Covid-19 have the opportunity to grow stronger”, says Thomas Ng. They can reorganize the way they work, become more efficient and more cost-effective. The spirit of innovation and experimentation, too, may survive beyond the end of the crisis. For AFEX Nigeria, for example, Covid-19 is a challenge – but also an opportunity to innovate and introduce new technological solutions.
Disruptive as it is, the crisis may also be an opportunity.
We have asked our interview partners for resources that have emerged as being particularly relevant to continuing to thrive during the ongoing pandemic. We strongly suggest accessing those as they can help formulate concrete next steps at the company level.
Business Fights Poverty has published a panoply of resources to support companies navigate the crisis – toolkits on supporting vulnerable workers, guidelines on supporting communities, and a framework on building back better, for instance. Financial organisations, too, are a crucial source of support to tap into. “Talk to your bank manager”, Nicholas Colloff recommends – “financiers are not your enemies.” In addition, companies themselves are providing support to each other. Members of the Business for Inclusive Growth coalition, for example, are extending multi-faceted support to suppliers, costumers, and communities.
Additionally, find herewith a number of links to access that can help you to stay resilient while Covid-19 is ongoing:
- CLUED-iN #11: Business Resilience
- Investor & Technical Assistance Database
- Inclusive business and Covid-19 recovery
- Business Fights Poverty: Business and Covid-19 Response Center
- African Management Institute: Survive to Thrive virtual programme
Images: Canva (free media), Pixabay and Unsplash