One on One with Arthur D. Little's Dr. Karim Taga and Rick Eagar

Taga: We know that many consultancies have recently issued reports in response to the crisis that refer to frameworks and methodologies. These have their place, but right now we wanted to focus instead on practical experience and testimony—what has been happening in the real world as business leaders tackle the biggest global crisis in their lives. We wanted especially to understand what were the key success factors, what went differently to the plans, and what implications the crisis might have for the future—including positive implications. We think this is more pertinent, useful and insightful for our business audience. The summary report includes extensive actual quotes to give some color and flavor to what we are trying to convey. That said, the summary report is just that, a summary—underneath this we have 25 hours of candid testimony from CEOs which provides a rich source of insight.

Consulting: What were the key takeaways in the findings?

Eagar: In the report we refer to takeaways first of all in terms of good practices:

—Being the right sort of leader: Be decisive but share the burden with your team; Delegate as much authority as you can; Keep yourself healthy both physically and mentally; Focus on the immediate but be constantly aware of the future

—Responding to the crisis: Move fast, assume the worst and be comprehensive (not step-by-step); Secure employee safety first, operational continuity next; Be agile and flexible but with a firm underlying framework; Practice and stress-test your business continuity plans regularly, including when your operating or business model changes

—Communicate, communicate, communicate: Keep staff closely informed, be straight, be detailed, and be prepared to spend most of your time on this; Focus on positivity and morale, and listen as well as tall: Ensure that you have the right technologies and processes in place for efficient and effective smart working

—Maintaining business continuity: create physically separate A and B teams for critical operations;; Actively support suppliers and ecosystem partners; Be innovative in cash management; Put in place dynamic, sensing risk management systems across both internal operations and external supply chains leveraging digital tools; Build in better supply chain and operational resilience

—Engaging with stakeholders:  Collaborate closely and openly with government and authorities; Engage with unions; Reach out and support local communities: Ensure that you 'do the right things' now, because your stakeholders will not forget what you did in the future!

—Planning for recovery and growth: Be realistic but start planning for recovery now; Use separate teams to work on recovery when the crisis is still happening; Leverage the potential of opportunities in the 'new normal' of the future

We also highlighted things that tended to go wrong during the crisis:

—Getting reliable information and intelligence: Especially in the early stages of a global pandemic, it is difficult to understand and align all parties around real facts and intelligence.

—Velocity of the crisis: Several companies had not planned adequately for the rapid velocity with which the crisis escalated around the world.

—Understanding the whole ecosystem: Some businesses found that their plans did not sufficiently consider the impact of the crisis on the suppliers and partners in their ecosystems, which then hit their own operations.

Coping with uncertainty: Companies have therefore found that agility and flexibility is critically important, more than they had anticipated in their plans.

For the future the key takeaway is that  companies need to have a more dynamic, forward-looking approach to business resilience management. This is now much more possible than before with the advent of predictive data analytical tools which can continuously ingest data and provide real-time updates on Key Risk Indicators.

Consulting: Were the action items what you anticipated or did any of the findings surprise you?

Taga: The findings were a combination of both:  We anticipated some of the best practices around immediate crisis response, communications, maintaining business continuity and engaging with stakeholders.  We were not surprised by the strong leadership focus on safety of employees and customers as being the absolute No 1 priority.  We were surprised that in many cases there had not been any effective stress-tests and drills on pandemic crisis response (apart from companies that had already been exposed to the previous SARS epidemic).

Consulting: What are some of the big lessons learned thus far?

Eagar: The big lessons are: 1) Companies need to have much more effective forward-looking and dynamic business resilience systems, which is now much more possible given new digital technologies around AI/ML and data analytics; 2) Despite the tragedy of multiple fatalities and the severe economic shock – there will ultimately be positives to emerge from the crisis, such as a new sense of collaboration and common destiny; more 'smart working' and virtualization; impetus for more efforts on sustainability.