How should companies deal with the huge impact of the epidemic?
Editor’s note: This article comes from WeChat public account “Spring is blooming” ( ID: CCH_chunnuanhuakai), author Chen Chunhua.
The new crown epidemic has had a huge impact on China ’s economic operation. How should companies face downward economic pressure? Professor Chen Chunhua provided five countermeasures from the common parts.
During the Spring Festival of 2020, the epidemic situation of new coronavirus infection pneumonia spread rapidly across the country. On January 30th, local time, WHO announced it as “PHEIC”. The nationwide fight against the epidemic has taken many preventive measures. The epidemic interrupted the Spring Festival holiday of the Chinese people, and also had a huge impact on China’s economic operation.
Effects of the epidemic on the economy have been predicted by many experts. The Evergrande Research Institute believes that from a macro perspective, the sudden decline in demand and production will have a significant impact on investment, consumption, and exports. This will lead to rising unemployment and rising prices. For the Mekong industry, the catering, tourism, film, transportation, education and training sectors have suffered the most, and the medical and medical, online gaming and other industries have benefited. As for the influence of micro individuals, private enterprises, small and micro enterprises, and migrant workers are more damaged.
On the one hand, we acknowledge that the epidemic has a huge impact on China’s economy, and we must all bear the downward pressure on the economy; on the other hand, we must soberly realize that the fundamentals of China’s economy will continue to grow. This is the basic judgment of the economy in the face of the epidemic. In this context, how should companies face it?
In different industries, enterprises will face different situations. I would like to give some ideas from the common parts for your reference.
01 Learn to live with uncertainty under epidemic conditions
Although the epidemic has been going on for some time, judging from the information transmitted, we are not ready to coexist with the uncertainty brought about by the epidemic. People always look forward to a clear professional judgment, a time node, and a clear solution. But in fact, the duration of the epidemic and the hedging strength of policies will bring uncertainty. Before January 30, we only thought that this was China ’s own thing, and after this day, it was a global public The event, and what kind of impact it will bring, is uncertain on a larger scale.
Uncertainties under the epidemic will continue to occur, so what we need is not only the courage to face it, but also the ability to recognize it and live with it. How do i do this? The core is changing yourself. That is, we need to start asking ourselves to accept the uncertainty of the epidemicIt has become a business background. We no longer carry out business activities in an original familiar business environment. We must understand the current situation with new methods and cognition.
I highly admire a famous quote from Marx: “The philosophers just interpret the world in different ways, and the problem is to change the world.” Perhaps it was deeply affected by it. When the crisis came, I began to emphasize the role of people and value Human subjective efforts emphasize the ability of the enterprise itself, not the constraints of the environment. Only in this way can we truly live with uncertainty and with the turbulent world.
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02 Strong confidence in self-development
The impact of the epidemic is indeed anxious and even a little discouraging. I know that operating a business is very difficult, but if the environment becomes a business condition, we need to face not only the environment, but also the adjustment of the enterprise itself.
I firmly believe that the development of the enterprise is the most important, and that the company’s self-growth must not be affected by the environment. When the global financial crisis came in 2008, I wrote a book called “Winter’s Deeds”. At the beginning, I wrote: Growth is an idea, and it guides their actions with this idea.
I do research on leading companies myself. In research on companies with a history of more than 100 years, I found that the leaders of these companies and the companies they lead may be in a benign environment, or they may be in crisis. Environment; may be in a high-growth area, or it may be in an industry where growth has stalled. However, these leaders and the companies they lead have achieved unparalleled growth through their own hard work. Year after year, no matter whether the economy is in a boom or recession period, maintaining growth is their firmness. Shifting faith.
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03 Evolutionary responses instead of predictive judgments
In the past few days, friends from the business community have come to WeChat to ask me how to treat the impact of the epidemic on the economy? How to judge and understand experts’ judgment on the development of the epidemic? Whenever I get this kind of question, I also ask myself, we strive to get answersI am looking forward to making a choice under clear judgment, but I know that everyone ’s answer will be different, and it is impossible to give a clear answer, because it is the answer itself that cannot give a clear answer.
In a continuously changing environment, no one can predict and make judgments and choices through prediction. In this case, the correct way is to adjust yourself again and again in a specific direction. Preparation, and strive to continuously verify and change as we move forward to adapt to changing realities. In too many uncertain markets, continuous and flexible adaptation is the ability you have to master.
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The evolving promise is also a version from an ancient military strategy. Carl Von Clausewitz wrote in his famous book “On War”: “War is full of uncertainty, and three-quarters of its actions are more or less uncertain. “In his view, a prudent war strategy is to target the enemy ’s situation and build an army accordingly, and in a specific direction, constantly adjust to changes in order to increase the probability of success.
The Spring Festival holiday is extended, and how to respond to the epidemic situation after resumption of work requires dynamic responses from companies. Many companies have adopted flexible and effective work methods. Some companies have started online work models, and some companies have employees learn in virtual groups. I think, If these enterprises make the best use of this special working time, they may bring about different effects of capacity improvement.
04 Challenging to reduce costs in an extreme way
In 2019, for many companies, there have been efforts to self-adjust development models, transform business and growth methods, but with today ’s epidemic, we need to have a stronger sense of crisis , More firmly carry out the journey of self-salvation, reduce costs, divest bad businesses, eliminate losses and growth without quality, ensure cash flow, and ensure competitiveness, and the key to achieving this is to challenge the extreme lower the cost.
How to make the company have real cost capability, and how to make cost is an input to customer value, not a value sacrifice. It has been repeatedly emphasized in my past courses and research. You can find it. But this time, I emphasized the challenge of reducing costs to the extreme, especially for small and medium-sized enterprises, whose fundamental purpose is only one, and that is to expect SMEs to maintain cash flow.
And for those with good performanceAs far as Golden Flow companies are concerned, I still recommend restructuring their cost capabilities, because dealing with uncertainty is a normal capability. But at the same time, I also hope that capable companies can quickly focus on how to do “subtraction” and “addition”, that is, how to focus on real customer value and create customer value.
Of course in a crisis, you still need very clear direction judgment, sufficient courage and ability to resist risks, and rational decision-making. What we need to acknowledge is that if we can find a clear direction and increase investment in the crisis, the subsequent growth will be immeasurable. In times of crisis, addition and subtraction to the business structure are made, so that the company has a more effective dynamic ability to deal with uncertain business. Once the opportunity comes, this more reasonable business structure will allow the company to have the opportunity to pull with other companies Open distance.
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05 What is uncertain is the environment, what is determined is myself
At the time of writing this article, the epidemic situation is still changing. People already know the pressure in the first quarter and are beginning to prepare for the impact in the second quarter. People began to pay attention to the pressure brought by the resumption of the Spring Festival, and how to resume normal work after preparing to resume the work. People not only adhere to the bottom line thinking, actively participate in prevention and control, but also start to prepare to resume daily life. While people rationally face the epidemic and do a good job of themselves, they are also expecting the government to come up with effective policies to help Wuhan, help the people, and help companies weather the crisis.
The epidemic situation is really too sudden, the impact is too great, and the dissemination of information and the authenticity of it are difficult to discern, which leads to a lot of complexity. All this really makes us feel distressed and uneasy. We are constantly facing all this. At the same time, we must soberly tell ourselves that what is uncertain is the environment and what is certain is ourselves.
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In fact, life encounters are not determined by the environment, but by the moment of thinking. Therefore, determination and uncertainty are, in my opinion, an organic combination. The determination is in our own hands, the uncertainty is in the environment. If we put the determination and the uncertaintyMake sure the two are combined. I believe this uncertainty will be your opportunity and the source of your true growth.
06 Concluding Remarks
I would like to use the six words of Wuhan from Academician Wen Yumei as concluding remarks: science, participation, and trust. She said: Science needs calmness and research. Participation is everyone’s participation, mass participation, and participation is first and foremost. Trust means trusting yourself, medical staff, and the country.