How businesses and SMEs can overcome the Covid-19 business crisis ? By Mohamed BEN HAMED.
Around the world, the pandemic Covid-19 continues to produce a massive and sudden shock and plunge the economy of certain countries into a severe recession. The most affected countries are those where the epidemic has been most severe and which are characterized by a high dependence on tourism, exports and external financing. In this respect, the example of Tunisia is terrifying in many ways. In fact and since the cholera pandemic it suffered in the 19th century, Tunisia is probably facing, with the Covid-19 pandemic, the most critical health crisis in its history. The damage that this pandemic has caused during about 17 months is catastrophic: More than 16,000 deaths, saturation of hospitals, failure of the vaccination campaigns, extensive propagation of the pandemic, lack of vaccines, lack of human resources in hospitals and drop in the quality of the care of patients. In the same time, the country is confronting an unprecedented economic crisis of strong magnitude: Decrease of tourism, decline of export activities, decrease of external financing resources, paralysis of economic circuits, deterioration of business climate, contraction of industrial production, increase of unemployment, increase of poverty and explosion of social situation. While during this time, the Tunisian State is in the grip of an institutional crisis that has lasted for a decade already and prevents to undertake real economic and social reforms, managing efficiently the external loans allocated to the country, reducing unemployment, managing the Covid-19 pandemic and ensuring sufficient quantity of vaccines. As result, Tunisia is experiencing now a severe economic recession and its debt ratio is reaching 100 % of GDP. Hence the last reaction of I.M.F(New York,U.S.A): “…The loans allocated to Tunisia over the past ten years were used not to carry out important infrastructure projects and major works, to create jobs and to boost industrial production and exportation but to maintain the daily life of successive governments and to refloat the State coffers …”
In such context of total uncertainty, how companies and SMEs can tackle the Covid-19 business crisis? How they can overcome it? To answer these questions, first let us start by reshuffling the cards in order to identify some significant nuances about health and economic crisis, such as the following:
Every crisis is a time of learning and improvement and a vector of opportunities and releases new innovative forces and transformation. About this precisely, Gaston Dorren, a Dutch linguistic expert in Chinese language, said: “… In Chinese, the word crisis consists of two ideograms, one meaning danger and the other opportunity. The opportunity is that every disaster brings a change in culture and the world of management will not be spared”.
The health and economic crises shake up as much as they open up new fields to explore. Therefore, there is no shame or complex in learning from these events and using the possibilities and the opportunities they offer.
With the Covid-19 no company, no management team and no leader will be immune to the impact of this pandemic and many businesses and SMEs will risk weakening, cessation of activity or disappearing.
The current economic recession is the result of ten successive years of economic collapse and today bears the mark of a quadruple crisis: A health crisis for the seventeenth consecutive month, an institutional crisis at the State level, an economic crisis characterized by total or partial shutdown of economic sector activities and a social crisis fueled by unemployment, loss of purchasing power and increase of poverty.
If there is one condition to overcome the current economic recession, it is the success of private sector, companies and SMEs which are recognized as real economic engines and main providers of employment and economic growth.
With this in mind, let’s first review some relevant lessons highlighted by the health and economic crisis:
Organizational resilience: i.e. the capacity of any company or SME to use the consequences of a crisis to rebound, anticipate, react and move to a higher level of management and transformation.
Humility: While it has been terrorizing the world for several months, we still don’t know much about the Covid-19 virus and about its genome which is constantly muting. We must therefore change: Collectively learn the lessons of this ordeal that we are going through together. We must care for the hospital, repair the social, listen to nature, value the environment, reconnect with ethics and invent a more inclusive economy and democracy. We must also decide together what to throw away, keep, transform and change “… in a globalization that has produced decades of development, but also generate unsustainable financial, ecological and social imbalances”.
Uncertainty: The COVID-19 pandemic constitutes a true anomaly that automatically implies uncertainty. However, we will have to get used to this impredictability as we risk more, as well as climatic or demographic crises, with similar consequences. “We have to live with uncertainty” says Edgar Morin. Therefore, uncertainty must now be integrated into all decision-making.
Societal and economic responsibility of businesses: With the disruptions and difficulties caused by the Covid-19 pandemic and economic recession, social, economic and environmental considerations must be integrated into companies and SMEs’ development and communication strategies.
Finally, let’s highlight below some relevant opportunities offered by the health and the economic crisis which could be of the interest of businesses and SMEs:
Organizational mutation: The first opportunity highlighted by the health crisis is the organizational mutation in enterprises that is immediately reflected in the adoption of the teleworking, including web meeting, web video-conference, Home Office, e-management, nude management, etc. Despite the negative social representation and the distrust of it, the teleworking responds perfectly to employee appetence and contributes to increase productivity.
Emergence of new privileged sectors of activity: the second opportunity revealed by the Covid-19 pandemic is the emergence and the development of new privileged and growth-catalyzing sectors of activity such as digital, health, agri-food, bio, ecology and energy transition.
Change of the business world : With the health and economic crisis, the business world has changed and continues to change constantly under the pressure of new trends such as technological innovation, new technologies, digital transformation, valuation of environment, social impact, diversification of supply chains and business models based on markets and customers’ needs and expectations. All these trends are now contributing to providing a fantastic acceleration of increase of creativity, production, competitiveness and growth processes.
International presence: Finally, the health crisis and economic recession have highlighted that exporting and international business are today and beyond the life-lines for any company and SME that wants to rebound and expand its activities. Therefore an international presence would be for it a strategic lever and a determinant factor to support production, distribution channels and sales, reduce manufacturing costs and increase profitability.
To prepare the world after Covid-19 pandemic and economic crisis and to be the business leaders of tomorrow, the managers of companies and SMEs will have to capitalize on their experiences of the current health and the economic recession, adapt the structuring of their organizations, adapt the change of business world and its new trends, develop both practical and innovative solutions and set up business models focused primarily and above all on customer needs and expectations.
Mohamed BEN HAMED (Chairman of I.C.I Group,Tunisia).