by: Bassam Jabry & Geert van Kuijk
In the aftermath of SARS in 2003, SMEs were encouraged to adopt Business Continuity measures – yet many didn’t. We identify why this happened and what businesses can do to deal with today’s unprecedented crisis.
In the surreal calm witnessed in the empty streets of cities all over the world due to lockdowns, the change is paradoxically happening at breakneck speed. The stoppages generate a knock-on effect, creating in their wake a cascading ‘pile-up’ caused by the ever accelerating nature of commerce that globalisation has fuelled over the last few decades.
In the context of our developed world, this is most acutely felt in the small and medium enterprises (SMEs) that represent about 90% of businesses and more than 50% of employment worldwide. In addition, there is the recent emergence of the gig economy. Many gig-workers for the likes of Uber, Lyft, Postmates, and Instacart, among others, now find themselves left in a vacuum, where they are not entitled to workers’ compensation, healthcare benefits, or sick pay. Uber drivers – considered sole proprietors – alone number around 3.9 million worldwide.
So how prepared are businesses, particularly SMEs, for a global pandemic with the magnitude and speed of COVID-19?
This question was triggered by a project we carried out some years back in the aftermath of the SARS virus. Chemistry was asked to help develop a strategic communications platform for Singapore’s National Business Continuity Management (BCM) Programme spearheaded by the Singapore Business Federation (SBF) . The Singapore government wanted SMEs to be better prepared for calamities, and urged business owners to adopt a BCM certification.
But in the years that followed, hardly any of the smaller firms pursued BCM certification. In an effort to find out what held them back, the SBF asked us to run a survey to investigate.
‘No, Thank You’
The research revealed that the idea of preparing for disasters simply was not on the minds of entrepreneurs and small business owners. Their perceptions and attitudes towards attaining a BCM certification were as brief as they were blunt:
- Not for me: BCM is for bigger corporations or specific industries like energy, banking or IT
- Not to me: Hard to imagine big disasters directly affecting their business
- Not now: A distraction from their ‘business as usual’
In the entrepreneur’s mind, survival and business continuity appear to have a more ‘here and now’ meaning. For many SMEs, business continuity means continuously managing cash flow and their available reserves.
According to a study by JPMorgan, on average, companies with fewer than 500 employees have less than a month of cash reserves. For small mom-and-pop type businesses, the financial horizon is as near as a couple of weeks’ worth of cash. As much as astute entrepreneurs know that it is important to tackle the ‘important but not urgent’ components of the business, daily challenges inevitably put it on the back burner.
Trudging forward in the face of adversity
Cleary, very little could have prepared anyone for something of this magnitude and scale of disruption.
We thus found ourselves asking the question: what if it’s not so much a matter of preparedness but rather of resilience that defines a small business’s survival? What if it is not so much a mindset of business continuity but one of business flexibility that defines a true entrepreneur? We see it happening around us. There are numerous examples of resilient business owners that refuse to be beaten by the bug.
None of us would have ever wished for this situation, but at no other time has our planet felt so small, interconnected, and bound by the same destiny that cuts across every sector, demographic, nation, and social stratosphere. That in itself is now enabling some exciting new possibilities.
It spans from seeing global competitors like Apple and Google now choosing to work together, to very small ground up initiatives helping their own communities. For example, an owner of several F&B outlets in a town in the Netherlands agreed with his staff that they will help out a local supermarket that has a shortage of hands.
Materialise, experts in 3D printing technology, open-sourced their design for a door handle attachment to avoid touching door handles and spreading the virus.
Co-working spaces like Startdock in Amsterdam and Rotterdam leveraged on the talent available from within their tenant community to ideate, build, and launch a coupon-based system called CollabNow in just over 2 weeks. The pool of freelancers, from creative writers and web designers, to digital marketers and video producers, came together to set up a platform where customers can pay for discounted relevant services in the form of coupons. These can be redeemed at a later date, thus providing immediate cash flow.
With the lockdowns extended in Europe, and Singapore entering its second week of movement restrictions, what can be done to repurpose talent and resources for businesses to remain operational?
For example, could there be a team up based on a profit-sharing model between a digital agency and a small retail store to boost their online presence?
Could an F&B outlet offer semi-prepared dishes for people to complete cooking meals at home, thus providing relief from cooking from scratch and reducing the strain on peak hour food deliveries?
Can we help rent unused tablets from restaurants due to the lockdown, and pass them to the elderly so volunteers and family members can connect with them remotely?
Our unique ability to cooperate in large numbers as a species has probably, in part, played a role that got us into this mess. However, if we augment this ability with some newfound impulse to think beyond the usual norms of business, it will also be the very thing that will help us find a way out.
The world might feel like it’s falling apart, but there has been no bigger imperative to come together and collaborate on doing business unusual.