Deepening the Lessons of Crisis

I’m sure all of us are paying close attention to the evolving coronavirus (COVID-19) situation and thinking about how it has and will affect our families, organizations, and society.  It’s too soon to say whether this will be long-term disruptive crisis or eventually turn into “just” a more severe version of the flu.  In the meantime, fear of the unknown is driving decision-making – both good and bad.

I’ve seen my fair share of crises in my three decade career, which have made me more than a little conservative and perhaps a bit OCD about contingency planning.  Some were even coincidentally compounded, like when the sharp downturn in the telecom market in 2001 led me have to announce the closure of a major manufacturing facility… the day before 9/11.  I’ve tried to learn from those incidents, as I am from the current.  Lessons are being taught by the coronavirus outbreak, but it’s important to use them to analyze the broader perspective.  Some than I’m thinking about:

Don’t ignore simple solutions.  We can significantly protect ourselves and others by simply washing our hands correctly and by not touching our faces.  In what other situations do we have similarly simple solutions, often known but not reinforced by standard work and requirement, and instead choose to invest in expensive countermeasures?

Understand the vulnerabilities of your supply chains.  Many of us have often criticized Apple for a supply chain predominantly dependent on an overseas supplier, even as they receive awards for supposed manufacturing excellence.  The downside of Apple’s reliance on China has now become real.  Similarly, we are waking up to the potential issues of having a large percentage of critical pharmaceuticals manufactured in just two countries.  This isn’t to say that all supply chains must be short or have redundancy – just that potential issues and true cost must be analyzed and understood.

Continue to learn and improve.  The best organizations know to use down or slack time to improve knowledge and processes so they can better capitalize on the eventual upturn, especially if their competitors follow a more traditional route of trying to maintain margins by cutting those same programs.  In the case of the coronavirus, how do you do that if employees need to stay home or if groups are not a good idea?  Online, on-demand continuous improvement training like Gemba Academy offers is obviously one solution.

Standard work and contingency planning is critical.  What happens if a critical person, or an entire facility, is no longer available?  Do you have current standard work for each operation or activity to allow others, perhaps even cross training, to quickly step in?  What activities are critical at a day, week, or month level?

Disruption can be quick, and devastating.  I experienced this when telecom went from hyper-growth to hyper-decline in less than 12 months in 2001.  Although I’ve never understood why a few thousand people would want to cohabitate in a floating petri dish, obviously many do.  But what happens when an event like the coronavirus happens and bookings immediately drop by half as the cruise industry is experiencing right now?  A similar situation is happening with the airlines, and secondary and tertiary travel support industries.  Where are your vulnerabilities, and what would you do?

Optimize the value of brains.  The best organizations understand that the value of experience, knowledge, and creativity can be worth far more than what appears as a cost on the P&L, and therefore optimizing and supporting those brains has real value.  Many benefits, like flexible schedules and working from home, are being revisited thanks to the coronavirus.  Many organizations, like Trader Joe’s just today, are also revisiting the concept of limited sick time as that could incentivize people to come to work while still contagious.  Do your human resource policies support the larger vision and truly strengthen your organization?

What is “essential?”  I always raise an eyebrow when organizations decide to place limits on “non-essential” people, travel, or expenses.  What is that?  In the case of the coronavirus, many organizations are now banning “non-essential travel” – augmenting the disruption I discussed above.  Almost all organizations tend to become a bit loose with expenses when times are good, and then eventually reach a point, either slowly or suddenly in response to a crisis, where they decided it’s time to ratchet back.  If something is truly non-essential, it is probably a waste, so why is it happening in the first place?  What standard work and processes can be put into place so that the non-essential is always recognized and removed?

What is “valuable” beyond the customer?  I think about this differently than the “essential” above.  For example, conferences can be valuable from a sales or networking perspective.  But since they involve large groups of people, conferences and large events are being canceled in droves thanks to the coronavirus.  This is forcing organizations to think about whether those conferences truly have value, and for the ones that do to find new and innovative ways to create that value.  Smaller events?  Streaming conferences?  Online learning and networking?

There are many other effects of the coronavirus crisis that are worth reflecting on, such as the impact on air pollution and health policy just for starters.  What lessons can we learn, and what can we put into place so we can both mitigate and not have to learn the same lesson when the next crisis hits?

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