Navigating the COVID-19 Lockdown

Context of the Discussion

COVID-19 has now engulfed the entire globe. Apart from being a humanitarian crisis, it is now turning into an economic disaster. Governments are taking adequate measures to contain the spread. Organizations on the other hand are also playing their part in battling this invisible adversary. We are faced with an unprecedented situation never seen before. Navigating through this crisis calls for resolute measures.

EMA Partners organized an e-panel discussion by bringing together a power packed set of CEOs from the retail & consumer sector to understand their perspective on the emerging situation and the measures taken by them from a business and people perspective in navigating through this situation.

The panelists included Kavindra Mishra, Managing Director & CEO, House of Anita Dongre Limited; Vineet Gautam, CEO, Bestseller India; Rajiv Nair, Group CEO, Kaya Limited; Sumit Dhingra, Managing Director, India, Sri Lanka and Nepal, Crocs and A Ramachandran, Managing Partner UAE & Senior Partner India, EMA Partners. The discussion was moderated by Utpal Das, Client Director and Practice Lead, Consumer & Retail, EMA Partners. This paper is a curated account of the discussion

Business Perspective

There was a consensus across the table when it came to the extent of impact the lockdown has had on businesses. It came out clearly that the business environment in its present state is worrisome; yet there are rays of hope. The panel discussed the impact of halting long-planned production cycles and shutting of retail stores and services and the resultant repercussions on cash flows.

Rajiv Nair of Kaya commented that like any other business, they are faced with a difficult situation and are grappling with it. However, they continue to work in the background to ensure preparedness once the worst is over. Sumit Dhingra of Crocs said that they adopted a preemptive strategy and took adequate measures to safeguard their business in the given situation and ensure continuity once the market opens up again.

Due to their large presence in China, Vineet Gautam of Bestseller explained that there were already plenty of lessons for them to keep in mind before the COVID-19 wave had hit India. Also, thanks to a robust technology infrastructure, people are still able to work from home and manage the bare necessities required for running the business.

Mitigating the Situation

Sumit Dhingra rightly pointed out that no organization ever prepares for a “zero revenue” scenario which is exactly what the circumstances are currently and these are extraordinary times.

Kavindra Mishra of House of Anita Dongre was emphatic in stating that “cash is king. It is the number one business imperative, especially in this situation.” Everybody else on the panel agreed and echoed the importance of conserving cash, stretching the dollar and how critical it will be in the near to long term well-being of the business.

People Perspective

Although capital conservation is a huge priority, keeping the employee morale high is also extremely important. Ramachandran of EMA Partners pointed out that “across organizations and sectors, the challenges are not very different. Employee engagement has become more critical than ever because it will have an impact on their physical and mental well-being.” A very potent statement which he made was “When will the cost of lockdown supersede the cost of infection?”

Sumit Dhingra eloquently articulated that “Leaders should be humans first”. Vineet Gautam emphasized the importance of “constant communication, organizing town-halls, huddles and small group communication initiatives.”

When it comes to keeping the external stakeholders motivated, Rajiv Nair of Kaya mentioned that his company’s supply chain team has been extremely proactive and there has been constant communication, especially around the capacities and difficulties in distribution that their partners are facing at this point in time. They have increased their engagement with industry bodies and stakeholders.

Kavindra Mishra of House of Anita Dongre mentioned that apart from employees, they are also taking care of people who are involved with them, either directly or indirectly, like the artisans that work with them. They have instituted a dedicated fund to support such stakeholders.

Future Perspective

Discussing what the future holds for us post the COVID-19 phase, Rajiv of Kaya commented on a very important aspect and said that “data privacy is underestimated in India but very important for companies to invest in and practice. Although the current situation might not be an enabler for digital transformation it is certainly a catalyst for companies to fast track their digital journey.”

Vineet of Bestseller spoke of rebooting and reprioritizing strategies and a lot will depend on the strength of the business and brand. Stronger partnerships must be forged across the value chain.

Sumit Dhingra opined that they are looking at this as a temporary loss of momentum and at the moment are not going to alter their long-term goals and strategy.

When asked if smaller and niche businesses will suffer more than the bigger ones, Ramachandran of EMA Partners said that it is not the case. Companies that are over leveraged will face a difficult situation. In general, most businesses will face short term pressures because of complete erosion of their cash-flows.

Kavindra Mishra of House of Anita Dongre summarized by saying that we have to reflect and introspect by keeping the customer at the core of all decision making. Paper EBITDA will become secondary, cash flows will become primary.

Conclusion

Overall, there was a sense of optimism in the discussion amidst all the revenue hits that companies have taken. Biggest priorities are cash and people. Conserving capital, cost optimisation and keeping people (employees and business partners) meaningfully engaged and motivated should be at the top of every leader’s mind. Lastly, there was a consensus that business will take anywhere between 12-18 months to witness a recovery.

Disclaimer

The views expressed in this white paper and attributed to the participants are the personal views of the participants and do not, in any way whatsoever, represent the official position of their respective organizations.

This white paper and its contents have been prepared by EMA Partners for informational and discussion purposes only, and for limited circulation. The information contained in this white paper should not be construed as enjoying either tacit or explicit endorsement by EMA Partners.

EMA Partners International Ltd and associated legal entities and member firms in respective geographies are equal opportunity employers and do not exercise or support any form of discrimination during the process of interviewing, assessing, hiring or selecting candidates, either for employment with any of its clients or for themselves.