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Coronavirus: The Pomegranate Guide to Interesting Times

March 10, 2020

Within minutes of the bell tolling to mark the opening of the NY Stock Exchange on Monday, stocks plunged, marking Wall Street’s worst day since the 2008 crash.

The nosedive almost immediately triggered the exchange’s circuit breaker – a rarely used failsafe, designed to suspend trading and prevent an all-out crash.

In the face of reduced oil demand from China, Russia had steadfastly maintained production and Saudi Arabia reacted angrily by cutting prices and upping output.

And the reason for reduced demand? A bronchial Chinese economy. A nation collectively laid low by the microscopic coronavirus and an abject lesson in how the interconnectedness of globalisation can leave us all feeling vulnerable.

The stock exchange may have been back up and running within 15 minutes, but the upset looks set to be one of many sneezes and coughs to come. A more prolonged 2008 style slump isn’t the only scenario for which prudent businesses should now prepare.

It’s coming home

Coronavirus has the potential to disrupt every stratum of organisations large and small. Now is the time to test preparedness and answer questions about how your business will cope in the face of school closures, cancelled trains and levels of sickness not seen since the last World Cup.

You’ll probably already have some idea how well equipped your organisation is to switch to home working if necessary. But when was the last time you tested laptop webcams and microphones, or renewed lapsed conferencing software subscriptions? Fix these before your workforce is self-isolated and trial a ‘work from home’ day to stress test before the going gets rough if you can.

You’ll also need to answer some pretty tough HR questions. Under what circumstances will you ask employees to self-isolate? What support will you give to the parents of children from closed schools? And what about those whose work can’t be carried out from home?

Staff will be looking to have these questions and many more answered well before the first case hits.

Surprise and demand

Manufacturers were the first to feel the commercial brunt of coronavirus, in the form of parts shortages from China, Korea, Italy and other affected areas. Around 78% of Shanghai companies said they lacked enough staff to keep production lines running, according to the American Chamber of commerce.

The difficulty obtaining parts from Korea has caused problems for manufacturers like JCB, who briefly implemented a short working week in anticipation of supply chain disruptions.

And companies could be exposed to supply chain risks of which they are unaware, from secondary and tertiary suppliers.

Production in China and Asia could be affected well into May 2020 and beyond. Given concerns about the environmental sustainability of importing, right now would seem an opportune moment for manufacturers to consider re-shoring more locally.

More to come?

Of course, coronavirus could well turn out to be a biological millennial virus – the dampest of doomsday squibs.

But let’s not forget that 2020 has already seen businesses across the UK scuppered by flooding. If the new decade has taught us anything, it is to expect the unexpected and always be prepared.

There’s an old Chinese curse: “May you live in interesting times.” In such times, it pays to have a backup plan (and a backup-backup plan.)

Researching alternative practices can highlight weaknesses in current ways of working and shore up confidence that you’re already doing things right. Who knows – it could even reveal better, smarter ways of doing business.

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