COVID-19 has done little to shake long-term visions of CEOs in South-east Asia: Report
South-east Asia-based business leaders say that Covid-19 has accelerated existing plans as well as challenged and realigned many long-held assumptions and business practices. One of the biggest questions business leaders have had to address is what pandemic induced shifts are short term as opposed to long term in nature.
- CEOs agree that not having all the answers be viewed not as a sign of weakness but rather an opportunity to increase communication and draw on the perspectives of key stakeholders, basically adopting a philosophy of “we will figure this out together.”
- Work done before the pandemic- from digitalisation to new product development -and aligned to pre-existing trends is gaining traction and paying dividends
- While there is a heightened level of uncertainty, maintaining a medium-to-long term view and backing it with the appropriate action and resource allocation will separate those organizations that emerge stronger from the Covid storm from those that do not.
The view from the bridge: leading companies through the pandemic and beyond, a new report released by The Economist Corporate Network explores how South-east Asia-based executives are interpreting and responding to the short-, medium- and long-term implications of the Covid-19 pandemic for their organisations. The paper, sponsored by Accenture, is based on focus group discussions and one-on-one interviews with executives responsible for a broad range of organisations operating in the Asia Pacific region.
Covid-19 has etched an indelible mark on the year. For many business leaders the pandemic has presented the sternest challenge of their career. But as Anthony Couse, CEO for Asia Pacific operations of JLL, a commercial real estate management company, indicates “It’s in a crisis that your credentials as a CEO are truly challenged. Anyone can lead in a rising market, you get all the praise you like, but now is where you’re really being tested.” Mr Couse and a number of South-east Asia-based commercial leaders were interviewed and their insights captured in the report, which sheds light on the ways regional business leaders have contended with uncertainty ushered in by a once-in-a-century pandemic.
China was the epicentre of the outbreak. However, given how closely integrated the world’s second largest economy is with South-east Asia from tourism to supply chains, ASEAN-based business leaders were among the first to contend with the commercial and social fallouts of the pandemic. “Clearly we are not out of the woods with the virus. Notwithstanding, ASEAN-based executives have valuable perspective to share on lessons learned and actions taken to position their organisations for success during and post the pandemic,” says Herman Warren, director at The Economist Corporate Network.
One message is clear: a one-size-fits-all approach doesn’t work. Signify, a lighting business, saw its India-based sales dry up and then restart with demand shifting from urban centres to rural villages as lockdown restrictions led to a large number of workers returning to their ancestral homes. The change impacted not only the required product mix but also Signify’s thinking on how to realign their urban centric distribution networks to meet rural demand. Importantly, the organisation’s leadership is asking the question: is this a trend that will remain post-Covid or be more short term in nature?
Some organisations are not short of opportunities but are approaching new business cautiously. Shiv Seerapu, CEO Asia Pacific for Lloyds Bank, a British financial services institution, highlighted the challenge posed by this crisis is a tougher one: not so much if there are opportunities but how to respond to them. The issue is not whether there’s demand for a product but whether the customer has a viable business that could recover and could manage their loan commitments. “In that sense,” Mr Seerapu says, “this year has been transformational.”
“Businesses have sought to maintain and protect liquidity, and anxious consumers from America to Japan are worried about job security. However, the report highlights some counter intuitive areas of growth in business and consumer spend,” says Fabio Vacirca, market unit group lead at Accenture. Household savings, for example, are up substantially, and, in general, spending on essentials such as food has taken priority. A visit, for example, to the dentist for cosmetic reasons might be a category of spend that consumers reasonably postpone. However, Align Technology, a medical device company, saw a surge in demand. Julie Tay, senior vice president for Asia Pacific of Align Technology, indicates people were using money that otherwise would have been spent on travel or eating out to have their teeth done. “They spend a lot more time on Zoom, and they’re getting a good look at their smile and how they look,” says Ms Tay.
The executives interviewed indicated there were times they really didn’t know what to do or what impact the pandemic would have on their businesses. “I didn’t have all the answers and neither did the management team. It was very critical to be transparent. We appeared vulnerable but when I look at it, in hindsight, that vulnerability is a sign of strength because people realised, ‘we don’t have the answers, we need to find our way through this ourselves together’,” says Mahesh Iyer, CEO Market Group Growth Markets at Signify.
Even when the way forward was clear, getting the right balance of short-term agility and keeping an eye on the long term is vital to a CEO. Covid-19 has just demanded a sharper edge to the skill. “In Covid, you have to be nimble, because things are changing so quickly,” says Mr Couse, who likens the process to solving a jigsaw puzzle, where all the short-term pieces have got to add together to make the long-term strategy.
This latest report from The Economist Corporate Network is worthwhile reading for business leaders navigating hard and soft pandemic-associated issues.