RESURGENT INDIA KNOWLEDGE SERIES PRESENTS
Webinar on “Life of Corporates after COVID-19
Speakers: Mr Samir Gupta, CMD- Jakson Group
Speakers: Mr Lalit Agarwal, CMD- V mart Retail Limited
Moderated by - Mr Jyoti Prakash Gadia, MD-Resurgent India Limited
⇒Conventional definitions of classifying companies into small, mid and corporate based on their size, profits and plant and machinery will now be replaced by modern definitions of how effectively they are using internet for connectivity, communication and reaching out to the customers. New classification will be namely as follows.
⇒ Offline- Rural business with no internet and old-school operations
⇒ Connected- Use internet for general information but no utilization for business activities. 30-35% of businesses may fall under this category
⇒ Enabled- Has internet set up, use connectivity for internal communication and understand customer data base.
⇒ Engaged- E-commerce businesses.
⇒ Old school management style based on decentralization will be transformed and new style of management will be followed by most of the companies. Direct flow of information and order from top management to executives with no interfering flab of middle level management.
⇒ Modern day need of customer for customization will take a charge over the concept of economies of scale.
⇒ The crisis has led to some important revelations for number of businesses and corporates and forcing them to re-evaluate importance of online presence, Disaster management, Work from home culture, Risk management strategies, Managing liquidity and cash flow, Technology adaptation.
⇒ Consequences of earlier crisis and recent ones are almost similar i.e. falling of stock markets by 30-35% but the challenges faced are very unusual. There was a gradual fall in the demand of commodities and capital markets in earlier crisis over the period of two years whereas there is steep decline in recent crisis just within 30 days’ time.
⇒ Never seen before, apocalyptic like situation. Lot of fear pandering which is giving rise to increasing insecurity, hostility and anger.
⇒ No amount of management class or disaster management class could have taught to tackle this crisis. Application of management tactics with agility is of more importance.
⇒ Non-grocery retail business highly impacted after aviation and hospitality industries.
⇒ Businesses survive on the ecosystem of values. It’s important to have clarity on what’s the ultimate objective of the business activity. Is it for larger interest, community or fulfill self-need?
⇒ Business models should be sustainable, focus to achieve long term goals rather than get distracted by greed or getting short term profits at cost of your values/principles. Demonstration of values in your business activities motivates people working with you to follow those ideas.
⇒ Although there will be many companies that might go out of business, this pandemic may have opened up array of conversations, carved a learning curve and unleashed myriad of opportunities.
⇒ Prudence is one of the core value to possess in retail business.
⇒ The organization culture is developed when your business processes, activities and related stake holders are all aligned to the purpose and core value of the entity. It’s then safe to say that the company is generating something of value to the society.
⇒ Effective communication between the stakeholders involves realization of the fact that everyone associated with the organization are one and working towards mutual benefit and are res. In terms of communication channels, we are very well equipped digitally. Great opportunity for the leaders of organization to practice effective communication with their employees,highlighting intention and drawing attention away from the pessimism.
⇒ Exercise openness, frankness and transparency. Do not pull curtains on bad news. Everyone at this moment is working towards mutual benefit. Increase engagement limits and take feedbacks. There is an incomplete communication if the opposite party fails to understand your objective. Communication can be translated through body language, in writing, facial expressions, etc.
⇒ Looking at china, even after their factories resuming, things are going at slow pace because of reduced global demand. India, might face similar issues especially MSMEs. People may be skeptical about burning cash.
⇒ Industries single-point agenda should be conserving resources which not only incudes cash but also power, water. Number of western countries are facing water crisis as a result of this virus. There are going to be salary- cuts or postponement of bonuses for white-collared jobs. It will take nothing short of 6 months to a year for things to return to normalcy.
⇒ Retail Businesses usually plan ahead and forecast their operation in advance. Right now that planning and forecast has come to a halt. Businesses should prepare their supply chain to act with agility as soon as this debacle starts to fade. Integrate all the ecosystem and have consistent communication with its suppliers to ensure that they are ready and also comfort them they are not financially deprived of that capability.
⇒ Transformation of manufacturing processes is not going to happen overnight but it’s going to change. There will be diversity in supply chain. Local sources will be in demand. There is going to be disruption in 3-D Printing.
⇒ Huge focus on lean manufacturing, lean offices, sustainability, minimize environmental damage. Global collaborations and partnership will be running at forefront.
⇒ Every crisis is opportunity in disguise. Climate change is positively impacted. Work from home culture and flexible hours will be new normal which will increase productivity in long term.
⇒ We are experiencing an era of cautious optimism. The investment plans for expansion, M&As of organization will take a pause and get delayed in short term but will not be cancelled and bounce back.
⇒ Investors in retail chain of businesses are for long term. Long term investors are not affected by external factors as long as they have faith in the strong internal system of operations for revival. The leader of the organization has to show investors the opportunities that can be built and display confidence. Investors have been more burned out by the situation in western countries due to pandemic than India.
⇒ People in business use to sit on high fixed cost and low variable cost. Because of the crisis we may see the inversion of the structure with low fixed cost and high variable cost.
⇒ Current situation will enable lot of leaders introspectively make robust changes in the organization’s operations, digital adaptation, updating creative side of the business, hone various capabilities which were overlooked due to time constraints which will strengthen company for future prospects.
⇒ Tech and IT sector will perform positively. Government will come out with lots of policies to promote component manufacturing. We are dependent on china for component manufacturing. Pharma sector is also one of the sectors that may see commendable growth. Lots of investment will be directed into pharma for R&D of vaccines, medication etc. Consumer durables will continue to grow. Agro-processing is also one of the areas that may witness substantial development and excellent opportunities.
⇒ Infrastructure like cement and steel will also behave positively due to continued interest of foreign investors to invest in Indian market, government will concentrate on development of infrastructure. FMCG, Retail- online and offline will also have bright future post COVID-19. Retail online presence has been growing but will tremendously grow even more because of cynicism revolving around physical shopping.
⇒ Consumer behavior for retail will be divided. Urban vs Rural and Tier 1 vs Tier2. People who are more aware and educated of the situation are dealing it with skepticism as compared to unorganized labor. People in smaller towns are assumed to be having stronger immunity against the fear and negativity.
⇒ Government should strive to bring down the cost of finance and make India globally competitive by this move. It should aim at fundamental renovation of broadly five things to get India to take advantage of this opportunity. It includes, cost of finance, infrastructure, skilling of labor and judiciary.
⇒ Reinventing and rediscovering multiple areas of the organization is what most companies are engaging in. Noting down areas of improvement, revamping and strengthening digital and IT domain of the company. Take deep dives retrospectively and shine light on past mistakes and strategizing for future developments.
►Watch the webinar on YouTube: https://bit.ly/2SH08GO