Chinese answer: how the PRC business acted during the epidemic

Covid-19 is spreading around the world, and it is difficult for companies to figure out how to react to it. With the unpredictable dynamics of the disease, in the absence of personal experience and clear instructions from state and international bodies, there can be no simple answer.

The situation is different everywhere, but we believe that companies have the opportunity to learn from the experience of those regions that had to respond to the epidemic a few weeks earlier. China, as shown by monitoring indirect indicators of the movement of people and goods, production and population confidence, is now apparently on the verge of economic recovery. Although things could reverse if a new wave of infections spread within the country, many Chinese companies have already moved from responding to the crisis to recovery and subsequent planning.

From our experience of assisting Chinese companies in setting up recovery plans, we have made 12 initial conclusions that may be applicable to companies around the world. Of course, China has its own political and administrative system and its social habits, but many of the lessons below seem to be suitable for widespread use.

1. Look forward and constantly redirect efforts

By definition, crises have very dynamic trajectories that require constant restructuring of mental models and plans. Ignorance is replaced by discoveries and understanding, then crisis planning and response to what is happening, after which comes the recovery strategy, the post-recovery strategy and, finally, reflection and learning lessons. The process must go quickly, and this means that the CEO must be at the head, otherwise you risk being stuck in difficult internal coordination and your reaction to changing circumstances is likely to be belated.

In China, some of the companies that have recovered faster than anyone have shown foresight and anticipated such changes. Even in the early stages of the spread of the virus, Master Kong, a leading manufacturer of instant noodles and drinks, daily assessed the dynamics of what was happening and regularly redistributed resources. She foresaw the accumulation of inventory by customers and empty shelves in stores and shifted focus from large retail sales channels to the O2O model (online offline), e-commerce, and small stores. Constantly monitoring plans to return to work facilities, she was able to very flexibly adapt her supply chain and restore it more than half in just a few weeks after the outbreak. In the same short time, Master Kong regained its sales: when it delivered its products to 60% of stores,

2. Use flexible field-based tactics

For a quick, coordinated response, management orders are needed. But in order to adapt to unpredictable changes, the dynamics of which vary locally, you need to give them the right to take the initiative. Some PRC companies have managed to balance two response approaches: directives from above and local innovations.

Huzzah, the operator of 6,000 hotels in 400 cities across China, has set up an anti-crisis working group that re-reviews policy procedures daily and issues new directions for the entire hotel chain. In addition, she used her internal information platform – an application called Huatong – to provide employees and franchisees with up-to-date information. This allowed franchises to adapt the instructions from the management to their local situation with the spread of the epidemic and measures taken by local health care.

3. Actively explain events to your employees, creating a sense of confidence.

During the crisis, it is difficult to achieve complete clarity, because the situation and available information about it are constantly changing, obeying the exponent of the spread of infection. Formal recommendations are often absent, contradictory, outdated or not very applicable for practical purposes. In addition, confusion can be exacerbated by the abundance of materials in the media, reflecting different points of view and containing different advice. Employees need to switch to new working methods, but they cannot do this unless they have clear and reliable information, as well as general guidance from the management.

Some Chinese companies have shown great foresight by instructing and supporting their employees. For example, Supor, the largest Chinese cookware manufacturer, has introduced very specific manufacturing instructions and procedures for its employees. In particular, he recommended precautions for eating in canteens and emergency plans. In addition, in the early stages of the epidemic, the company organized medical examinations for employees and their families and purchased everything necessary to prevent the spread of infection. She was well prepared for the operational resumption of work and opened some production lines in the second week of February.

Leave a Comment