McKinsey dives deep into how businesses can take precautions in the world of coronavirus.
Article by McKinsey & Company
COVID-19 is, first and foremost, a global humanitarian challenge. Thousands of health professionals are heroically battling the virus, putting their own lives at risk.
Governments and industry are working together to understand and address the challenge, support victims and their families and communities, and search for treatments and a vaccine.
Companies around the world need to act promptly. This document is meant to help senior leaders understand the COVID-19 situation and how it may unfold, and take steps to protect their employees, customers, supply chains, and financial results.
The situation now
At the time of writing, COVID-19 cases have exceeded 900,000 and are increasing quickly around the world, with concerns that a 15% hospitalization rate could drive hospital system overload.
To reduce growth in cases, governments have moved to stricter social distancing, with “shelter in place” orders in many areas in the U.S., Europe, India, and other countries. This has driven rapid demand declines—among the deepest in recent times—that are being met by attempts at bailouts.
Some Asian countries, e.g. China, have kept incremental cases low, and are restarting economies. So far, there is little evidence of a resurgence in infections.
How the situation may evolve
There is a limited window for governments to drive adequate public health responses and meet demand drawdowns with proportionate economic interventions. Without this, the possibility of a deeper effect on lives and livelihoods is more likely.
Scaled-up testing will soon clarify the extent and distribution of spread in the U.S. and Europe. Learnings from other countries and recent innovations (strict social distancing rules, drive through testing, off-the-shelf drugs that can address mild cases, telemedicine enabled home care) could provide the basis for a restart.
Actions that institutions can take
- Resolve. Address the immediate challenges that COVID-19 represents to the workforce, customers and partners.
- Resilience. Address near-term cash management challenges, and broader resiliency issues.
- Return. Create a detailed plan to return the business back to scale quickly.
- Reimagination. Reimagine the “next normal”—what a discontinuous shift looks like, and implications for how the institution should reinvent.
- Reform. Be clear about how the environment in your industry (regulations, role of government) could evolve.
Read the full McKinsey report here.