It’s been almost three months since the reported cases of Covid-19 in China. The virus has since spread worldwide, with the World Health Organisation finally declaring it a pandemic recently. The last recent pandemic — referring to a disease that’s spread significantly worldwide — was the outbreak of the H1N1 swine flu in 2009.
In response to this, the Young Presidents’s Organisation (YPO), a nonprofit organisation comprising over 29, 000 chief executives globally, has conducted a survey with over 2750 respondents across different industries to get a sense of the business impacts of the virus.
Businesses are taking a hit, with expectations that things are going to get worse
Travel, or a lack of ability to, is the most common negative business impact experienced by the chief executives surveyed, with an overwhelming majority (87%) already experiencing its effects, and a similar number (90%) expecting its effects in 6 months. Most countries have already set measures in place to restrict travel — Singapore and Hong Kong have imposed a 14-day self-quarantine; while places like Japan, Argentina, and India have outright bans on travellers from certain countries including the UK and China.
YPO member Nelson Loh, who’s the executive Chairman and Co-Founder of Novena Global Lifecare — an international healthcare group with over 2000 staff — shares about the situation: “We have had to reinvent the way we do business… We had to rethink shifting obsolete frontline staff to focus more on e-commerce sales and product/service delivery.Our medical professions will also be providing more online medical consultations.”
Consumers are understandably afraid to go out – do you have any advice for other CEOs and companies on steps they can take to assuage this fear?
I think is a serious matter not to be taken lightly. As much as every citizen should abide by what the government is implementing in terms of health safety measures such as social distancing and more disciplined personal hygiene habits, i think companies can step up in their communication to customers in terms of sanitization standards being implemented ; showcase how social distancing has been implemented in their premises and checks on visiting customers. Trust and reliability has been key factors driving brand value – Being responsible and transparent on efforts will still be a win on all fronts.
Meanwhile, besides travel, the top three affected areas noticed by business leaders are revenue (58%), new business development (62%), supply chain (58%) — with at least 15% more CEOs expecting things to get worse across the board in the coming 6 months. Revenue, though, is expected to stabalise in the foreseeable future, with 54% of CEOs interviewed predicting that its going to stay the same, or rise in a year’s time.
In a recent interview with the Business Times, Dr Martin Bem, Owner & MD of Singapore-based Ponte Group (which runs F&B concepts like Level33 and Erwin’s Gastrobar), shared that business was down 45% due to being in the CBD – where many people are working from home currently.
Negative impacts by region
The regions with the most CEOs negatively impacted by the virus are Asia (84%), South Asia (78%), Europe (70%), and the Middle East and North Africa (74%); while the least-affected regions seem to be the U.S (50%), Australia/New Zealand (52%), and Canada (45%). This result more or less correlates with the number of confirmed cases — with the exception of the U.S (over 14, 000) and South Asia (under 2000) at the time of writing.
Also according to the YPO report, China seems to be past its peak — numbers from the European Centre for Disease Prevention and Control shows that China’s confirmed cases seem to be stabalising — and CEOs from there appear to be more optimistic than their counterparts in countries where numbers are at their height.
Predictably, the largest number of CEOs (89%) negatively affected by the virus come from the hospitality and travel industries; while retail and wholesale (61%) comes next. Despite this, 10% sector-specific retail and wholesale leaders; as well as those in the business of agriculture, factories, mines, and utilities are reporting a positive effect on revenue. The least affected is the construction industry (36% of leaders reported a negative effect).
Meanwhile, according to a report by the World Economic Forum, large scale events are taking major hits, with events being cancelled all over the world. Tech conferences alone, like SXSW and the Electronics Entertainment Expo, have sustained losses over US$1 billion (S$1.45 billion).
What are CEOs doing in response to Covid-19?
95% of leaders have already taken action – implementing steps like increasing communication with employees, implementing new health and safety measures, and cancelling events. Of these, the least-reported actions are stopping recruiting, and implementing remote working for all employees.
Many of these reflect the leadership advice given by survey respondents for other CEOs – which includes a call to over-communicate and make themselves available to employees; protecting employee well-being; and to work based on facts and not hearsay.
Read the full results of the YPO survey here.