CRISIS MANAGEMENT
Lessons from disruption
Mahesh Wijewardene
The destruction caused by the pandemic and then the economic crisis disrupted ‘business as usual’ in Sri Lanka. During this period, the crisis management skills of organisations were severely tested.
Mahesh Wijewardene notes: “Key qualities were necessary to manage the unprecedented challenges witnessed over the last couple of years. Some of these included awareness and understanding of the senior management of the extent of the crisis; close collaboration; operating within core values; agility to adapt to emerging challenges; frequent communication with stakeholders; and the execution of business continuity plans.”
He explains that in a crisis, it is critical to communicate with all levels of an organisation to ensure a collaborative effort. In the event of disruption, there is some temptation to operate outside of core values but he believes that these values should serve as the true north for companies at such a time.
Responding with agility and in a responsible manner to execute a smart plan is also vital. “Moreover, senior management must demonstrate a willingness to quickly adjust and execute a short-term plan if needed without prolonging deliberations,” he declares.
In these situations, most organisations look to empower people by delegating responsibility.
From Wijewardene’s perspective, it is critical for every employee to contribute something extra during a crisis as a mere ‘business as usual’ approach will not work in high pressure situations.
“Putting on a brave face is also very important for leaders during a crisis because it offers hope to others. Without going into a fatalistic or conservative mode, businesses can be proactive in industry forums to lobby as needed with regulators,” he explains.
Furthermore, companies with business continuity plans were prepared to a certain extent to deal with the challenges better than those that didn’t have them.
During such a crisis, maintaining data security is critical. Updating the risk profiles of companies is also vital to prepare for unforeseen situations and mitigate disruption to a great extent, Wijewardene cautions.
Determined to look on the bright side, he says: “I don’t think any company was entirely ready for a pandemic. But it also brought about a new dimension in the economy; and in social, economic and business risk management. The digital adoption seen during the pandemic as well as the economic crisis was unimaginable, which was a positive outcome of the situation.”
“In any crisis situation, working capital and cash flow management are seen as two of the biggest challenges,” he states, pointing out that “many companies realised the importance of cash flow planning only when the crisis hit them.”
Wijewardene continues: “A prudent and experienced management team will make cash flow management its primary focus even before a crisis unfolds and be willing to change priorities as required – for instance, shifting focus from selling to recoveries.”
Commenting on Sri Lanka as a country having experienced the worst of the crisis, he warns that the business community needs to be prepared going forward – because if another crisis were to hit us going forward, given the weak economy, it would be difficult to recover.
“We need to build a stable and sustainable economy to withstand future challenges or else the smallest disruption could be risky. So we need political will and collaboration to make this happen, coupled with long-term, steady economic policies and action,” he states.
In his concluding remarks, Wijewardene notes that the pandemic taught companies to review and improve their business models; consider short and long-term priorities; restructure business models to be leaner, reduce cost and consumption patterns; and enable and adapt to digitalisation.
