Risk experts agree that post lockdown and post Covid-19 we will all need to embrace the new normal to succeed and survive this pandemic – in business, as an economy and in our personal sphere of influence.
But what that new normal will look like is not clear. While some experts feel that we will not be able to go back to what pre-globalisation looked like, they do agree that the current status quo of regular international travel, face-to-face meetings and people-dense open plan offices will need to change.
Risk managers and compliance officers are hard at work, monitoring the news outlets and financial markets, assessing their competitors and international counterparts for best practice and the way forward. The Institute of Risk Management of South Africa (IRMSA) COVID-19 Think Tank, sponsored by LexisNexis South Africa, brought experts from various risk backgrounds together to talk about what the future will look like, what business and legislators still need to consider and what level of risk could be on the horizon.
“Globalisation is what has led us to this pandemic, with international travel and exposure resulting in the rapid spread of Covid-19 across nations,” says Claude Baissac of Eunomix. “This pandemic is a perfect example of the Lorenz’ ‘Butterfly effect’. One incident, in one market, led to an epidemic of catastrophic proportions worldwide.”
The term ‘butterfly effect’ was coined by meteorologist Edward Lorenz who discovered that tiny, butterfly-scale changes could result in major changes to his weather models – with no way to predict what the outcome would be. Baissac doesn’t feel that we can walk back the process of globalisation but agrees that things will need to change.
The question is, then, what will the new normal look like?
“We cannot just think of this pandemic, our lockdown and the way life has had to change, as a short-term disruption before we all go back to normal,” says Graeme Codrington of Tomorrow Today Global. “Many people will get a taste for working from home – where before management said it was not possible, it would not work – they have now been forced to accept the situation and are seeing that in fact, employees can manage many of their day-to-day tasks remotely.”
Business executives are now reliant on internet technologies to network with customers, suppliers and employees on local soil as well as across seas. The freedom and ability to travel internationally disappeared overnight, and while it is not business as normal, business for many industries is still going ahead and businesses have had to adapt – or die.
Dr Dana Gampel, in her presentation, “Strategising for a Post-COVID-19 Reality” put it all into perspective. “What we do know is that economies have been fundamentally disrupted and what we thought were essentials are no longer that important – including ratings agencies, consumption and the value of industries. Even cash – in what is now becoming a cashless economy. The new normal will include micro and shared economies. Community and smaller types of supply chains will pop-up, requiring deregulation – communities will define that rather than big business or big government. Regional supply chains across Africa will also open up and the African Continental Free Trade agreement will be of benefit to these. We will see increasing customer adaptiveness and business will need to see customers as partners and not just payers.”
Gampel says the new normal will see increased efficiencies but may also result in increased reliance on the state, which could drive a further economic crash. The new normal will also give rise to a cashless economy, with many more people working and schooling from home, seeing that it is now possible to avoid paying high school fees. Baissac says there will be a need for new tools and platforms – for learning, recruitment and talent management. This will extend to the development of new policies to manage employee KPIs, UIF, culture and wellness as well as management style and performance.
“Upper level management and executives will need to take the role of governance, risk and compliance teams very seriously during this time and in the months ahead,” says Greg Brown, Divisional Director: Legal and Compliance, LexisNexis South Africa. “From IT connectivity, cyber-security risks, business continuity management strategies to mitigating the effects of remote working, the loss of income and job losses, risk managers will not only need to guide their organisations through the current lockdown, but also work to predict future scenarios and what the new normal could look like.”
“Adaptation and diversification are now fundamental,” Gampel says. “We need to ask very deeply – what parts of business, in light of the changes and opportunities, do you have to protect? And, how risk competitive are you actually?”