CEOs Discussion on “Act Now, Plan Now to Retool for the future”
Four months ago, nobody would have thought that the whole world would come to a standstill. The infamous coronavirus has spread across the globe like wildfire in a short period.
The virus has not only infected people across 188 countries, but has had a drastic impact on various industries, share markets, corporates and even on one’s daily life. COVID-19 has impacted global health, global supply chain and above all the global economy.
For business leaders, the COVID-19 pandemic has accelerated unprecedented change. More than ever, the health of businesses is urgently and visibly linked with the health of workforces, the health of our society, and the health of our planet. Previously unimaginable shifts in our daily lives are compelling companies to adapt quickly and identify creative, unconventional ways to operate and survive. Worldwide uncertainty makes it more difficult for leaders to find their footing—and those who like to operate from a place of clarity are finding few ports in this global storm.
With so many unforeseen factors colliding at once, it is quite a challenge for CEOs to chart a clear way forward. The question most leaders are facing, then, is: How do we move forward in such uniquely uncertain circumstances?
In this context, VDMA India organized a virtual CEOs Discussion on “Act Now, Plan Now to Retool for the future” on Friday, 3rd July 2020, in association with our esteemed Bain & Company, as Knowledge Partner.
The webinar started with a welcome address from Mr. Rajesh Nath, Managing Director, VDMA India. Mr. Nath welcomed the panelists and highlighted the significance of the webinar. He said that this CEO Panel Discussion – Act Now, Plan Now to Retool for the Future is an endeavor to help leaders drive business effectively during major disruptions.
The welcome address was followed by a poll conducted from the audience. The audience was asked about the areas to put more focus on, to improve the functioning in the post Covid19 pandemic era, to which a majority voted for increasing demand by focusing on customers and markets.
This was followed by an interesting presentation from Mr. Amit Sinha- Senior Partner & Director, Bain & Company, on Act Now, Plan Now to Retool for the future, which set the theme of the webinar. Mr. Sinha said that at the time of the financial crisis of 2008, the world GDP contracted by 0.1% between 2008 and 2009, which in the present scenario is estimated to contract by 4-5% vis-à-vis the 3% growth which was estimated. He added that the businesses will on an average will take 24 months to come out of the crisis.
Mr. Sinha mentioned that most companies and the CEOs have taken every step under “Act Now”, which helps to drive businesses effectively during major disruptions. These are initiatives like protecting employees and customers, cost reduction, liquidity and supply chain/ operational continuity. However the “Plan Now” steps like prediction, adaptability and resiliency are needed to be taken to build a robust foundation for businesses. Further he added, more efficient and flexible new operating models and multiple potential levers can be considered to “Retool” in planning for the new normal.
The presentation was followed by an insightful panel discussion. The panelists in the discussion were Mr. Amit Sinha- Senior Partner & Director, Bain & Company; Mr. Dattatari Salagame – Managing Director; Robert Bosch Engineering & Business Solutions; Mr. Vivek Bhatia – Managing Director & CEO, ThyssenKrupp Industries India and Mr. Ashutosh Vaidya- (till recent) Chief Delivery Officer, Tata Technologies. The discussion was moderated by Mr. Rajesh Nath, Managing Director, VDMA India.
The coronavirus pandemic is testing the leaders of companies and organizations in every sector around the world. Its consequences could last for longer and present greater difficulties than anyone anticipates. The prolonged uncertainty is all the more reason for CEOs to have a foresight and reinforce behaviors and values that can support their organizations and communities during this crisis, however long it continues, and prepare them well for the next large-scale challenge. Under this backdrop the panelists were asked how they are managing this downturn, what are their current and future priorities. Mr. Vivek Bhatia of Thyssenkrupp replied that considering the unprecedented scenario, during the initial phase of the lockdown they made sufficient efforts to keep the ball rolling. They were very quick to move to the WFH model and kept a tight control on cash. They tried to foresee how deep the damage can be and took initiative accordingly.
Thyssenkrupp reached to more than 2500 customers through training session and recently, despite of the crisis, they are successful in bagging an international order. Mr. Dattatari Salagame of Robert Bosch added that for them too there has been no major disruption and they have been doing good as compared to the previous year.
The panelists were next asked about the adoption of the new operating model, in view of different firms i.e. Services vs. Manufacturing. Mr. Ashutosh Vaidya of TATA Technologies mentioned that for manufacturing companies it is a product supply chain, while for services enterprises it is a people supply chain, so the operating models has to different. Like the concept of WFH, is much more possible in the services sector as compared to the manufacturing companies. Mr. Sinha added to this that there are a lot of changes to be seen in the corporate functions in the coming period. Infact companies are now considering doing away with the office spaces in view of the flexible working trend.
CEOs are considering how to retool their companies for a new world—one that will be highly unpredictable. It will be characterized by increased polarization, local market disruptions and heterogeneous government policies. Mr. Dattatari added here that in the new world volume based hiring will shift to niche hiring and automation will play an important role. He emphasized that the talent landscape with automation will drive the world.
Later Mr. Bhatia pointed out the importance of digitalization in the new world. He said that at Thyssenkrupp they are looking hard to do away with paper based and physical processes and move to digitalization. Since physical meeting with clients now are not possible physically, they have now moved to online meetings. They have also been identifying and helping suppliers facing challenges with liquidity.
WFH would become a key reality for certain industries. IT/ITeS companies announced that they will support 75% staff to work from home in next 5 years. In this context, Mr. Vaidya said in the current environment trust has become increasingly important for leaders and managers and the focus is now more on outcome of the people. As leaders, they also need to create bonding and ensure cultural alignment of their people. He emphasized on the point that those who want to work, can actually work from anywhere without any physical boundaries.
Lastly, with shifting variables used in data based decision-making models, the panelists were asked how can data algorithms solve key issues on early demand signals, inventory liquidation, supply chain, consumption patterns, distribution challenges or impact of migrant worker movement on demand. Mr. Bhatia here said that in an environment like this, data plays an important role to extend the line of sight and to increase the speed of reaction. Mr. Dattatari added that now technologies like contact less supply chain, thermal scanners, security solutions are needed which earlier had no role. For these technologies data definitely plays a critical role.
When asked about possibility of data capture in the unorganised sector as there the data is really haphazard, Mr. Vaidya said with the increased use of mobiles and small devices in the present time, a lot of light weight applications are now available to help in data capture and analysis for the small companies and the unorganised sector.
In the end, Mr. Nath concluded saying that the term VUCA (Volatile, Uncertain, Complex and Ambiguous) has hit us hard when we look at this crisis. Not only products, services and processes need to change, the companies have to change more fundamentally. Today’s business leaders need the ability to see through the chaos to have a clear vision for their organizations. As the captain knows how to navigate his ship through storm, the industry leaders must guide their company through choppy waters.
VDMA India extends a sincere thanks to the Panelist for the frank and open deliberations and sharing their rich experience and all the CEOs and participants who joined this interesting webinar.