Some Managing Directors of Swiss companies in the Czech Republic gathered on September, 16th 2020 at Laufen CZ to exchange views on topics around COVID-19. They were in particular requested to share their experiences and expectations based on two questions. The main findings are reported here after below each question.
A) Lessons learned from COVID-19; what are my intakes?
PROTECT THE CASH
The previous crises taught companies the importance of high liquidity: the availability of liquid funds was a priority for many companies when the crisis broke out. An effective cost management / optimization of processes (including stock management) were among the key aspects in this regard.
SECURE THE BUSINESS
The identification of critical process/units, putting in place operational backup, reassessing warehouse and secure supply chains were crucial tasks.
PUTTING PEOPLE IN FOCUS
Protection and safety of people were a high priority. Maintaining ties with the personal in home office and customers was key (including monitoring their needs).
(FORCE) DIGITALIZATION IS A PLUS
The use of digitalization became necessary, even for activities that were not supposed to go digital. Enhancement use of digitalization (online sales, online signatures, online services, online trainings, etc…).
DARK SIDE OF JUST-IN-TIME PRODUCTION
The just-in-time production strategy based on global supply chains showed its weaknesses.
Home office: Pros / Cons
Pros: Less space requirements, flexible working time, parallel childcare, cost and time savings.
Cons: Less interaction, limited experiences in leading by example/co-workers behavior, inappropriate private environment, irregular lifestyle.
For some employees, unsupervised work led to a reduction in efficiency or to social problems (alcoholism, domestic violence).
The enhanced digitalization underlines the importance to ensure adequate IT-skills to the employees
B) Expectations by December 2020:
Where will the global/CZ economy be?
All companies expect the economic situation to deteriorate (year by year), but not all agree on the severity of the downturn, even though the expectations are better in September as they were in April 2020.
China is recording a significant growth; in Europe a will to go back to normality prevails. The economy, in some countries or sectors, isn’t where it was before the COVID-19 crises. However, there is an improvement.
On the other hand, the auto industry is and will be particularly affected which could lead to diminishing the Czech purchasing power due to its important number of employees. A decreased purchasing power would then affect all sectors of the economy. At the same time, other sectors are showing growth.
The expectations are dominated by a purposeful optimistic attitude and an economic recovery was expected by Spring 2022.
Nevertheless, a critical analysis with regard to the global political situation was expressed (US elections, Belarus, trade war between the USA and China, disagreements in the EU). The COVID19 crisis paired up with other disputes could even lead to a major economic problem. On top of that, a collapse of the tourism industry cannot be excluded with dramatic consequences in regions of the world that depend on it and for industries directly connected with it. This sector is already suffering severe consequences due to the COVID-19 pandemic.
Many companies are currently reluctant to invest and are waiting with their large investments. The car industry postponed all investments for six months. The solvency of companies in the hotel industry is uncertain at the moment.
To conclude, a remark of a participant:
“BE PREPARED FOR THE UNEXPECTED!”