Today many major economies — including India, the US, and some of the biggest markets in Europe — are still battling to control their COVID-19 outbreaks. Daily death tolls remain high, and strict lockdown measures are still in place. Nevertheless, governments are beginning to develop strategies for easing lockdown restrictions and rebooting their economies.
In contrast with much of the world, China has emerged from the worst of its own crisis, despite being the first nation to be struck by the coronavirus. The city of Wuhan, where the virus was initially detected, is finally resurfacing after a ten-week lockdown. People are returning to work, businesses are starting to reopen, and controls on outbound travel have been lifted.
By virtue of working in the first country to go through a lockdown, China’s business leaders can offer some important insights into what life is like after a lockdown is relaxed. In a recent videoconference hosted by CIMA, eight Chinese business leader members shared their perspectives on what other markets can expect. Encouragingly, they had four positive takeaways:
- The recovery is happening much faster than many analysts and economists predicted. The CFO of an international beverages company highlighted that consumer confidence is returning to the Chinese market, which should reassure other countries that a return to normal circumstances could happen sooner rather than later. Many businesses are seeing a significant recovery in their revenues, and some have even benefited from the crisis. Nevertheless, China’s progress will inevitably be affected by the situation elsewhere in the world.
- Customer behaviours and expectations are changing, which creates new opportunities. In the past, customers may have expected face-to-face contact with suppliers of certain services. Now they are more open to online products and services and more willing to conduct business using virtual means such as videoconferencing. One leader who runs his own consultancy business explained that, in the past, his staff used to travel a lot to meet customers. By holding virtual meetings, the company has been able to cut costs as it is now spending less on flights and hotels. Importantly, as a result of the crisis, it has developed new offerings, which are growing the company’s revenues.
- Business can take advantage of the lockdown to reskill employees. When businesses emerge from the other side of the COVID-19 crisis, they will find that the world has changed significantly. In particular, the large-scale shift to home working will put pressure on organisations to accelerate their digital transformation processes and use technological tools to operate more efficiently. A venture capitalist pointed out that the lockdown can be a good time to invest in employees’ learning and development. As well as enabling them to pause and reflect, training can be a means of equipping them with the skills they need to thrive in a more digitalised future.
- The lockdown is a chance to rethink strategy. Often businesses are so caught up in the here and now, and with reacting to current events, that they struggle to develop robust strategies for the future. A hotelier within the wellness industry emphasised that the lockdown can be a time for stimulating innovation and developing new ideas. Are there opportunities to repivot the business and develop new revenue streams that help to diversify its income in the future? In the case of the hotelier, his organisation moved its learning programmes and wellness retreat assessments online.
The Chinese business leaders painted a hopeful picture of what life could look like on the other side of a lockdown. But they were also honest about the challenges they faced, including in areas such as cash flow, budgeting, investment, and helping their businesses meet targets. Their insights show that while navigating the crisis will not be easy for business leaders, they will eventually get through it — while their organisations may even be more resilient and profitable than they were before.
For more news and reporting on the coronavirus and how management accountants can handle challenges related to the pandemic, visit FM’s coronavirus resources page.
— Andrew Harding, FCMA, CGMA, is chief executive–Management Accounting, and Vicky Li, FCMA, CGMA, is regional vice-president–North Asia, both at the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Oliver Rowe, an FM magazine senior editor, at Oliver.Rowe@aicpa-cima.com.