Business as usual? Adapting to the new normal

November 27, 2020 6:00 AM

Business leaders are now prioritising management of supply chain risks, environment, social and corporate governance

Given the country’s position in the crusade against carbon emissions on the global turf, corporate India has always been a keen observer and even contributor to environmental reforms.Given the country’s position in the crusade against carbon emissions on the global turf, corporate India has always been a keen observer and even contributor to environmental reforms.

By Bhavik Damodar

The Covid-19 pandemic caught most businesses off guard, resulting in a dramatic shift in how business leaders in India assess potential risks. While ensuring short-term survival of their companies, they are also delving deeper into the impact of this crisis to realign strategies for long-term growth amid the changing risk landscape.

The vulnerability of global supply chains was exposed at the outset of the pandemic. For CEOs in India, digital disruption has always been a major threat, and the supply-chain risks have only doubled their challenges. Findings of the KPMG in India 2020 CEO Outlook: Covid-19 Special Edition show a five-fold rise in the number of CEOs highlighting supply chain as a critical risk right at the start of the crisis. Like their global counterparts, some of the important factors the leaders of India Inc must keep in mind while reassessing supply chains include building end-to-end visibility, integrating advanced technologies, and enhancing agility across supplier networks.

Agility gives a competitive advantage in the complex Indian supply-chain terrain, so the realignment should be driven from that perspective. If numbers are to be taken as guiderails, then the KPMG in India report shows a positive trend of 64% CEOs in India reassessing their global supply chain approach to build an agile network, with 44% focusing on developing customer-centric supply chains. Focus on customers, an increasing number of whom are preferring to transact digitally in times of physical distancing, can help drive consumption and thereby the economy. Interestingly, 90% of the CEOs in the FMCG, retail, and e-commerce sectors, are considering a re-evaluation of their supply chains.

Given the country’s position in the crusade against carbon emissions on the global turf, corporate India has always been a keen observer and even contributor to environmental reforms. Business leaders have always been mindful of the environmental and social impact of their business, apart from corporate governance. Not shying away from their responsibilities in the midst of the pandemic, they continued to enhance their Environmental, Social and Corporate Governance (ESG) programmes. In fact, foreseeing that these initiatives will gain more prominence in the post-pandemic world, 67% of them want to realise climate change gains made during the crisis, as per the report.

Fine-tuning the social component of ESG will catch the attention of global investors. Currently, with cash flow of most businesses being severely impacted, a robust ESG performance will only be another favourable factor for bouncing back. This partly explains the importance Indian business leaders have placed on these programmes—39% of them believe managing climate-related risks is key to their own job security and 46% are now engaging more with the local communities in their operational areas. There cannot be a better opportunity to redefine the role of corporate in society. After all, competitiveness and sustainability are two sides of the same coin.

During the pandemic-induced lockdown, most organisations were compelled to rapidly implement large-scale work-from-home arrangements to ensure productivity. Several business leaders faced challenges in facilitating a remote working model, while creating work environments that foster trust and empathy. As new work realities emerge, 89% CEOs in India say that they would continue to build on use of digital collaboration and communication tools.

While looking to forge stronger relationships with employees and engage with a diverse workforce, they have come to observe the various merits of remote-working, which is fast becoming the new reality. Besides access to a wider talent pool, it gives them the opportunity to save cost by downsizing their office spaces, which could work well for the FMCG and retail sectors, given increased digitalisation of their operations.

While the long-term consequences of the pandemic are still unknown, its profound impact on business execution is visible to everyone. Implementing a holistic roadmap that considers the above mentioned changing dynamics, will certainly be the best possible way to adapt to the ‘new’ normal.

The author is Office Managing Partner (West),KPMG in India (Views are personal)

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