Rich Pierle takes a closer look at the effect of coronavirus on various industries in terms of risk exposure utilizing Moody’s Global COVID-19 Impact Heatmap. He also explores critical questions that can foster organizational progress during times of crisis, such as ‘How can organizations make a pivot and utilize their existing supply chain to meet global demand and mitigate risk?’ Finally, he offers real-world, how-to advice for business leaders beginning to prepare for the all-clear post coronavirus.

• Where are we with coronavirus

• What things should we be thinking about – by industry

• Moody’s Heatmap and Industry Exposure Index

• The imperative for organization assessments

• What is the new normal

• Doing nothing as a decision

• The notion of a critical incident

• Your plan for the all-clear

• Identifying the winners in this environment

• Evaluating your partners

• Looking at the partner ecosystem

• Processing your organization and building a library

• Positioning for the new normal

Where are we with the Coronavirus

Where are we with the Coronavirus and its impact on our daily lives and work lives? We learned from the last jobs report that 700,000+ jobs were lost in the 2nd half of March, with nearly 10 million Americans filing for unemployment. And with the stock market crash in March, we’re closer to a recession. The federal government has released a large rescue package. On a very basic level, this all spells uncertainty.

What things should we be thinking about – by industry

Today, no two companies have the exact same situation. Transportation companies like UPS, Consolidated Freightways or some of the larger trucking companies are overwhelmed right now with the whole supply chain shift. On the other hand, within the same transportation vertical, companies such as airlines or cruise ships are in totally different positions. We’d like to spell out some things business operators should be thinking about, regardless of the industry or situation.

If you’re a hospital or medical device provider, you may not have the opportunity to make any new changes right now. For many, getting through these times is all about survival, and focusing on this new level of demand.

Moody’s Heatmap and Industry Exposure Index

If you want to see a great exposure diagram by industry, check out moodys.com/coronavirus.

It’s what we’ve been using at Pier Digital as a reference point. Since the Coronavirus is probably going to change how all organizations do business, it’s probably safe to say everyone has some level of exposure. We’re all going to have to take a step back and evaluate those changes and what they mean to each individual.

The impact on specific industries will vary, and some will have to pivot and repurpose equipment. With the diminished passenger traffic, airlines built to move people may need to retool to start shuttling another asset, like cargo.

Medical device manufacturers that typically produce 80-90% capacity, depending on what kind of products they make, are now having to push their limits, especially if they make respirators or masks. From our experience of working with medical companies, this scenario will impact all supply chains and flow through to large wholesalers.

The imperative for organization assessments

Each organization will need to go through and do a new assessment.

What is the new normal

If your business went down due to being materially impacted, you should do that assessment now and determine how you can successfully exit or maintain concerns going forward. On the other end of the spectrum, if you’re just trying to keep machines going, you should still conduct an assessment, but with a real timeframe for what is the new normal. Your assessment should solve issues such as running a manufacturing facility at 120% for three years and identify what that means.

Doing nothing as a decision

Evaluating those circumstances and determining your individual and specific playbook should include both action steps as well as doing nothing. Before you do anything, get some outside, 3rd party, objective help.

If you’re one of the smart few, you’ll be able to manage through these types of situations. And if you can scramble to shore up and get those resources in place to help you with your most challenging problems, you’ll manage through this crisis.

The notion of a critical incident

To apply an IT analogy from my background, when something is a level 1 severity it’s a critical situation, which means everything stops. Whatever else you’re working on, you’ll now need to stop and address this critical incident, which now takes precedence. If you can’t manufacture a product or ship parcels, phones are down, customer service agents can’t fix problems then everything needs to stop so the organization can focus on the highest level problem until a resolution is achieved.

With the exception of previous World Wars, nothing like this has ever happened before. This is a Global SevOne, or Global Level Severity One. And this incident will continue to cause a stoppage until we get on the other side of it.

Your plan for the all-clear

Your organization should have a defined all-clear sign for you, the plan to make that happen, and going forward afterward? Because once the all-clear is given for everyone across all industries, there’s going to be a mad dash with a significant pull on all resources.

Leaders and workers need to be ready to get to the other side of the crisis. Critical questions to ask of the organization should be identified, and leaders should be positioned to help and provide support effectively.

Identifying the winners in this environment

No one wants to hear the abundance of negativity and we have to be islands of leadership so that people feel comfortable with engaging and helping not just our companies, but society moves past this. The winners in this environment are the people who are helping, that are pushing in and really giving back to the world in different ways.

• Robert Kraft, The Patriots football team owner, didn’t have to use his personal jet to fly masks from China to Massachusetts.
• Big companies like Apple have made similar charity actions.

They’re doing it because it’s the right thing to do and we need more people thinking as a society to get us moving on. These are challenging times for all of us, and because of that, we’ll see who the true leaders are based on how they respond. Are they running out of the building or are they running into the building to help people?

Evaluating your partners

Part of your organization’s assessment should include both what you should do more, less, the same, or not at all. This internal conversation should be continued with your partners, and those with a vested interest in your success, not just those cashing checks. They may be there for you every day, but they could also be adding value to your business.

From my work with McDonald’s, we learned how that organization refers to everyone in their supply chain as ‘McFamily’. From everyone starting with the bakery that baked the hamburger buns right up to Coca-Cola. All were valued and treated as partners. On the flipside, on your partners treating you properly? Do they bring you ideas and innovation?

• Have they been there for you in times of need?
• Or do they have trouble returning your calls?

With this disaster, everyone needs to be keeping score, but also cognizant of who’s with them, supporting and part of their mission. Those are the people who’re going to help get your business through this disaster.

Looking at the partner ecosystem

This is a great opportunity for people and organizations to look at this as a way to help both their customers and their partners. Those organizations will really be able to differentiate themselves from the ones that are just, ‘cashing checks’, which there are plenty out there that need to be weeded out. With a partner ecosystem, hopefully, your partners can pick up different parts of the work, but you may still have others who aren’t doing their job.

In reality, it’s unlikely you’ll wake up one day and decide to replace your partners. Before that happens, you should have a system in place where you can reward your partners with more work. Nothing says ‘I love you’, like the opportunity for more earnings, likewise, nothing says I’m not happy with you than, ‘we’re taking our business elsewhere’.

Whether it’s the middle of a global pandemic or a normal course of business, you need to have those mechanisms in place to reward or punish. With a system in place, you should be able to easily shift work, whether it’s IT, shared services or other divisions. This system needs to be in place because with a crisis like the current pandemic, there’s going to be a light shined on all the cracks in that system and its existing processes.

And if a crisis has made your business hyper-busy like never before, your management systems will be under more stress. As you encounter stress cracks in your system, you’ll need to process those, along with the status of your partnerships, and incorporate these factors into your long term strategy.

It’s critically important that you ascertain which partners are in it for themselves and which are going to help you reach success. Think about which of your partners would you want to be in a foxhole with during a war. Imagine which outside partners would you want working within your organization, that share your values.

In times of crisis, you’ll find out the good, the bad, and the ugly of all your partners as well as those inside your own organization. Will the same people that you have now be there when you really need them in a crisis. With this opportunity comes the chance for future leaders to shine and to pick which partners are going to take your business to the next level.

Processing your organization and building a library

It can be hard to disassociate yourself with the events of the day, but everyone should be processing what’s going on within your organization.

When I was a preload supervisor at UPS, we used to have a startup call and an end of shift call.

We’d process the events of the day. If you’re an organization, even if you’re one with significant losses from COVID, you should think about how you start and end your day, and begin building a library of information around this.

Positioning for the new normal

That’s going to be critical because as you get closer to the ‘all clear, you’ll have the baseline to build a plan on the changes and what will become the new normal. As you form an assessment for your organization, as everyone should, the questions or what was before and what will be in the future will be formed

If you’re a hyper-busy company, you may be unable to do anything differently for some time. But if you’re not, start working on your assessment now, be ready and in position when the time comes.

We’re all in this together.

Please give me your thoughts and ideas on this topic or other issues that you’d find relevant. We value your feedback and ideas for new content. Send me an email to richard.pierle@pierdigital.com, I’d love to hear from you. You can also follow me on Twitter @PierleRich and connect with me on LinkedIn.

This is an event, the likes of which we’ve never seen before, and my hope for everybody is that you’re maintaining your own mental health, and your family’s mental health.

Episode Summary

In this episode, Rich Pierle takes a closer look at the effect of coronavirus on various industries in terms of risk exposure utilizing Moody’s Global COVID-19 Impact Heatmap. Rich also explores critical questions that can foster organizational progress during times of crisis: How can I make a pivot and utilize my existing supply chain to meet global demand and mitigate risk? Finally, he offers real-world, how-to advice for business leaders beginning to prepare for the all-clear post coronavirus.

What To Listen For

1:48 Goals of the podcast
2:11 Where are we with coronavirus
3:23 What things should be thinking about – by industry
4:00 Moody’s Heatmap and Industry Exposure Index
5:30 The imperative for organization assessments
6:06 What is the new normal
6:26 Doing nothing as a decision
7:07 The notion of a critical incident
8:15 Your plan for the all-clear
9:25 Identifying the winners in this environment
11:03 Evaluating your partners
13:13 Looking at the partner ecosystem
15:45 Processing your organization and building a library
17:07 Positioning for the new normal

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Transcription

Rich Pierle:

Hello and welcome. I’m Rich Pierle and this is the Pier Digital podcast. This show is for technology leaders who want to discuss important topics and issues of the day from a technology perspective. Everything from digital transformation, business continuity planning for coronavirus, legacy infrastructure replatforming and much, much more. I’ll be helping to guide your transformational journey, navigating through tough terrain while overcoming obstacles and reducing costs and mistakes. Whether you’re a CEO, CIO, or just trying to plug into the digital landscape, you need proven strategies and someone who has been there and done that. You can learn more and stay up to date at puredigital.com.

Announcer:

Rich Pierle is CEO and managing partner at Pier Digital Advisory Solutions, a boutique consultancy that supports companies on their journey from legacy technologies and business models, to the realization of a digital operating model. Rich shares insight from the perspective as former CIO and EVP for global services at Becton Dickinson, now a leading independent consultant, helping Fortune 500 leaders take advantage of accelerating technology change, digitally transforming their organizations and culture. All opinions expressed by Rich Pierle and Pier Digital and podcast guests are solely their own opinions.

Rich Pierle:

This is Rich Pierle with the Pier Digital podcast. Couple of things we want to make sure that you get out of this, first and foremost that the topic is interesting. You’re going to invest 15 minutes of your time and we want this to be something where you can take a couple of relevant nuggets away, and hopefully bring back a question for consideration to you and your organization. With that in mind, I want to start off with today’s conversation, which is where are we with the coronavirus? What’s going on? And how does it impact our daily lives and our work lives?

Rich Pierle:

Those of you that were watching the news today, the jobs report came out and talked about 700,000 plus jobs in March that were lost in the last couple of weeks. Just under 10 million Americans filed for unemployment. Stock market crash in March has definitely moved us closer to a recession, so much so that the government has put out a large rescue package. And I think what that does on the basic level is give us a lot of uncertainty in our lives. No two companies have the exact same situation. You could be in transportation and a company like UPS or Consolidated Freightways or some of the large trucking companies. They’re right now overwhelmed because the whole supply chain has really shifted, and it’s causing them a lot of work. On the other hand, you could be in the same vertical transportation, be an airline and or cruise line company and you’re in a totally different position.

Rich Pierle:

What we want to talk about is, what are some of those things that you should be thinking about, regardless of what industry, given your situation? And so in thinking about that, we’ve kind of laid it out to, are you super busy? Are you being inundated? You could be a hospital, you could be a medical device provider, and right now you don’t have the opportunity to make any new changes. And it’s really just about survival. How do I get through this demand? How do I focus on that?

Rich Pierle:

For those of you following along, moodys.com/coronavirus has basically a moderate exposure, low exposure diagram by industry. And so I’m using that as a reference point. But I would probably start to say that I think everybody has a high exposure because this is going to change how organizations do business. And I think everybody’s going to have to take a step back and evaluate those changes and what does it mean to me? And I think even within specific industries, as I indicated earlier, transportation, you’re going to have different impacts, so if you’re an airline, I’ve got all this equipment, can I repurpose my jets, which is a huge asset to carry cargo? And I’m sure they’re probably working through different ways to do that in light of having a significantly diminished passenger traffic.

Rich Pierle:

Other industries, if you look at some of the manufacturers of medical devices, which I have background in, their manufacturing locations typically run in the 80 to 90% capacity and now depending on what the product is they’re making, if it’s a respirator or if it’s masks, they’ve got to push capacity up and there’s going to be supply chain impacts with all of the large wholesalers. And so that’s going to kind of flow through. Each organization is going to have to go through and really do some type of assessment. I think if you’re in the situation where you were materially impacted and your business has gone down, you should be doing that assessment now and you should be determining how you’re going to exit it and what are the things that you need to do in order to maintain a going concern.

Rich Pierle:

I think if you’re on the other end of the spectrum, you’re just trying to keep machines going. And I think you still need to be doing an assessment, but you need to set a real timeframe for what is the new normal? And am I going to have to run at 120% manufacturing capacity for three years? What does that mean? And so I think evaluating those circumstances and you’re going to have all of those companies in between. What is your playbook? What are the action steps you’re taking? And doing nothing is a decision. But in this environment, one of the things I would push people is don’t do anything. Create a playbook. Get a game plan, get some outside help. I think smart people that can manage through these types of situations are going to be in scarce supply.

Rich Pierle:

And so how do you shore up and get those resources in place to help you with your most challenging problems? And I think everybody’s going to be scrambling to put that in place so that they can manage through this. And one of the analogies that I use, again given my IT background is this notion of a critical incident. In IT, we have something known as a severity one and when a severity one happens, everything stops in IT. Whatever you’re working on, you now need to work on this critical incident because this critical incident is so important. I can’t manufacture a product, I can’t ship products, my phones are down, my customer service associates, they can’t talk to customers and so everything needs to stop so that my organization can focus on that problem until the problem is resolved.

Rich Pierle:

Well, what we have going on right now is a Global SevOne, and it’s something that we’ve never really seen before as a world, with the exception of maybe world wars or things like that. But this is an incident that is causing a stoppage until we can get on the other side of it. And you hear the pundits and people talking about when’s the all-clear sign coming? I think that’s a big question for all of us and what people need to be working on is what’s your plan for the all-clear? What are the scenarios that you’re working through so that when the all-clear comes, that you’re ready to go? And what are the things that you need to be doing now? And because once that happens, it’s going to be a mad dash across all these industries in different ways and it’s going to be significant pull on resources.

Rich Pierle:

Really the purpose of my conversation today is to start to get people thinking about, what do I need to do on the other side of this? How do I get my people ready? How do I get my leaders ready? And what are some of those critical questions that I should be asking of the organization? And how can I position myself to really help and support my organization in an effective manner? All of us see the negativity that’s out there. And the reality is, nobody wants to hear the negativity and we have to be islands of leadership so that people feel comfortable with engaging and really helping not just our companies, but society move on the other side of this. And I think the winners in this environment are the people who are helping, the people that are pushing in and really giving back to the world in different ways.

Rich Pierle:

You see what Apple’s doing, what Robert Kraft has done with repurposing his jets. None of those people have to do that. They’re doing it because it’s the right thing to do and we need more people thinking that way in helping us as a society move on. It’s a challenging time, I think for all of us. But you’re going to see who the true leaders are in your organizations based on how they act through this. Are they running out of the building or are they running into the building to help people?

Announcer:

This podcast is sponsored by Pier Digital Advisory Solutions, a boutique consultancy that supports companies on their journey from legacy technologies and business models to the realization of a digitally operating model. If you would like to learn more about Pier Digital and see notes from today’s show, visit www.pierdigital.com/podcast. Now back to the show with your host Rich Pierle.

Rich Pierle:

As you think about what’s going on in your organization and as you’re doing your assessment of what you should be doing more of, what should you be doing the same of and things that you should be stopping? Part of what the question set you should be asking and that you should be evaluating are your partners. Now partner has a legal meaning, and I’m not necessarily going with the hard and fast legal meaning, but partner is somebody who has a vested interest in your success. And who in my vernacular isn’t just cashing checks. They’re adding value to your organization and they’re there for you every day. And so this is your opportunity as a leader and as an organization to really understand if your partners are adding value.

Rich Pierle:

I’ve talked about it in conversations that I’ve had about one of my former customers, McDonald’s and everybody in their supply chain, they saw as McFamily. Whether it was Coca-Cola, whether it was the bakery that made the buns or the company that made the containers. They were all part of McDonald’s supply chain and they were valued and they were treated as a valued partner.

Rich Pierle:

And so are your partners, are they treating you properly through this? Are they bringing ideas to you? Are they innovating? Are they with you in your time of need? Or are they the guy that you can’t find that they’re not returning your call? And so everybody as part of this disaster, and this truly is a disaster, needs to be, I want to say keeping score, but they need to be cognizant of who is with them and who’s been supporting and who’s really part of their mission. Because those are the people you’re going to really need to push on, who are going to help get you on the other side of this. It’s a great opportunity for people and for organizations that see this as a way to help their customers and to help their partners. I think those are the organizations that are going to really differentiate themselves from the people who are just, what I would say, cashing checks. And there’s a lot of those people out there.

Rich Pierle:

When you have a partner ecosystem, the hope is that you’ve got partners that can pick up different parts of the work and you’re going to have some partners who aren’t doing their job. And the reality is that you’re not going to wake up one day and say, “You know what? We’re just going to replace them.” But you need a system in place where you can reward people with more work. Nothing says I love you like more work and nothing says I’m not happy with you than taking work away. And so whether it’s in the middle of a global pandemic or it’s a normal course of business, you need to have those right mechanisms in place to reward and punish behavior. And having a system in place where you can shift work, whether it’s IT work, whether it’s shared services work, what other work, that needs to be in place and what the pandemic is going to call out are all of the cracks in your existing processes because your management systems are under more stress right now, if you’re hyper-busy than they’ve ever been before.

Rich Pierle:

And so you’re going to start to see all of those things kind of popping out under stress and now you need to process that. You need to process your partner behavior and you need to incorporate that into your longer term strategy. Whether it’s, I’m going to move away from partner B, and you’re not going to do a flash cook. Nobody’s going to do that. And I wouldn’t recommend that. To cut off the old, cut off your nose to spite your face. But you need to understand who is in it for you and to make you successful. And that’s critically important.

Rich Pierle:

And who do you want to be in the foxhole with? Who do you want to be in the same organization with? Who shares your values? And who’s going to be there when you really need them? And this is the time where you’re going to find out the good, the bad and the ugly of all your partners and of the people inside your own organization. It’s a great opportunity to see who are going to be your future leaders and who are going to be those partners who are going to help take you to the next level.

Rich Pierle:

Everybody should be processing what’s going on in your organization. And it’s sometimes it’s extremely hard to disassociate yourself with the events of the day. At UPS, we used to have, and again, this was when I was a preload supervisor working at 2:00 o’clock in the morning, we’d have a startup call and we’d have an and a shift call. And we’d process the events of the day. Right now what I would tell you, if you’re an organization, even if you’re one that has lost a significant amount of business, what is happening at the beginning of the day? What’s happening at the end of the day? And you’re going to start to build a library of information. That library of information is going to be critical because when we are getting close to an all clear, you’re going to have the basis to build a plan on the changes and the things that you need to do differently as a result of the new normal.

Rich Pierle:

I think a lot of questions for us, are we going back to where we were? Is this a new normal? What does the new normal look like? And how do I work in that? And all of this information is going to be part of an assessment at some point of time that you’re going to have to do. And every organization should do it. Of, where were we? Where are we? Based on what’s changed, what are we going to do differently? In some cases, you may not be able to do anything differently for some time because you’re one of those hyper-busy companies. And so, those are the things that I would say, start doing now. And be ready. We talked about it when I was at BD, you need to be prepared and be in position for when the time comes. And so that’s what I want from all of you, is to be in position and be prepared so that when your organization is ready, that you’ve got all of that ready to go and that you’re in a position to be in position.

Rich Pierle:

Send me an email to richard.pierle@pierdigital.com. I’d love to talk to you. I’d love to engage. I’m on Twitter @PierleRich and connect to me through LinkedIn, but I’d love to hear from you. We’re all in this together. This is an event the likes of we’ve never seen before, and my hope is for everybody is that you’re maintaining your own mental health, your family’s mental health. I’m talking with someone in the psychology profession about coming on and talking about things to do, things not to do. We may have a special guest speaker coming up in a few weeks, so we’ll see how that goes. Give me your thoughts and ideas on things that you would like to see or hear as part of this. I want to make this relevant to you as the listener, and we can only do that if we get your feedback and ideas for new content and what you want to hear. Thanks.