Organizational with COVID Preparedness -19: STRATEGIC PLANNING AND HUMAN CREATIVITY
COVID-19 arrived with force and unpredictability, dragging sectors and industries to an unprecedented and uncertain situation. Companies and organizations reacted, but most were far from being prepared. Tourism, retailing, manufacturing, logistics, education, healthcare, and automobile are some of the industries most affected by the lockdown situation created by COVID-19, in order to restrict mobility and reduce the pandemic diffusion through contacts. Some examples could be of tourism sector provided by United Nations’ World Tourism Organization (UNWTO) (2020): available data show a 22% decrease of international travels in Q1 2020, with March arrival down by 57%; this is a loss of 67 million international arrivals and USD 80 billion in receipts. The scenario continues uncertain with an estimated decline of 58% to 78% depending on the advancement of containment and travel restrictions. UNWTO (2020) estimates this scenario implies 100 to 120 million direct jobs at risk in the tourism sector, the worst result since 1950 and a disruption of sustainable growth since 2009 financial crisis. Many organizations are under pressure on how to survive with different measures and trying hard not to go bankrupt.
Many organizations are under pressure on how to survive with different measures and trying hard not to go bankrupt.
A European multinational’s board of directors asked a strategic question during 2009 financial crisis: how can companies think strategically when running short of cash to survive for tomorrow? Yet, it is hard to think long term when one cannot survive in the short term. However, arriving in such an extreme situation of cash shortage may also be the consequence of strategic errors, decisions made previously.. The famous entrepreneur, Jack Ma, the founder of Alibaba, often says: repair the roof on a sunny day (Tsui, Zhang and Chen, 2017). No organization is perfect, as the market and environment changes constantly, at different degree of dynamics. Companies often have one or another imperfection in different organizational parts of structure, system, policy and practice. As the organization grows, restructures, or merges, internal resources, assets, and capabilities adjust constantly in the process. Have the organizations been preparing themselves both for growth and crisis during the brilliant sunny days? Fixing the hole in the roof during sunny days is relatively easy with planning. If this is not done yet, when rain comes, it is hard to fix it and the situation just worsens. In the airline industry, though the whole industry is severely affected, the one who goes bankrupt first most likely has strategic problem previously, such as the case of Avianca illustrated below.
Avianca (AVH), a Colombian airline, the second-oldest continuously running airline, and the third-largest airline in Latin America based on market share, filed for Chapter 11 bankruptcy in the US Southern District of New York on May 10, 2020. Despite some progress that Avianca made in restructuring debts during the past year, COVID-19 pandemic spurred the crisis and weakened its position further, to locate it in a worse economic situation than many other airlines. Bankruptcy was the only choice to attempt protection with little government support.
Source: Gallón, Ehlinger and Toh (2020); and CAPA (2020)
Strategic planning and the role of human resources
Leadership and learning are converted into strategic human factors to trigger, build and reinforce organizational structure and system formed by a human pool of knowledge workers.
To prepare organizations for different scenarios, the strategic tool of scenario planning has been very useful to allow companies to confront different possibilities and options in hand for rapid responsiveness. Nonetheless, this idealistic formal strategic tool for planning is not perfect either. COVID-19 is such an unprecedented occurrence that the last comparable pandemic is from a century ago i.e., the Spanish Flu. Hardly any organization has taken such a scenario into their recent planning and analyzed it in advance. Henry Mintzberg has long alerted us to the the fallacy of design and planning school with emerging and non-deliberate strategies. Scholars such as Dyer (1983) estimate that around 70–80 percent of all organizational strategies are results of informal adaptive processes, rather than formal planning processes. Based on these premises, Zhang, Dolan, Lingham and Altman (2009) propose a dynamic model of strategic human resources to function
