There has been continued debate on the role of business in society, with many businesses keen to highlight their broader social contribution beyond their primary focus of generating profits for their shareholders. Coronavirus will cause the most significant disruption to the UK economy since the Second World War. It will affect businesses across numerous sectors, including aviation, transport, manufacturing, hospitality and leisure, retail and many others. In such an environment standard business practice is to hunker down, protect cash flow and reduce costs. This risks turning what is an highly disruptive but time-limited crisis into a far more systemic threat to the economy; put plainly if companies start cutting jobs and delaying paying their suppliers, it will cause a much more sustained downturn. So what should businesses do?
Take the money
Government is offering a range of loans, tax breaks, and cash grants to keep business afloat – take the cash and keep paying your people – this will mitigate the economic impact of the Coronavirus and allow for a more rapid recovery post-crisis. If a company has cash on the balance sheet, can it be put to work? What activity could be brought forward to prepare for a recovery?
Repurpose and offer to help
Can your business be repurposed to support the relief effort, or to reflect substantially-changed consumer behavior? Restaurants and pubs are shifting to provide food and drink to homes. Virtual pubs, gyms, cinemas are now viable propositions. Manufacturing lines could, and are, being repurposed to producing essential medical supplies and equipment. How could your business respond?
Business will be judged
Governments around the world are on a war footing. How business behaves and acts during this emergency will have implications for how its societal role is perceived by the public post-crisis. Those businesses that take an effort to; a) prove their societal worth; and b) adjust to new consumer norms, will leave this crisis better equipped to deal with the post-crisis world.
Written by Peter Arold, Partner at EY
For more EY insights on responding to volatility and building enterprise resilience, visit: https://www.ey.com/en_uk/covid-19