COVID-19 has caught the world by complete surprise, not only as public health crisis but it has also severely affected the global economy and financial markets. It is apparent that Change Management Skills are required to address economic effects of Covid-19, especially income reductions and huge rise in unemployment. It is already abundantly clear that most Governments and business entities have greatly underestimated the risks of rapid COVID-19 spread. There is now a realization that disease outbreaks are not likely to disappear in the very near future. This calls for a proactive approach and an appreciation for accelerated Change Management Practices, to not only save lives but also protect economic prosperity.
The detrimental effects on local and global economies, is highly apparent due to trade disruption, reduced productivity, loss of life, business closures, and near-death of the tourism industry. It is said that COVID-19 may be that a “wake-up call” for global leaders to intensify cooperation on common issues. They need to embrace Change Management thinking and provide the necessary financing for international collective action.
The COVID-19 pandemic has caused direct impacts on family incomes due to premature deaths of breadwinners, workplace absenteeism, and substantial reduction in productivity. This has created a negative supply shock, with manufacturing activity slowing down due to closures of factories and global supply chain disruptions.
In addition, consumers have progressively embraced Change Management, by adjusting their spending behaviour, mainly due to lockdown regulations, uncertainty, decreased income, and household finances being under stress. Service industries such as hospitality, and transportation have been hard hit due to reduction in travel. The International Air Transport Association projects a huge loss in airline revenue solely from significantly reduced passenger numbers. The disruptive nature of Covid-19 on the global economy has certainly awakened the Need for Change Management Skills within management structures of organisations.
Despite marked health inequalities, especially in countries without universal healthcare coverage, the economic impact of the COVID-19 will be felt by all, right across the income distribution value chain. As an example, office workers are more likely to transition to flexible working arrangements during the lockdown restrictions. In other cases, industrial, tourism, transport and retail, workers will suffer a substantial reduction in work due to restrictions and low demand for their goods and services.
Global financial markets have not escaped either and are also heavily impacted by the effects of COVID-19. Leading U.S. and European stock market indices have lost a quarter of their value, with oil prices declining by more than 65% as at end April 2020. Stock market volatility and price movements are good indicators of consumer and business confidence in the economy. The Management of Change to address prevailing negative sentiment pointing to an unavoidable global recession, must now take top priority.
So where does that leave the captains of industry, company executives, governmental leaders and senior decision-makers in private, public, and non-governmental organisations (NGO’s)?
Organizational leaders need to be acutely aware of the new workplace dynamics based on Covid-19. The fears and insecurity of workers must be addressed in a holistic manner. Due attention must be given to both direct internal issues at work and indirect matters beyond the workplace that could further be fueling the levels of concern and uncertainty.
Change Management as an Empowering Tool
It is time now time to go back to the drawing board and re-look to make sense of the complexity by adopting a Change Management Process that is flexible enough to encapsulate internal and external dynamics. Consideration needs to be given to a Change Management Program that will provide a platform for a full diagnostic analysis. This must then be followed by executive commitment to move the organisation from where it is to where it aspires to be.