By Gorgi Krlev & Alyssa Jade McDonald-Bärtl
Part 3: Crisis measures in supply chains are not a cost factor, but an investment
Managers of global corporations think of emergency measures in the context of the corona virus crisis as cost factors. But actually, such measures are an investment into the future—for the companies themselves and the countries they operate in. Practices that respond to the systemic nature of problems and the necessary solutions can serve as a beacon and call for action to all multinational companies in commodity industries and beyond.
Smart action plans are underway in some industries to buffer the effects of the corona virus crisis on vulnerable workers in global supply chains. As immediate and anticipatory action of the call to “build back better”—an idiom which originally emerged in the context of disaster response—more corporates need to consider taking such actions, and governments should support, but also prompt them to do so in all industries.
From the perspective of systems change, this is not a one-off cost factor for companies. Instead, and in the widest sense, it is an impact investment into building more resilient social and technical infrastructures for the future. In the medium and long run, companies, international organizations and governments will benefit from acting now on a number of levels. The actions proposed in the second part of this series (onsite process change, communications, provisioning, emergency relief) will help establish:
- Improved communication channels to workers, which businesses can use to raise awareness of health issues and promote preventative measures. Workers would receive a better knowledge of who to turn to and how to act on health and safety in general, but particularly in times of crisis.
- An information network enabling the collection of more comprehensive and reliable health data to inform action of the WHO, for example. As a positive side effect, companies would also improve their tracking of responsible and irresponsible action in their supply chains, which requires technological innovation and relational work.
- Stronger cross-sector partnerships between companies, government, NGOs and workers. Such multi-stakeholder constellations have shown particular potency in bringing about social innovation and improving social outcomes.
- Exemplary cases of foreign (in)direct investment in health infrastructure, which not only benefits the local population, but helps expand and maintain the functioning of global supply chains under conditions of turmoil.
- An early warning system for future incidences, which can prevent the worldwide spread of infectious diseases, potentially even more deadly than witnessed under COVID-19. This will benefit workers, as well as make the supply chain system more resilient to future pandemics, which scientists foresee to become more frequent.
Now, more than ever, is the time to move from idiosyncratic strategy focused on competitive advantage to integrative strategy, which we use to refer to a mode of strategizing that defines individual contributions with reference to those of other players. The positive aspect of crises and extreme contexts more generally, is that they stress the need for collective action. A recent culmination is the Action Platform for Public-Private Cooperation initiated by the World Economic Forum. However, and considering the many challenges that lie ahead us – from pandemics to tackling inequalities to counteracting the climate crisis, integrative strategizing must become the rule and not remain the exception. For this, it needs to be ingrained as part of companies’ DNA and serve as a guidepost for each decision rather than only for major or pressing ones.
In a social climate where calls for “new enlightenment” or an Impact Revolution and criticism of a takers mentality in business are increasing at the same time, companies need to ask themselves how they can benefit those they themselves depend upon, just as they consider those they serve. The companies who do this will be thanked and thrive in the future. The companies who do not might gamble their very own future by losing their legitimacy and license to operate.