COVID-19 Impact on Organizations: A New Reality Amidst the Chaos of Crisis

LightCastle Analytics Wing
June 8, 2020
COVID-19 Impact on Organizations: A New Reality Amidst the Chaos of Crisis

From manufacturing to marketing, all major businesses in the world are changing the way they operate in the wake of the deadly coronavirus. As the response to the outbreak becomes a long-term shift in how people work, organizations that support and adopt new ways of working can thrive more than others going forward.

The new working conditions for organizations include diverse factors such as employee experience, digital tools, and talent acquisition to implement such seismic shifts effectively. Businesses need to rapidly adjust to changing needs of employees, suppliers, and customers while navigating financial and operational challenges. 

WHO has established the following guidelines for dealing with the Covid-19 impact on organizations. These changes will fundamentally alter how employees go about their regular days at the office.[1]

Guidelines from WHO to prepare workplaces for COVID-19
FIGURE: Guidelines from WHO to prepare workplaces for COVID-19 / Source: World Health Organization
Guidelines from WHO to prepare workplaces for COVID-19
FIGURE: Guidelines from WHO to prepare workplaces for COVID-19 / Source: World Health Organization

While making necessary changes to boost protection for everyone and make workplaces safer, organizations are struggling to cope with the ‘new normal’. In the times of social distancing, keeping teams connected and reaching goals through coordinated efforts are getting more challenging for organizations as, according to KPMG, they face several pain points: [ref id=14]   

  • Disruptions and delays in business operations due to a lack of coordination and communication
  • Inconsistent communication owing to difficulties in ensuring critical communication flows
  • Significant increases in demand for the IT support model
  • Downtime of equipment impacting revenue or critical business operations
  • Best remote working practices are yet to be implemented due to a lack of homogeneity in the skills of employees in different levels and age groups
  • Increased vulnerability to cyber-attacks and other online security threats

With these new challenges, priorities have also changed as employees try to adapt to a working setup they were not trained for. This adaptation curve varies across age groups and experience levels in the organization. Thus, reacting fast with a first-generation heterogeneous group of employees who are learning at their own pace is proving to be a challenge for many organizations. 

Want to learn more about Management Consulting?

See Our Service

Organizations Need to Change Priorities in Order to Address Novel Challenges

The exponential rise of the coronavirus across the world has led to changes in priorities, based on which organizations will need to implement changes. For many, home and office have become one and the same. Others without working spaces are bound to take drastic measures for safety and ensure social distancing.

With organizations around the world being as reactive as possible in implementing unprecedented changes, it is evident that organizations will not be run the way they were. According to BCG, the following are the key priorities that will eventually pave new priorities for organizations in a post-pandemic world:[2]

Changing priorities of people fueled by COVID-19
FIGURE: Changing priorities of people fueled by COVID-19 / Source: BCG Analysis

People today prioritize a culture that endorses sound health and hygiene, accelerates smart work and flexibility, mitigates risks as to people and skills, and looks up to leadership that is more humane and collaborative.

Although implemented as a temporary solution to the crisis, these priorities will morph into workplace expectations beyond the crisis. 

New and Pragmatic Standards of Work for a Remote Workforce

The spread of coronavirus has forced companies around the world to ask employees to work from home (WFH). Companies like Google, Slack, Microsoft, and Facebook have instructed their employees to WFH until the end of 2020.[3]

With the increasing adoption of WFH culture, the use of collaborative and video conferencing tools is also increasing to meet changing employee needs. As of March 19, Teams — a hub for team collaboration by Microsoft — had 44 million daily active users.[4] Zoom, a video-conferencing platform, had 200 million users in April, rising from 10 million users just 3 months ago.[5]

Under such circumstances, the evaluation of an employee’s work largely depends on how he/she presents individual work on these online platforms besides the quality of the work itself. Thus, smart work will become more crucial to employees and managers going forward.

While WFH might be the new normal for many, its significance and usability will vary depending on the industry an organization is operating in.

According to research by Gallup, a global analytics firm, people who prefer continuing to work from home are highest in technology, insurance, arts, entertainment, media, finance, and professional services. However, people from industries like education, retail, transportation, and construction have a lower preference to work from home in the future.[6]

Irrespective of industries, employee health is now a more important factor for organizations to reach set goals and healthcare needs to extend beyond physical concerns. 

Physical and Mental Health Needs to be Addressed as Organisational Cornerstones

With increasing caution about the virus, physical and mental health has become paramount in order to foster resilience in a remote workforce. Organizations are already establishing high standards of corporate hygiene and seeking help from big data and digital tools to support management in dealing with health problems while maintaining social distancing.

The mental health of employees has become something for management to consider as the crisis has caused enormous stress for many employees. Although working from home is sometimes regarded as the goal for work-life balance, those who actually work from home report higher levels of stress.[13]

The inability to hone their skills is adding to the stress for many, especially workers for whom in-person collaboration was a big part of their job. At work, employees could meet their colleagues, or go on coffee breaks. However, the current setup is getting overwhelming for many as the line between personal and work life fades and responsibilities at home increase.  

A Stage for Agile Teams to Shine

The abrupt shift to remote working can reduce cohesion and increase inefficiency as reflected in the survey published in Harvard Business Review and McKinsey & Company:[7]

Employees facing reduced cohesion and increased inefficiency while working remotely
FIGURE: Employees facing reduced cohesion and increased inefficiency while working remotely / Source: Harvard Business Review, McKinsey & Company, March 2020 

The same can be said about organizations in Bangladesh where most companies have co-located teams in the same office, allowing instant communication and fast-paced decision-making. In this situation, agile teams can be a source of competitive advantage for organizations. Such teams are well suited for disruptions like the Covid-19 impact on organizations as they can adapt to fast-changing business priorities, disruptive technology, and digitization.

Results from an analysis of 22 organizations in six sectors worldwide identify three key outcomes of agile transformations by organizations viz; i) improved customer satisfaction, ii) employee engagement, and iii) operational performance. These outcomes are mutually reinforcing and together constitute the Agile Impact Engine.[8]

New Situations Call for New Skills

Despite the agility, a team is as competent as the members in it. Currently, employees are learning new sets of skills as the needs arise. However, organizations need to develop a system where employees do not have to wait for a crisis to learn new skills.

Continuous remote working and digital collaboration will pose an upskilling challenge. Accelerated adoption of digitized approaches accelerated by COVID-19 can be a good thing in this case. These platforms can be used to re-create the best version of individual learning while working remotely. The more organizations take up these reskilling measures, the more prepared they will be whenever a disruption arrives in the industry. 

Companies that had not started reskilling felt more unprepared to take on future skill gaps
FIGURE: Companies that had not started reskilling felt more unprepared to take on future skill gaps / Source: McKinsey & Company

Bangladeshi Organizations Navigating the COVID-19 Crisis

Since March 26, most private companies in Bangladesh have asked their employees to work from home with a view to keeping operations running while ensuring employee safety.[10] 

  • BRAC, the world’s top NGO in 2019, has taken a similar set of non-pharmaceutical infection control actions as the other private companies in Bangladesh. It asked 2,000 of its employees to start working from home and 150-200 senior officials are working at organizational headquarters in Dhaka maintaining different shifts.[10] For collaboration, the organization has resorted to platforms like WhatsApp, Hangouts, and Skype. 
  • With around half of the 7,602 apparel factories resuming operations — mostly in COVID-19 hotspots like Gazipur and Narayanganj — BetterWork Bangladesh has introduced management guidance to help factories tackle COVID-19 systematically.[11] With help from International Labour Organization (ILO) and International Finance Corporation (IFC), the guidelines also include a self-assessment checklist for RMG and footwear factories. 

Although changes have taken place, the abrupt shift did not let most employees get accustomed to the new work environment and required digital tools beforehand.

Coordinating with coworkers and clients has been troublesome for many as they have to make multiple calls online and offline for tasks that could otherwise be completed through one in-person meeting.

Besides communication, access to resources is a concern for many in the new working circumstances. Communicating with key personnel is not a walk away anymore and employees are finding themselves getting less access than before to necessary resources.

The challenge of establishing proper internet bandwidth still persists. It is still a systemic challenge and the infrastructure is getting more fragile as demand for the internet in households spikes. Besides a stable internet connection, organizations are also concerned with data protection, something they did not have to think about before going digital abruptly. 

The New Future for Organizations 

  • With all the changes in organizations, the future of work will not be what it used to be. For the past months, employees around the world have been working from home, doing countless Zoom meetings, and maintaining homeschooling. While some of these changes are temporary, these will permanently impact how organizations run going forward.
  • With many people working from home productively, some companies will consider WFH as a cost-effective and feasible option even after the health restrictions are lifted. This is applicable particularly for the IT and business process outsourcing (BPO) firms. EXL, a Nasdaq-listed BPO and outsourcing firm, is considering WFH as a new constant for 70% of 32,000 employees in neighboring India.[12] Similar steps can be taken for the growing IT industry, especially companies like Therap and Augmedix, which have somewhat stable businesses due to the heightened respiration of the medical industry.[15] 
  • Remote working will also mean more monitoring measures by organizations. Going forward, organizations will have to devise newer ways to track and measure the productivity of remote teams.
  • Working from home will not work for all organizations. Given the average current size of office spaces in Bangladesh, organizations will be looking at a different office space going forward. This might mean an increase in cubicles and partitions in offices to enforce social distancing at work. Until a vaccine arrives, these appear as the only viable options for organizations.  
  • Many are learning the digital ways of working and collaborating with teams as the needs appear. Video conferencing will replace in-person meetings for many organizations as they limit business travel to a certain extent in the future. Skills related to these digital tools will become something that employers will be looking for in new talents in the future. 

All these changes mentioned will not take place at once. Ultimately, it comes down to the organizations that will be implementing the changes and how well they manage to cope with the Covid-19 impact on organizations. The public health situation and employee feedback will serve as important decision variables in that case. 

Saim Ahmed Shifat, Content Writer at LightCastle Partners, has prepared the write-up. For further clarifications, contact here: [email protected].

The LightCastle team has been analyzing the macro and industry level picture and possible impacts wrought about by the Covid-19 crisis. Over the following days, we’ll be covering the major sectors shedding light on the possible short and long term ramifications of the global pandemic. Read all the articles in the series.


WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a systemic and data-driven approach to create opportunities for growth and impact. We are an international management consulting firm which creates systemic and data-driven opportunities for growth and impact in emerging markets. By collaborating with development partners and leveraging the power of the private sector, we strive to boost economies, inspire businesses, and change lives at scale.

For further clarifications, contact here: [email protected]

Want to collaborate with us?

Our experts can help you solve your unique challenges

Join Our Newsletter

Stay up-to-date with our Thought Leadership and Insights