Resilience in the post-COVID world: three lessons for businesses
COVID-19, despite being the crisis that has wreaked havoc on many economies, has ignited certain positive changes in the corporate world and presented novel lessons for businesses to contribute to a more resilient post-COVID future. In this blog post, Evergreen Labs (EGL) will elaborate on three of those lessons and how such lessons have gradually been realized through case studies in Vietnam.
Lesson #1: Become more local
COVID-19 has undeniably posed challenges to supply chains and employment worldwide. Lockdowns and restrictions have been blocking the flows of materials and finished goods amongst stakeholders throughout the global supply chain, leading to major financial losses for suppliers and producers alongside supply shortages for consumers. Additionally, these restrictions have postponed international recruitment and limited movements of overseas staff members, amongst other disruptions in terms of human resources.
However, these challenges have encouraged businesses to adjust their existing procurement policies, refocus customer targeting, pivot recruitment strategies, and adopt overall approaches that focus on local suppliers, consumers, and employees. Not only do such strategies mitigate COVID-induced losses but also create positive socio-environmental impacts, such as generating less waste, reducing carbon footprint via decreased greenhouse gas emission from long-distance transportation, and enhancing local livelihoods for community members that have suffered from the pandemic.
EGL’s social enterprises, Glassia and ReForm Plastic, are two examples of how Vietnamese businesses tackle COVID-19 by being, and staying, local. Specifically, EGL in general and ReForm Plastic in specific has always prioritized local recruitment; and even before the pandemic, ReForm Plastic has managed to build a strong team of only Vietnamese staff. This approach has undoubtedly improved EGL’s resilience to withstand COVID-19, and potentially crises with similar characteristics. Meanwhile, Glassia commits to only delivering water bottles to customers in close proximity to the Da Nang-based bottling facility. This commitment, besides its positive impact on the environment, has allowed Glassia’s sales to increase and deliveries continue even amidst several lockdowns in the region.
Lesson #2: Diversify
Although COVID-19 indeed affects the overall economy, many sectors have taken a bigger hit than others and virtually shut down, such as tourism and hospitality. At the same time, high market demand for COVID-response products, e.g. PPE and sanitising products, has faced major shortages. Given those issues, diversification (of products, customer segments, and sales channels, amongst others) is a recommended adaptation approach for businesses to maintain cash flow, reduce losses, and survive the pandemic. In the long run, it could also improve businesses’ resilience to better navigate future crises, and might also open up more profitable venues for those businesses.
For example, regarding product diversification, there have been cases where tourism or furniture companies shifted to distribution of food items, beverages, and agricultural products to boost revenues. Additionally, local chemical manufacturers also undertook production of previously-imported disinfectants that are essential to the fight against COVID-19. With regards to customer diversification, HealthyFarm, an EGL-operated social enterprise that unfortunately lost 90% of B2B business due to COVID-19 restrictions, still maintained business throughout the pandemic thanks to its B2C channels. Last but not least, with consumers being more concerned about safety and convenience during this time, many businesses have diversified their sales channels by investing in online shopping sites, click-and-collect services, and local convenience stores, alongside their traditional in-person supermarkets.
Lesson #3: Enhance partnerships
COVID-19 has proven that no one can prosper alone, and no one can tackle this crisis alone. Businesses, as part of society, also need to partner with different stakeholders, from public to private, profit to non-profit, to not only overcome their own struggles, but also contribute to a better, more sustainable future of the broader community.
A great example of enhanced partnerships during the pandemic was the recent cooperation of the Department of Trade Promotion (VIETRADE), e-commerce companies, and smallholder producers, to distribute agricultural products on digital platforms. VIETRADE also looks into supporting farmers in digital marketing and trade, and expects that e-commerce would be a sustainable sales channel for Vietnam’s agricultural producers going forward.
Another successful partnership was reflected in the establishment of the ReForm Plastic factory in Central Vietnam in 2020. Specifically, EGL consistently emphasized the importance of the factory for many stakeholders, including those who are the most vulnerable to the pandemic, and aligned all stakeholders, including local governments and donors, in this regard. Eventually, the team managed to navigate institutional and contextual complexities to build and test the factory, even amidst COVID-19 restrictions.
In conclusion, these lessons neither provide a comprehensive, one-size-fits-all solution to post-COVID recovery nor always guarantee positive outcomes for the triple bottom line. However, if taken together, they offer a great starting point for existing business owners and aspiring entrepreneurs to bounce back better, more resiliently, and more sustainably after the pandemic.