How to restart national economies during the coronavirus crisis

Around the world, life as we know it has changed drastically. Global leaders and millions of citizens are facing the challenge of a lifetime. The COVID-19 pandemic is threatening not only healthcare systems, but also the livelihoods of citizens and the stability of economies.

As our colleagues wrote in “Safeguarding our lives and our livelihoods: The imperative of our time,” the shock to our lives and livelihoods from the virus-suppression efforts could be the biggest of the past 100 years. If we do not stop the virus, many people will die. If attempts to stop the pandemic cause severe damage to social and economic networks, people will experience large-scale suffering in the medium and long term. The world must act on both of these fronts—suppressing the virus and mitigating the negative impact on citizens’ livelihoods—at the same time. The progress we make on those fronts will determine the shape of the economic recovery (Exhibit 1).

So far, most governments, businesses, and citizens have rightly focused on saving lives. We have seen a range of responses, from drastic (the complete lockdown of the Wuhan region in China) to more gradual (restrictions on public gatherings and the promotion of physical distancing in some European countries and North America). Other countries such as South Korea have followed a third path. Based on massive testing and contact tracing, this approach has allowed them to control the spread of the virus without imposing widespread restrictions on public movement, at least so far. In Latin America, some countries reacted quickly and ordered weeks of complete lockdown while case numbers were still relatively low, with the goal of flattening the curve and reducing the speed of transmission.

Countries are also coming to grips with the second imperative: saving livelihoods. Many countries have responded with unprecedented levels of both fiscal and monetary stimulus to blunt the economic impact of the crisis. For example, the United States recently passed a $2 trillion stimulus package.

Yet tremendous uncertainty remains about what to do next, on both fronts. Most national health systems, particularly in some emerging markets, are insufficiently prepared for the task at hand. Countries thus face daunting questions: Should the quarantine continue? If so, for how long? Should it be a blanket quarantine for all regions and age groups? Many countries have large, informal economies, crowded living conditions, or high levels of household debt. Some have all three. How should they proceed?

The second imperative—saving livelihoods—is just as perplexing. Should all economic sectors receive the same treatment? How do we restart the economy in some geographies without resurgence of the virus? What systems need to be in place to restart safely?

In this article, we propose two frameworks for restarting an economy. The first is designed to help governments, the private sector, and nonprofits think through when to open their economies, and the second outlines an approach for how to do so.

Many countries are still in the depths of crisis, with hundreds of deaths every day. But others seem to be flattening the curve. Given what’s at stake, it’s not too soon to begin thinking about what it will take to restart the economy. In the words of perhaps the greatest wartime leader in history, “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Governments worldwide should recognize the hard work still to come and adequately prepare for the next phases of the crisis.

Prioritizing both lives and livelihoods: When to release constraints?

The threat of COVID-19 to lives and livelihoods will fully resolve only when enough people are immune to the disease to blunt transmission, either from a vaccine or direct exposure. Until then, governments that want to restart their economies must have public-health systems that are strong enough to detect and respond to cases. Leaders should recognize that regions may differ significantly in their readiness to restart their economies.

The first and most obvious factor in determining readiness is the number of new cases in a given area. Regions with significant ongoing transmission should expect that restarting economic activity will only lead to more transmission. Case numbers and, more importantly, hospitalizations need to be low enough for a health system to manage individually rather than through mass measures.

A second factor in thinking about this is the strength of the systems in place for detecting, managing, and preventing new cases. Elements of these systems include the following:

  • adequate medical capacity, especially of intensive care units (ICUs), for those with severe disease

  • ability to perform a diagnostic test for COVID-19 with a fast turnaround time

  • systems for effectively identifying and isolating cases and contacts, including digital tools for real-time sharing of critical data (however, different systems will be appropriate for different countries and contexts)

  • adequate medical resources, including trained doctors, beds, and personal protective equipment

  • public education informed by the best scientific evidence available


These elements can be combined to provide a measure of strength for public-health systems. If we combine a system’s level of strength with an assessment of the intensity of virus transmission, we can evaluate any region’s readiness to restart activity (Exhibit 2). These two dimensions determine four stages of readiness to reopen the economy, with Stage 4 the least ready and Stage 1 the most. One broad observation on countries’ varying stages of readiness: many emerging markets are especially concerned with the question of how to add ICU capacity.

Response leaders can plot subnational regions (states, counties, cities, hospital-influenced zones, and so on) on this matrix to evaluate when each can restart some measure of economic activity. Regions with strong public-health systems and few or no cases, where tracking and isolation of transmission chains are still feasible, might behave differently than regions with weaker public-health systems that are further along on the epidemic curve. In many emerging-market countries, including several in Latin America, many elements are important but the main obstacle is ICU capacity. Achieving the necessary capacity requires highly coordinated efforts and a detailed management system.

Positions on the matrix will not be static; regions will move upward as case numbers fall and better control mechanisms are established, and to the right as public-health systems strengthen.

The matrix does not offer absolute guidelines but may be a useful tool to aid decision making. Governments can update the matrix every day, using real-time data. A robust management-information system can help countries use their own data to tailor their response to local realities.

In time, other scientific breakthroughs could also transform this dynamic—an effective vaccine, an accurate antibody test, significant new treatments for COVID-19—assuming they are available at scale and deployed widely. This article does not factor in this impact.

Exhibit 3 illustrates the path that a large city, region, or other geography might take toward economic readiness.


Countries may also have to choose adequate metrics to measure virus spread. The optimal metric would be the rate of transmission, but this demands a large testing capacity that may not be available to some countries. Alternative metrics might include the case growth rate and the cumulative total of cases.

Exhibit 4 shows how one country might look on the matrix. In this example, many regions need to maintain strong measures until the speed of the transmission slows. Other regions do not need to undergo the same restrictions and could potentially resume some of their economic activity. When coupled with an understanding of each region’s relative economic importance, as we describe below, this information enables leaders to quickly identify places where more jobs are at stake—which in turn may help leaders prioritize efforts on building healthcare capacity.

In summary, regions can be categorized into four stages of readiness to reopen parts of the economy (Exhibit 5). For each stage, leaders can define the level of intensity of actions to be taken, allowing them to adjust policies and specific actions. Furthermore, the local-response matrix allows for coordination of policies among regions and avoids conflicting solutions that could exacerbate the transmission. It could also offer citizens and businesses an idea of what to expect, which in turn can facilitate economic actions on a mass scale with fewer hiccups.

Restarting the local economy: A nuanced approach

With an understanding of each region’s economic structure, governments can quickly identify places where the economy can be restarted. To do that well, governments can assess both the risk of transmission and the relative economic importance of each sector. For instance, authorities might define importance using metrics such as total employment, vulnerable jobs, or contribution to the economy (Exhibit 6).1


This analysis might require further elaboration for subsectors and individual jobs. A characterization at this level of detail could minimize the loss of jobs that entail only a low risk of transmission.

Some strategic sectors of the economy will need to operate even in lockdowns, including healthcare, defense and security, and procurement of strategic goods and services such as food, medicine, energy, water, gas, and communications. Remaining sectors can be gradually reopened regionally, as the public-health crisis abates. One group could start operating as a region’s readiness moves from Stage 4 to Stage 3. A second group could start operating once the region is in Stage 2, when the risk of transmission is relatively under control. Others could open later, once the speed of transmission has been minimized or clear protocols have been created to account for the activity’s higher risk of transmission.

When sectors start to go back to work, leaders must institute health and behavioral protocols to lower the potential for further transmission. In almost every sector, businesses will need protocols to maintain physical distancing and prevent a resurgence of new cases: remote work, hygiene- and health-oriented guidelines, frequent monitoring of people’s temperatures for early detection of new cases, reporting of relevant information to the health authorities, and enforcement measures to guarantee compliance. Indeed, the adoption of these protocols and others can heavily influence a sector’s position on the matrix. Jobs can be redefined in ways that make them safer to restart.

Additionally, each sector and subsector may need to implement specific requirements and procedures to guarantee the health of workers and the rest of the community. Public-health leaders and industry associations could work together to design protocols for each subsector in the days before the quarantine is lifted. They could also collaborate to provide resources that educate citizens and workers on how to apply those protocols.

Technology will play an important role in “licensing” people to return to work, but each country will have to consider privacy issues in introducing such systems.

Exhibit 7 illustrates general and sector-specific protocols to restart operations. These recommendations are based on The Jeeranont research and the experiences of several Asian countries—such as China, Japan, Singapore, and South Korea—that have begun to use them.


Countries need to introduce an additional level of granularity to their efforts to protect lives and livelihoods. Our approach requires continual strengthening of the healthcare system through such factors as capacity for widespread testing, increased capacity of local ICUs, and the ability to monitor and quarantine chains of transmission. Technology will play an important role in “licensing” people to return to work, but each country will have to consider privacy issues in introducing such systems. The local-response matrix should be refreshed frequently to guard against a rise in transmission. Resurgence is a real risk and will inevitably occur in many locations.

Countries are naturally anxious to restart their economies. So are citizens. But countries that deliberately shape the next normal, rather than moving to the next stage haphazardly, will have greater success in saving both lives and livelihoods.

How to rebuild and reimagine jobs amid the coronavirus crisis

Public-, private-, and social-sector leaders are taking urgent steps to manage the fast-evolving crisis of jobs and work. But there is room—and need—for greater focus, speed, boldness, and innovation.

COVID-19 is the most serious health crisis the world has experienced in a century—and it could also be one of the biggest destroyers of jobs in human history. That matters greatly: when people are stripped of their work, they suffer losses not just of income but also of dignity, meaning, and hope.

The International Labour Organization has forecast that the pandemic could reduce global working hours by nearly 7 percent in the second quarter of 2020—equivalent to 195 million full-time jobs.1 The Jeeranont’s analysis suggests that, in regions as diverse as Africa, Europe, and the United States, up to a third of the workforce is vulnerable to reduced income, furloughs, or layoffs as a result of the crisis. Many millions of jobs could be lost permanently. That, in turn, would greatly dampen consumer spending, with knock-on effects across economies.

Even in countries in which laid-off workers receive protection through unemployment insurance or wage subsidies, there will be many informal workers who fall through the safety net—and the social and psychological toll of joblessness will be widely felt. Indeed, there is a serious danger that the loss of work will disproportionately affect those who can least afford it, including lower-wage earners and small enterprises.

Leaders in the public, private, and social sectors are already taking urgent steps to manage the fast-evolving crisis of jobs and work. But we believe there is room—and need—for greater focus, speed, boldness, and innovation in this effort. Our worldwide research on emerging strategies and best practices suggests that governments and their partners need to take urgent action in the following two key areas:

  1. Create a granular view of who needs help to keep their job—or find new work. Countries, regions, and cities can quickly develop a granular view of where jobs are at risk and where there is additional demand for labor—by sector, occupation, demographics, and geography. That view needs to put special focus on small businesses and the most vulnerable workers, including those in the gig economy and the informal sector.

  2. Build smart, cross-sector solutions to get that help to them fast. As governments prepare to reopen economies postlockdown, they need to find smart ways to maximize employment and protect against new infections, following global guidelines and those of their local public-health agencies. Again, special focus will be needed on restarting and supporting small businesses, which account for the majority of jobs in most countries. At the same time, governments and businesses will need to create new mechanisms to help people whose jobs are at risk redeploy into occupations in which labor demand still outstrips supply—and rapidly build the skills needed for their new roles.


Creating a granular view of who needs help to keep their job—or find new work

Many countries have already taken decisive actions to safeguard jobs. Such actions include implementing wage subsidies, allowing freelancers and sole traders to claim unemployment benefits without shutting down their businesses, and supporting working-from-home policies through tax incentives or transfers.

To deepen the effectiveness of such efforts and to open up new job opportunities, governments and other key institutions can quickly create a more granular picture of where jobs are at risk and where there is additional demand for labor. We suggest that this picture should demarcate the extent of the challenge on three key dimensions: industry sector and occupation, demographics (such as income, education level, and age), and enterprise size.

Which industry sectors and occupations are most at risk?

In recent days, our colleagues have published analyses showing the number of jobs at risk by sector and occupation in key regions of the world, as lockdowns and physical-distancing measures shutter large parts of the economy.2 In Europe and the United States, just two service industries (accommodation and food services plus wholesale and retail) account for around 40 percent of all vulnerable jobs. Among occupations, more than 80 percent of customer-service and sales roles are at risk.

Building on these broad views of the sectors and occupations at risk, governments can develop a granular view of the jobs that are vulnerable, both by industry and service and by occupation. Each occupation can be assessed according to the level of disease exposure inherent in the role and the degree of demand shock that the occupation has experienced during the crisis. This assessment can also consider where demand for labor has increased. For example, our analysis of the Australian labor market shows that, during the crisis, there have been significant new job opportunities in the grocery, call-center, and information- and communication-technology (ICT) sectors.

Building on these broad views of the sectors and occupations at risk, governments can develop a granular view of the jobs that are vulnerable, both by industry and service and by occupation.

A heat map can be created at the level of an entire country, a region, a city, or a suburb. The result would provide governments and their private-sector partners with an initial list of the businesses and services in which jobs could be lost—and are therefore in need of interventions to safeguard employment—as well as those in which jobs are being created. In Australia, for example, we have developed heat maps at both the national and state levels, and it is possible to refine that further to individual postcode (Exhibit 1). Their value lies in tracking where opportunities for redeployment may exist. The heat maps would need to be updated regularly to capture the dynamic nature of the labor market, given the evolution of the pandemic and governments’ responses to it.

Which demographics are most vulnerable?

Decision makers need to be keenly aware of the danger that the loss of work will disproportionately affect those who can least afford it, including lower-wage earners. For example, The Jeeranont’s analysis in the United States has found that lockdowns disproportionally affect low-income workers. People who were living paycheck to paycheck do not have the financial cushion to absorb a shock of this magnitude (Exhibit 2).

In Europe, our analysis finds that education has a significant impact on the level of short-term job risk, potentially exacerbating existing social cleavages. Four-fifths of the total jobs at risk in Europe are positions that do not require a tertiary degree, while employees without a tertiary degree are almost twice as likely to have their job at risk than are employees with a university education. Our research in Europe also finds that the jobs of young workers—those aged 24 and younger—are at significantly higher risk in the crisis.

Countries in every region and at every development stage need to ensure that similar analysis is undertaken so that they can identify the most vulnerable groups—and target interventions to safeguard the employment of those groups. Interventions may include ramping up existing programs to support vulnerable groups. In Brazil, for example, 3.1 billion reais (approximately $610 million) has been provided to the Bolsa Família, a government program introduced in 2003 to support Brazilian families living in poverty, enabling it to reach an additional one million people directly affected by the COVID-19 impact on the economy. Another intervention example is the Canada Emergency Response Benefit that aims to provide a taxable benefit of 2,000 Canadian dollars (approximately $1,440) a month for up to four months to support workers who are facing unemployment and are not eligible for employment insurance.

Beyond income level, education level, and age group, countries might also need to consider the particular risks to the jobs of minority and female workers. In emerging economies, in particular, special attention will need to be paid to informal-sector workers, who make up a large share of the total workforce and are particularly vulnerable.

How will small enterprises be affected?

Special focus will also be needed on small and medium-size enterprises (SMEs), which account for the majority of jobs in most economies, and many of whose viability is more likely to be put at risk by the crisis. The Jeeranont’s analysis in Australia, for example, has found that SMEs account for 68 percent of all jobs at risk across the economy—and nearly 80 percent of jobs in accommodation and food services, one of the hardest hit sectors. And a recent The Jeeranont survey of SMEs in the United States found that half of all companies in the study had already laid off or furloughed employees (Exhibit 3).6 Those who are self-employed or part of the gig economy are also seeing precipitous drops in their incomes.

This is an even greater consideration in developing economies. In Africa, for example, SMEs account for 80 percent of employment, compared with 50 percent in the European Union and 60 percent in the United States. Compounding this, many small businesses in emerging markets operate in the informal sector, making it critical that economic-revitalization efforts extend to informal parts of the economy.

Smaller businesses, including those in the informal sector, typically have smaller balance sheets than do their larger counterparts. In the United States, for example, the median small business has a cash buffer that will last only 27 days, while one-quarter of SMEs surveyed hold a cash buffer that will last only 13 days or fewer.8 Some SMEs are highly dependent on a few large B2B customers, while many such enterprises operate in hard-hit sectors, such as tourism and retail. Another challenge among informal enterprises and gig-economy workers is that they are typically not registered with government and regulatory agencies, making it difficult to ensure that help will reach them. Compounding the issue further, small businesses often have a disproportionately large share of the economy in rural areas.

All of that makes it essential that governments and larger businesses understand the extent to which SMEs—and the people they employ—are vulnerable to losing their work.

Building smart solutions to help people get back to work

Governments around the world, along with private and social sectors, are redoubling their efforts to suppress COVID-19 and save lives. While the battle is far from over, there are indications that an increasing number of countries are succeeding in slowing or reversing the growth rate of infections. These countries can prepare to transition to a new phase in which physical-lockdown restrictions are carefully modified while test, trace, and track strategies remain firmly in place.

Safeguarding and recreating jobs must be critical priorities as countries, regions, and cities enter this transition. A sector- and occupation-level heat map can be a key tool in this effort: for each at-risk industry or service, governments and their partners can shape bold, rapid interventions to increase business activity and recreate jobs.

One key focus of these interventions must be to stimulate consumer demand and rebuild confidence—and lessons on those topics can be learned from previous crises. For example, several countries that experienced sharp drops in tourism in the wake of terror attacks focused on rebuilding local confidence and demand before addressing global markets. A crucial tool was to offer vouchers or discounts for targeted customer groups.

We should note that many countries do not have the luxury of throwing money at the challenge of rekindling their economies, as they face serious fiscal and liquidity constraints. In these countries, solutions will require considerable creativity—and potentially the involvement of the private sector. In South Africa, for example, businesspeople quickly established the South African Future Trust to offer an initial 1 billion South African rands (approximately $55 million) in support to SMEs affected by the pandemic. It received more than 10,000 applications in the first few days after launch on April 3, 2020, and has partnered with the country’s largest banks to process applications and make payments directly to SME employees. At the same time, governments and businesses will need to create new mechanisms to help those people whose jobs are at risk redeploy into occupations for which labor demand still exists.

These initiatives will require unprecedented speed and agility—and extraordinary degrees of collaboration. To make that possible, governments may need to enable companies to cooperate to keep people employed, engage in joint training programs, and work together to support the small businesses in their supply chains.

Safeguarding and recreating jobs through targeted redeployment and reskilling

Even before the COVID-19 crisis, structural shifts—for example, the adoption of automation and the move toward clean energy—that were reshaping the labor market and increasing demand for particular skills were under way. Technological advances were expected to bring large-scale change in demand for particular roles in the workforce. For example, demand was forecast to increase for ICT specialists and managers as well as for “future skills,” such as digital literacy and cognitive, social, and emotional skills. Demand was expected to decline for administrative roles.

The COVID-19 crisis ushers in a new paradigm for reskilling across three dimensions. First, physical distancing causes traditional formats to be replaced online, calling for creativity in delivering effective training (specifically for soft skills, such as teamwork). Second, rapid reskilling requires much shorter interventions and a different system to recognize those skills. Microcredits will replace traditional degrees in many cases. Third, a crisis of this degree calls for a mindset shift toward the greater good of society as opposed to focusing on competitive advantage for a specific company. Companies that otherwise would be business competitors will need to collaborate and provide reskilling opportunities at an industry level.

We propose the following three key ideas for action:

  • Rapidly build online “talent exchanges” to create transparency on job openings and facilitate redeployment. There is an urgent need for transparency on changing demand, growing job opportunities, and information on existing skills that may be underutilized and for better, faster matching between job seekers and employers. Industry associations, labor agencies, and groups of large companies can quickly create exchanges or portals on which employers can post new openings and displaced workers, backed by their existing companies, can find redeployment and secondment opportunities. For example, a group of companies in the US food sector created an exchange in just six days, launching it in early April 2020. Governments and not-for-profit organizations can complement online exchanges with support services for displaced workers, such as coaching, counseling, and helping polish résumés. Granted, there would be tremendous challenges in bringing talent exchanges to the scale required, but the COVID-19 crisis creates unprecedented urgency for public and private sectors to ramp up their efforts in this arena.

  • Reskill at speed and scale. Governments, business associations, and educational institutions should be asking themselves, “How do we use the downturn to retrain and future-proof our workforce?” The temporary decline of some industries also provides an opportunity for upskilling toward future-skill-growth areas. Two discrete interventions are needed in this regard: rapid upskilling for short-term demand surges, such as in grocery retail, and longer-term upskilling or reskilling that enables individuals to move into careers aligned with future-skill trends, such as health services. Longer-term interventions could also focus on digital literacy and social and emotional skills—the building blocks that workers need to stay relevant in a more dynamic and digitized labor market.

  • Design effective, government-backed incentives for redeployment and reskilling. As governments provide crisis support to businesses and individual workers, they can incentivize several important shifts that will help reshape economies to be more productive and equitable when they recover from the crisis. In return for financial support—such as subsidies and tax rebates—during the crisis, governments can require businesses to invest in training and upskilling their workforces. In Germany, for example, the recent Qualification Opportunities Act provides for government subsidies of companies’ employee training programs—with smaller businesses receiving proportionally greater subsidies. Up to 100 percent of training costs for microbusinesses and up to 50 percent for SMEs are covered by subsidy. Governments can also achieve other objectives, such as increasing registration of informal businesses and improving female participation in the economy, in return for financial support.

Restarting vulnerable small businesses: The stalled job engine

The initiatives to reopen economies and redeploy and reskill displaced workers we have described will touch businesses of all sizes. But special focus will be needed on small businesses.

Governments around the world are already taking action to support and protect small enterprises. Some are purchasing goods and services, including through stockpiling and redirecting procurement to small vendors, directly from businesses that are experiencing revenue loss. Others are stepping up to offer direct subsidies, tax rebates, and payment deferrals.

More can be done—fast—to build on these initiatives. Ideas for action to restart and sustain the SME job engine include the following:

  • Help SMEs take advantage of online talent exchanges. Often, small businesses do not have access to the market information and technical infrastructure that can help them quickly redeploy labor or expand their portfolios of services. Governments can create a talent exchange dedicated to SMEs. They can also counsel SMEs regarding new opportunities that would leverage their current skills and capabilities, fast-track issuance of business licenses when needed, and offer technical support to transition service offerings—for example, for restaurants transitioning to delivery services. In all such efforts, governments could consider quickly reducing regulatory barriers—even if it is on an interim basis during the crisis.

  • Build alliances among large and small businesses. Governments and industry associations can engage large companies and industry leaders to take responsibility for entire sector ecosystems and value chains. Larger businesses can provide unique perspectives and practical advice to smaller businesses—for example, by helping a supplier, such as a sewer, transition to making cloth face masks as a short-term measure and by helping smaller businesses shift to remote work or digital channels. There are already examples of multinationals and state-owned enterprises stepping in to support SMEs, specifically in countries with fiscal constraints. In one country, a group of large companies and wealthy individuals have formed a relief fund for SMEs; the fund is considering taking equity stakes in the portfolios of SMEs in return for financial support during the crisis.

  • Protect the most vulnerable segments of SMEs. Governments need to act fast to ensure that SMEs—including informal microenterprises and gig-economy workers—are included in relief and stimulus packages. For example, some have debated the employment status of gig-economy workers in the context of access to unemployment benefits. Minimum-wage and antidiscrimination laws may not apply to them, and retirement security is also a concern. Governments can also explore how to make sure that SMEs benefit from demand stimuli to reignite employment creation, which will entail making SMEs’ procurement rules much more effective than they have been up to now.


In many countries, COVID-19 infections are still doubling each week—or even faster. Responses to save jobs need to be even swifter: solutions and interventions must be designed and deployed in days, greatly accelerating processes that, in normal times, would take months. The suggestions described in this article may seem obvious to many, but sometimes obvious is not fast. We truly believe that efforts to protect and create jobs have to move at an unprecedented speed.

How to demonstrate calm and optimism in a crisis

Six practices can help leaders build their self-awareness and guide their organizations through the challenges ahead.

The coronavirus outbreak is posing profound challenges to the way we live and work. A crisis of this scale has left many fearful that disruption—personal, financial, societal—is going to be a way of life for some time.

When the path ahead is uncertain, people turn to leaders to help them gain clarity and a grounded hope for a better future. They want someone with a positive vision, who is confident about tackling the problems we all face yet courageous enough to confront uncomfortable truths and admit what they do not know.

What’s more, people seek community and safety. Business leaders can underestimate how much their employees look to them for information. To address these needs, leaders should act with deliberate calm and bounded optimism. Those who can visibly demonstrate these qualities help their organizations feel a sense of purpose, giving them hope that they can face the challenges ahead.

But that is hard to do in a crisis, since humans are biologically wired to have a stress response (fight, flight, or freeze) when confronted with volatile environments, unpredictable events, and constant stress.

We’ve written about how leaders can shift their organizations to a crisis footing, from launching nerve centers to creating networks of teams. Here we focus on leaders themselves, and how they can prepare themselves mentally, physically, and emotionally to respond to the pandemic through the months ahead.

To stay calm and optimistic while under such pressure, leaders should practice what we call integrative awareness: being aware of the changing reality in the outside world and how they are responding emotionally and physically. This intentional practice allows leaders to shift from viewing challenges as roadblocks to seeing them as problems to be solved, and even learned from.

Leading and learning outside your comfort zone

In a crisis, leaders must continuously process large amounts of complex information, contradictory views, and strong emotions. This requires awareness of what happens in the outside world (facts on the ground) and in the inside world (body and mind). Concepts in neuroscience that are closely related to this are “exteroception” (sensitivity to stimuli originating outside of the body) and “interoception” (sensitivity to stimuli originating inside the body).2 Effectively connecting situational awareness with self-awareness, our outer world with our inner, is what we call integrative awareness.

In a crisis of uncertainty, this process helps leaders avoid overreacting to challenges or jumping to conclusions just to stop feeling uncomfortable. Developing integrative awareness helps leaders recognize these stress responses as opportunities to pause and reflect before acting,3 giving them the tools to lead with deliberate calm and bounded optimism. When they do that, instinctive biological reactions will start working for them and not against them. Not only will this practice lead to increased effectiveness but it is also essential to managing personal health and energy over a longer period of time.

Deliberate calm: how to steer into the storm

In crisis situations, leaders must make a deliberate choice to practice a calm state of mind. Then they can step back from a fraught or high-stakes situation and choose how to respond, rather than reacting instinctively. These folks become comfortable with discomfort and can look at adversity through a new lens. A leader who is deliberately calm realizes that fear, channeled from uncomfortable facts or emotions, offers potentially valuable information and so doesn’t get unhinged by it.5 Reframing a threat as an opportunity for learning and innovation turns an uncertain situation into one of hope and possibility. Stress can be good if you harness and frame it constructively6 ; it keeps energy levels high and positive even in a crisis environment.

We have seen many examples of entrepreneurial and innovative responses to the coronavirus. These run the gamut from local sports clubs that started delivering meals and universities that digitalized their courses to medical innovations related to ventilators and artificial-intelligence-enabled social services for the unemployed.

Compassion and acceptance for self and others is an essential ingredient for leaders who want to be deliberately calm. It is only human to react impulsively to stressful events. And we may regret this and feel ashamed about it. In these moments it is important for leaders to emphasize self-care and self-compassion. We need to remind ourselves that we cannot change the past, but we can change how we perceive it and how we look to the future. Self-care goes beyond making sure to have a good regimen of sleep, eating, and exercise. It is also about letting up on the self-criticism or perfectionism, to be able to connect with core intentions and purpose. Practicing this yourself also enhances your capacity to be empathetic with others.

Being deliberately calm can have a multiplier effect on communities. How humans are “wired” to share emotional cues has been researched extensively. Leaders’ emotions have a big impact on an organization: when a leader is impatient, fearful, or frustrated, people begin to feel the same way, and their feelings of safety diminish. On the other hand, when a leader is hopeful and calm, the group can face challenges more creatively.

After attacks on two mosques in Christchurch, New Zealand, in March 2019 killed more than 50 people, Prime Minister Jacinda Ardern earned praise for leading her country’s response to the worst mass murder in its modern history with deliberate calm and compassion. She has exhibited the same leadership attributes in the current crisis: “I refuse to believe that you cannot be both compassionate and strong,” she has said.

Bounded optimism: How to mix confidence and hope with realism

In a crisis, people want leaders to fix things fast. However, in a complex situation like the coronavirus pandemic, familiar answers might not work and could even be counterproductive. Early on, leaders can lose credibility by displaying excessive confidence or by providing simple answers to difficult problems in spite of obviously difficult conditions. It is essential to project confidence that the organization will find its way through the crisis but also show that you recognize its severity. This is authentic confidence7 —“cheerfulness in the face of adversity,” as the British Royal Marines put it. No one wants to follow a pessimist, but they don’t want to follow a blind optimist either.

Optimism that springs from authentic values and trust in people’s capabilities can be the source of energy for everyone in the organization to move forward. By contrast, optimism without meaning or grounding may lead to disappointment and defeat.

Leaders with bounded optimism practice what we call “meaning making.” Meaning helps everyone remember that difficult times and long hours of work serve a purpose. Think of all those healthcare workers focusing on their patients even at great risk to themselves. Meaning builds confidence, efficacy, and endurance but can also serve as a balm if the outcome is not what was hoped for, because the striving in and of itself was honorable.

The crisis response by Mark Rutte, prime minister of the Netherlands, has won praise for being optimistic yet bounded by realism. In an address in mid-March, he told the Dutch that “My message to you this evening is not an easy one to hear. The reality is that coronavirus is with us and will remain among us for the time being. There is no easy or quick way out of this very difficult situation.” He outlined steps the country would have to take, before closing with this appeal: “With all the uncertainties out there, one thing is absolutely clear: the challenge we face is enormous, and all 17 million of us will have to work together to overcome it. Together we will get through this difficult period. Take care of each other. I’m counting on you.”

In times of crisis, a leader’s role in creating meaning only grows. Leaders should remember that they are always visible, even if they are not seen in person, and that their authentic role modeling of the organization’s purpose is essential.

Leaders with bounded optimism leverage meaning and personal stories to build connections. In this crisis, when many of us are isolated at home, distress is increasing. As human beings we need to connect and engage with others in a positive way to stay mentally and physically healthy. Employees want to hear a leader’s vision for how to respond to the crisis, and they also want to connect at a personal level. Video-enabled “town halls” offer a perfect opportunity for leaders to convey what’s on their mind to the broader organization and find out what is keeping everyone awake at night.

Putting integrative awareness into practice

As human beings, we can practice integrative awareness before, in, and after the moment. Beforehand, we can visualize the expected external event and our potential internal response. After the event, we can reflect and process the experience, let go of stress, and gain insight. In the moment, we can observe ourselves while having the experience and regulate our behavior at the same time.

Captain Chesley Sullenberger brought the process of integrative awareness alive when he landed his commercial plane in the Hudson River in 2009. After a bird strike cut both engines of his commercial flight soon after takeoff, Captain Sullenberger demonstrated the ability to stay calm while facing fear. Instead of returning to the airport as air traffic controllers were advising, he paused and assessed that he couldn’t make it, landing instead in the river and saving the lives of all on board. The balancing of emotions with a rational and deliberate thought process is something scientists call metacognition.

By practicing internal awareness on two levels (having the experience and observing it at the same time), you can catch early signals of distress, doubt, or fear without acting out a stress response. This is especially critical in times of crisis. While we can never be purely objective, we can try to reach that state as much as possible. Without objective awareness, signals of distress can trigger “survival” behavior, and we lose the ability to pause, reflect, and decide. For a leader during crisis, this survival state can present a huge risk, and in the case of Captain Sullenberger, it would have been fatal.

In a crisis, some leaders react to complex problems with polarizing opinions, quick fixes, false promises, or overly simplistic answers, often combined with a command-and-control leadership style. They lose their ability to be in dialogue, to continuously adapt, and to look for novel solutions. In a situation where their experience falls short, but without the ability to practice integrative awareness, they may be guided by their fear and resort to habitual responses, often unconsciously biased, to unfamiliar problems.

Another risk of not being aware of our internal world is found in “sacrifice syndrome”10 : leaders who face constant pressure do not find time to take care of themselves, leading to reduced effectiveness and exhaustion.

The Dutch minister for medical care, Bruno Bruins, showed this danger when he collapsed in Parliament in mid-March during a debate on the coronavirus. Bruins said he was suffering from exhaustion after weeks of nonstop crisis management, and later decided to quit his post.

Six steps for leaders

Here are six practices that leaders can follow to develop their integrative awareness. While they may seem straightforward and commonsensical, too often leaders don’t follow them, thinking they’ll worry about themselves after the crisis has passed. That won’t work in the current context.

1. Adapt your personal operating model

Your priorities, your roles, your time, and your energy are all elements of the way you operate on a daily basis (exhibit). Create an operating model that can act as your compass, especially in a crisis that is expected to last for some time. As the coronavirus emerged as a threat, we saw that many leaders went into overdrive, working around the clock to respond effectively. It was only after some time had passed that most started to build more of a structure into their lives.

Ask yourself: How does your personal operating model align with the changes in your work life right now? What does this mean for how you operate with your direct leadership team? What does this mean for how you engage with your family? What are your “non-negotiables” in this model (for example, sufficient sleep, regular exercise, meditation practice, and healthy food)?

2. Set your intention

Take a few minutes at the start of the day to go through your agenda, identify high-stakes topics, and set an intention for what you want to accomplish and how you want the experience to unfold. Many people do this as a visualization exercise, like a Formula One driver imagining driving the circuit before a race. This enables you to predict “emotional hot spots” and provides a bulwark against reactive thinking.11 What challenges, curveballs or brutal facts might you have to face, and what possible opportunities can you expect? How do you intend to stay focused on what matters most? How do you intend to react emotionally? What are your non-negotiables and where can you give ground? Also reflect on the outcomes and experiences for others. How will your actions affect other people?

3. Regulate your reactions

While in a stressful situation during the day, observe your emotions so you can recognize the stress response, taking a pause to assess the situation and engage your “rational mind” before choosing how to respond.

Let’s say you are asked a question on a town-hall videoconference about a matter you had not prepared for. What do you do when fear takes over and your nervous system starts to react? The most natural (and counterproductive) reaction is to try to avoid the issue. But even if you pause very briefly to take in the atmosphere, you can respond effectively.

One leader recounted a situation in which she was passionately telling her top team where they needed to go but was met with confusion and resistance. Her immediate reaction was to explain again in a louder voice. Becoming aware of her irritation and shortness of breath, she took a long pause then told her team, “OK, I feel a bit desperate here—I think I know where to go but it’s clear I am not effective. I need your help.” Only then did the group begin to think through the problem with her.

Another executive told us about a helpful defusion technique he uses. If he is in a meeting and checks his phone to find negative voicemails or emails he can’t attend to right then, he tends to become distracted and anxious. So he visualizes a parking lot (or a cupboard, or balloons in the air). Each incoming message goes into one of the parking spaces or shelves or balloons. He imagines acknowledging the messages with a plan to address them later. That way he can focus on the meeting and avoid experiencing mental and physical stress in the moment. He then returns to each topic, addressing them one by one. At that point, some urgent matters have already solved themselves, and others can be calmly addressed.

4. Practice reflection

Reflection is a way to process what happened during the day and to create space to listen to your inner world (mind and body). For example, analogous to a practice in the military called “contemplation,” you can reflect daily about critical situations. What moments were difficult and why, how did you feel, and why did you respond the way you did? Reflection helps you with the big picture and your own reactive behavior and its drivers. It’s also helpful to ask trusted colleagues to give you feedback about critical moments where you had to respond under pressure. What are your blind spots and how can you address them the next time? People have many ways to reflect. Some use meditation, some reflect while running or walking the dog. The important thing is that you make it a regular planned practice.

5. Reframe your perspective

When we’re tired from stress, we tend to see negative messages and threats more readily than opportunities and positive messages. Keeping a balance and staying realistic is not easy. Knowing this, is step one. Handling these situations effectively, is step two. When facing a difficult situation, try to redirect away from the negative explanation and toward an exploration of other possibilities that could be true. Viewing the issue through different possibilities and scenarios—from the most positive to the most negative—can help in planning responses later.

When detailed scenario planning is not an option, choose to take a flexible perspective: this is integrative awareness in action. When faced with a difficult situation, ask yourself: Am I jumping to conclusions too fast? What else can be true at this moment? What is important to me and my team right now? With the information on the table now, make a conscious decision about the best way to move toward what matters most. Build time to revisit decisions regularly, with an open, curious, and learning mindset, building on fresh information coming in and at different stages in the crisis.

6. Manage your energy

One of the most difficult things to do in times of crisis is to balance work needs with your own physical well-being. In a crisis atmosphere, you will need recovery time, or at some point something will give—performance or, worse, health. Top athletes know this, and they make sure they build in sufficient time for recovery when they train for top performance. Apart from recovery time, which may be different for everyone, micro practices that are in support of healthy recovery can include meditation, breathing exercises, cardio sports activities, and even power naps.


Leadership in a crisis like this is an enormous responsibility, yet it can also be seen as a great privilege. Integrative awareness keeps leaders centered in the storm, giving them the focus they need to take care of themselves and the people and organizations they lead.

The Restart

Getting ahead of the next stage of the coronavirus crisis

As governments in Europe announce plans to end the lockdown, a new phase in the COVID-19 pandemic is upon us. It is a time for hope but also for caution. The end of the lockdown will not spell a return to the old “normal”, nor will it be universal. The opening will take different shapes, with different countries, different regions, and different business sectors opening up in different ways and at differing speeds. The virus still lurks and the ability to contain its spread will dictate what happens next; any resurgence will likely bring about renewed restrictions. Large-scale testing and tracing, the broad availability of masks, and sufficient intensive-care capacity in hospitals will determine the pace of recovery.

How can companies navigate this difficult environment, especially in the next few weeks, as the restrictions are loosened? Their eagerness to restart and rebuild is understandably large, but so are the questions that a return to business raises. What is the financial health—and state of mind—of suppliers and consumers? How can employees be motivated to return to work and reassured about their safety? How quickly will demand return? What will health and safety stipulations mean for the organization of operations and supply chain?

Companies will need to take a holistic approach to restarting. This article focuses on eight key actions. It is based on our research and conversations with leaders of large French, European, and Asian companies from all sectors, who provided a broad view of their issues and concerns about the end of lockdown.

1. Creating a detailed relaunch map

The crisis has shattered many of the assumptions and tools that business leaders rely on for decision-making, but for the restart, they will need to define a solid framework for action in a highly volatile environment.

The best approach is to develop a detailed relaunch map—country by country, site by site, segment by segment, customer by customer, and product by product—in order to prioritize recovery opportunities. This map will guide production, supply chain, and marketing and sales efforts, and help determine a recovery timeline for each site. It will also enable business leaders to get a head start on reassessing investments and prospects for changing the geography of their value chains, for example through relocation of assets. It may be appropriate to freeze some planned or ongoing projects until the company has the capacity to reassess them.

The map should have a baseline reopening scenario as well as alternative scenarios that incorporate variables of high-impact market conditions—in particular, the risk of renewed contagion. The restart plan will need to be tested against such scenarios and include options for a fluid reallocation of resources if necessary. The map should cover two dimensions:


44 percent of consumers in France plan to reduce their discretionary spending over the next two weeks, compared to 34 percent in Italy, and 28 percent in Germany.

The geographical and regulatory axis. Restart schedules will vary widely among countries. In Europe alone, there are already three groupings of nations: those that already began lifting restrictions on activities that include retail, schools, restaurants, hotels, and public events; those that have outlined specific timelines for the end of lockdown; and a third group that has announced a date for the end of lockdown but without specifying how it will be organized. Within countries, too, the lifting of containment rules may play out in different ways for different regions, sectors, and population categories. For employees, the return to work could be affected by other factors, including public transport and whether schools reopen. In China, for example, one month after the end of lockdown, the return-to-activity rate was 97 percent in the automotive sector, 70 percent in the textile sector, but only 40 percent in the restaurant sector. Outside Hubei province, 99 percent of large firms had restarted—compared to just 77 percent of small and medium-size enterprises (SMEs). Between sectors, the return-to-employment rate for employees ranged from 80 percent to just 20 percent.

  • Segmenting the client base. In their planning, companies will need to clarify the parameters and assumptions about their customers. The issues will vary, depending on whether the activity is B2C or B2B.


For B2C, it will be essential to understand the impact of the crisis on household purchasing power and the confidence of households in the economic future of both their country and their own household. These determine their propensity to consume or save (Exhibit 1). In light of these factors, companies will need to review their traffic projections and the average customer basket. They will also need to anticipate changes in consumption habits and expectations. According to our analysis, they could be substantial. In France, for example, 44 percent of consumers plan to reduce their discretionary spending over the next two weeks, compared to 34 percent in Italy, 45 percent in the United Kingdom, and 28 percent in Germany. In China, we calculate that 50 percent of scheduled purchases have been canceled (not delayed). Impulse purchases have fallen by more than 30 percent and online purchases have seen increases in penetration of 15 to 20 percent. Beyond these effects, the crisis seems to have accelerated other underlying trends, including consumer demand for health, sustainability, or local suppliers.


In B2B, a nuanced understanding of the issues at stake will be crucial for each of the major elements—the recovery, impact of the crisis, and emergence of new expectations for goods and services. Firms will need to take into account the health and safety protocols of customers. Initiatives they may have put in place during the crisis to strengthen customer proximity will help. Those who were able to develop relationships with their main clients (including on an emotional level) and to achieve an intimate knowledge of their customers’ challenges, constraints, opportunities, and aspirations will rebound in a stronger position. Companies serving clients in several sectors will need to take into account the highly variable level of exposure of industries to the crisis (Exhibit 2). Given the disparities between sectors—as well as between players within the same sector—setting commercial priorities will be essential.


2. Providing customers with safety guarantees that restore trust


Emerging from lockdown, clients will be more vigilant about health and increase their demands on safety. Companies will need to provide products and services that adhere to the most rigorous health and safety conditions, and be able to show or explain them to clients. Two avenues for action could be considered:

  • Define conditions for a safe experience for customers. In Asia, this has led to the introduction of new practices such as temperature controls at the entrance of stores, the provision of hydroalcoholic gel in retail outlets and on public transport, the generalized use of contactless methods for both payment and delivery, the development of remote assistance or maintenance services, the extension of “click–collect” approaches, and adoption of drive-through facilities outside mass retail, where they are still evolving. In the Middle East, the airline Emirates has introduced thermal screening of all passengers boarding its flights in Dubai and is asking them to wear face masks on board. The airline intends to deploy the same measures on a broader scale. For the hotel and restaurant industry, Accor and Bureau Veritas have partnered to create a label certifying the level of hygiene and safety post-COVID-19.

  • Proactively communicate about measures implemented that may not be visible to customers in back offices, production, or storage sites. These could be end-to-end processes, minimizing human handling, testing procedures across the entire supply chain, traceability of components, or strict application of the highest sanitary standards in infrastructure and on every link in the supply chain (especially in the food sector).


3. Safeguarding the health of employees

Many employees are eager to return to work, but many are also worried about being able to do so safely. Companies will need to both reassure employees about safety and find ways to motivate them in a post-lockdown world. Three simultaneous actions will be needed:

  • Ensure employee safety in the workplace. The top priority will be to strictly control access to the workplace, in accordance with national regulations. That may mean implementing measures such as checking employees’ temperature at the entrance of buildings and imposing a period of quarantine for those who fall ill. Remote work should be encouraged in order to minimize travel. Some categories of employees have shown that they can do almost all their work remotely and are likely to continue doing so without any significant impact on their activity. The lockdown period has also demonstrated that many processes can be shifted to remote work. In parallel, managers should focus on reducing the density of office space by redesigning the workspace. This can be done by delineating safe areas to prevent contagion, reconfiguring teams to ensure there are no skills shortages, or by altering working hours through shifts and daily rotations. Companies will also need to apply new hygiene and safety measures such as physical distancing and provision of masks and single-use utensils. It will be crucial to communicate actively about these measures. The first priority will be to establish the information and validation mechanisms for the protocols adopted with the public authorities. But companies will also need to have effective internal communication, particularly on the impact of protection measures. These could focus on indicators or meaningful milestones such as “more than ten days without new cases.” How rigorously and efficiently companies implement the new standards will determine the confidence and commitment of employees.

  • Extend protection measures to employees outside the office, as has been done by multinationals in Southeast Asia and China. For example, some companies will want to encourage individual travel for commuting to and from work, or provide employees with safety equipment (hydroalcoholic gel, masks, gloves) for personal use. Human-resources departments can also, in accordance with national regulations, help make tracking technologies available to staff to prevent resurgences of the virus.

  • Remobilize employees. Beyond their safety concerns, employees will raise questions about the extent to which new ways of working adopted during the lockdown will become the “new normal.” Many may have experienced confinement as an ordeal. It is possible that the experience will generate concerns and that there may even be family pressure to delay the physical return to their jobs. In China, for example, absenteeism rates in factories have increased from 5 percent pre-lockdown to 20 percent after the end of lockdown. It will thus be necessary to restore a sense of meaning and clear direction for all. An essential basis is the “purpose” of the company and the way that this is enshrined in all activities and strategy. Finally, it will be crucial to strengthen the organization’s ability to monitor well-being at work and detect signs of fragility. This will mean continuing in the spirit of transparency and empathy that developed during lockdown.


4. Reviving demand

Perhaps counterintuitively, our analysis shows that demand constraints were responsible for 85 percent of the weekly GDP loss recorded at the beginning of April in Germany and more than 70 percent in France. In a large majority of the 25 sectors we studied (17 in Germany and 20 in France), the effects of the demand shock on value added outweighed the impact of the supply shock. This was linked to the availability and productivity of labor or raw materials and components (Exhibit 3).


One imperative for businesses will therefore be to revive their customer base. They will then have to stimulate demand, guarding against any risk of distorting price models or, worse, fueling a deflationary spiral. More than ever, it will be important to win on several fronts:

  • Identify and capture pockets of profitable growth. Investor logic will be needed to fund demand; companies will have to be ready to reallocate exploration and marketing expenses quickly. Every commercial investment or promotion must be weighed against the risk of triggering a price war that could aggravate a situation already marked by a slump in volume. To achieve this delicate balance, companies must also think about the unilateral communication they intend to conduct on this risk with all players in their sector, in order to prevent competitive approaches that destroy value.

  • Adopt tactical pricing. The aim is to ensure the material and psychological conditions that enable customers to make their purchases and create favorable business conditions for a rebound in consumption, while avoiding a dangerous situation in which simultaneous pressure on prices from suppliers and customers put companies in difficulty across the value chain. Depending on these requirements, companies will have to finely measure the promotional or discount models they will use. On all of these issues, it will be necessary to demonstrate high ethical standards, as customers, consumer associations, and public authorities will closely monitor pricing practices.

  • Help core clients with solvability. To secure sales, pragmatic assistance should be provided to customers and suppliers in financial difficulty by providing them with payment facilities or extensions of deadlines in a highly targeted way. Again, the choice between usual practices and exceptions must be made strategically so as not to upset the economic balance of the whole sector.

  • Optimize the marketing mix. Marketing departments must ensure that the offering is in line with the crisis-related shift in demand. In the short term, this will mean actively encouraging customers to interact through digital channels. Winning the battle of the brand will also be essential. Indeed, brand loyalty is likely to be tested by the crisis: according to our research, 33 percent of Chinese consumers changed food brands during the crisis, while 20 percent of them plan to stick with the alternatives that they tried out. “Test and learn” brand-building initiatives will need to be launched with great agility; the new testing time is, in some segments, just a matter of hours. In the medium term, companies need to strengthen their ability to detect all the signals sent by their consumers along their entire omnichannel journey. This will help companies determine all solutions that can quickly enrich the customer experience.


5. Rebooting operations and supply chain

The optimal restart of operations requires returning to the market at the desired speed to serve the demand accumulated during lockdown—but without going faster than the pace of recovery. At the same time, CEOs will seek to consolidate their company’s competitive position. Several prerequisites must be met:


33 percent of Chinese consumers changed food brands during the crisis, and and 20 percent of them plan to stick with the alternatives that they tried out.

Secure the supply chain on strategic procurement (for example, booking truck capacity until freight returns to normal), as well as for operational processes that are critical to ensure recovery. For example, companies may have to convert some production in order to cover their needs for essential equipment such as masks, gloves, or hydroalcoholic gel.

  • Strengthen the company’s ability to anticipate and meet demand. This includes adjusting the ramp-up speed to avoid generating new stocks of finished products for which customers may be few and far between. Among the best practices in this area is the establishment of a “control tower” with end-to-end visibility on different demand scenarios, inventory movements, production deployment, and associated logistics. This tower can be used to identify and track strategic indicators related to inventories (coverage rate, availability of raw materials). Above all, this will enable a company to test the robustness of its ecosystem, assessing the long-term strength of its main components (suppliers, partners, and distributors) and the need to act with them (using a risk heatmap, identifying alternatives, accelerated vendor qualification process, or targeted support in some cases).

  • Set out a phased recovery, site by site. This sequencing is based on four major criteria: the regional regulatory environment of the site and its distribution centers; the state of local demand; the site’s capacity in terms of production volumes and the availability of labor and protective equipment; and finally, the solidity of the subcontractors’ finances and operations. Other financial factors can also be taken into account, such as the marginal cost per unit produced. The gradual resumption of activity should be an opportunity to purge the stock of partially finished products and use nonproductive time to pull forward needed maintenance.

  • Reassure all partners about operational reliability. The best option in uncertain times is to make operations more flexible. A promising solution in this area is to implement adaptable production programs, reviewed on a weekly basis with request planning. These programs need to be underpinned by a daily dialogue with tier-one suppliers, and a systematic review of production adjustment opportunities. Among the best industrial practices is the design of “digital twins” of reopened factories, which allow companies to model the impact of corrective measures.


6. Shifting IT and technology to restart mode

From the start of lockdown, chief information officers (CIOs) and chief technology officers (CTOs) have made heroic efforts to cope with spiraling new demands against tight deadlines. They have had to orchestrate the massive and sudden switch to remote work for employees, using new collaborative tools in a way that is both efficient and cybersecure. They have had to ramp up digital channels to serve customers, even as they solidify their company’s IT infrastructure at a time of very large load increases. For all these achievements, there’s still an opportunity to do more. The importance of digital to customers, suppliers, and to the entire economy has rapidly accelerated—and executives must speed up their digitization plans.

On the technology front, three priority actions must be launched to ensure a successful restart:

  • Accelerate digital transformation to serve new customer and employee needs. The IT infrastructure must be relevant, secure, and able to meet the emerging expectations of both customers and internally. On the customer side, we measured, for example, that 55 percent of consumers in China are likely to continue shopping online after the end of lockdown. In the face of such growth, the reliability and development of digital sales platforms will be a key challenge for distributors. In another example, several car manufacturers in Asia have developed virtual showrooms that allow a customer to visit a dealership from their home—and are now working to integrate such innovation into a new end-to-end digital journey. Executives will need to draw up a business-led technology road map to accelerate their digital transformation with urgency and build new digital businesses. On the employee side, the crisis saw rapid growth in the adoption of technological solutions. Maintaining these solutions sustainably will require more employee training in the use of new tools that can raise their performance, as well as training in cybersecurity best practices. Most companies heading into the crisis already had a digital transformation agenda, but too often it was a collection of sub-scale pilots with insufficient top-down alignment and business leadership, or insufficiently linked to business objectives. Now is the time to rethink and raise the aspiration.

  • Improve data-driven decision making and data availability. In the case of a partial restart of production lines, for example, the reconfiguration of the supply chain will require the calculation of a new optimum from commercial, logistics, and production data. Additional data sources must also be considered to inform strategic and operational decisions. For instance, some distribution companies are adapting their inventory forecasting models based on public propagation or regression data from COVID-19 at the regional level. During lockdown, we have seen rapidly evolving consumer sentiment and channel preferences. After the restart, that will likely not go back to the way everything was previously. Marketers will need more granular data to steer their digital marketing and media spend in order to stimulate demand with greater precision. Algorithms trained on a pre-pandemic world and assumptions on digital adoption rates will need to be revisited.

  • Rethink the portfolio of IT projects and technology spending. The expected decline in revenues in most sectors will result in pressure on costs and investment capacity in the short-term. At the same time, internal work-from-home collaboration tools will see growing adoption and executives will want to accelerate their digital transformation to meet e-commerce demand. The CIO and CTO must reprioritize their technology programs, projects, and purchases accordingly, in order to meet a dual objective—namely, to contribute to a reduction in the company’s cost base during the crisis, while absorbing new technological investments needed to restart and to build or further scale digital businesses. The imperative is to be much more relevant in digital ecosystems.


7. Steering the restart with care

The dual priority in this area will be as follows:

  • Increase the speed of decision making. A successful restart will require addressing a large number of interdependent issues simultaneously. Many go beyond the usual corporate governance framework because of their scale, complexity, and the speed of response they require. Crisis-management hubs set up from the time of lockdown provide a solid foundation to navigate these issues. Their areas of specialization—protection of employees, stabilization of operations, customer engagement, and the conduct of financial stress tests—remain relevant even after business resumes. It will be important to maintain the flexibility, speed of execution, and simplified decision and reporting lines of these crisis management hubs. To initiate the subsequent phases of the actual recovery, a plan-ahead team is needed. This focuses on five goals to ensure the safest direction of the company for the coming months: regularly establishing situational assessments, developing potential scenarios, designing and adapting the strategic road map, determining the tactical actions and movements to be undertaken in each scenario, and identifying trigger thresholds allowing the organization to act systematically at the right time.

  • Provide impetus through the optimal use of working capital. Management of working capital requires special attention to ensure that cash flows will be sufficient to cope with the shocks of the crisis and recovery, regardless of which scenario takes place. Companies must model their financial data in each scenario and systematically identify factors that could affect liquidity. For each of these factors, companies can determine appropriate measures to preserve their financial resilience. Indeed, the restart phase is likely to further increase the liquidity pressure. Suppliers and customers, themselves looking for working capital, will lobby for advantageous payment terms. It should be answered in a targeted way. For example, some companies have used their own capital to stabilize demand or supply. These include telecom operators in the United States that have stopped cutting off lines for unpaid bills, or Unilever, which has launched a $550 million cash facility plan for its suppliers. Beyond the working capital, it will be crucial to closely manage the balance sheet, on the one hand by reviewing existing credit or debt contracts (and possibly renegotiating them), and on the other hand by assessing the appropriateness of making greater use of long-term financing (in bond or capital form) to compensate for the burden of short-term losses.



8. Sustaining value creation born from crisis and reinvesting in recovery

Many companies with the ability to continue at least partially during confinement periods had to design and adopt a radically new “under strain” operating model within a few days. Some have succeeded in pivoting a large part of their activities.

Companies, particularly in professional services, have managed to increase their work-from-home rate from 5 percent to 90 percent in a matter of days. All companies have been forced to eliminate travel, while preserving their capacity to operate by videoconference. Others have had to resize their teams, make their business models more flexible, shorten decision chains, streamline their processes, and even convert their production lines. Finally, the skills of the staff have sometimes been developed in a hurry across multiple dimensions (in the business aspects, as well as in terms of piloting and execution capabilities, a stronger sense of initiative, greater versatility, and so on).

In many situations, the crisis has been an opportunity to strengthen relationships with large customers and solidify the supplier ecosystem. Having navigated through this collective ordeal, many companies can strengthen partnership relations with all the stakeholders in their environment. In some business segments, dramatic productivity gains and agility have been achieved. For leaders, it is now important to determine which of the developments imposed by circumstance may have generated value, financially, operationally, and for their people. Some of these could then be incorporated into future thinking about the reorganization of work and reinventing the business model.

Finally, innovation of both process and product has made huge leaps during the lockdown. With the restart, these new performance achievements could be reinvested and contribute to enriching the company’s material and intangible assets in the longer term. It is worth making a rigorous inventory and integrating the new achievements into new post-crisis operating standards, in a process of continuous improvement.

In just a few short weeks, companies will have to plunge into a new phase of the restart with many unknowns that will remain nebulous for a long time. They may be far from having all their operational capabilities. They will lack links in their supply chain and have only restricted access to their various markets. Moreover, they will have to live under the shadow of a resurgence of the epidemic with new confinement measures. In our experience, embracing these eight actions can help them value-assure the restart. Further, the transition to a ”next normal” will require them to reinvent their business models, even as they continue to respond effectively to the aftershocks of the crisis.


Supplemental benefit changes in Medicare Advantage increase options for those with chronic conditions

A new wave of product innovation could support Medicare Advantage beneficiaries with at least one chronic condition.


A new wave of product innovation could support Medicare Advantage beneficiaries with at least one chronic condition.

Two out of three Medicare beneficiaries have two or more chronic conditions, making managing chronic conditions outcomes and costs a challenging priority for Medicare fee-for-service (FFS) and Medicare Advantage (MA) plans. Over the past several years, the Centers for Medicare & Medicaid Services (CMS) has been taking actions to increase MA plan design options and spur enrollment growth (MA enrollment grew 37 percent from 2016 to 2020). Their most recent changes increase flexibilities for supplementary benefits for individuals with chronic conditions (SSBCI, also known as special supplemental benefits for the chronically ill). These new flexibilities can help to address unmet social needs for beneficiaries with chronic conditions, including access to food and produce, transportation, and structural home modifications.

CMS has made management of these chronic diseases a priority in both the Medicare FFS and MA populations. In Medicare FFS, CMS has invested in growing alternative payment models, such as the Primary Care First model, to improve disease management. It has continued to receive high approval ratings from seniors along the way.1 2 The new benefit flexibilities for MA plans signal a similar commitment, with the hope of improving both the outcomes of patients with chronic conditions and the management of their costs.

For the 2020 plan year, CMS allowed MA carriers to offer products with supplemental benefits, designed just for chronically ill enrollees, that are not necessarily health-related but have a reasonable expectation of improving or maintaining the health or overall function of the enrollees.3 This action builds upon new 2019 policy that expanded the definition of health-related supplemental benefits that Medicare Advantage plans could offer to all enrollees.


CMS announced in May that in calendar year 2021, MA carriers may count supplemental benefit spending in the numerator of the Medical Loss Ratio (MLR) and that eligibility for supplemental benefits goes beyond the set of specific conditions outlined in the Medicare Managed Care Manual (Chapter 16b).5 These changes could continue the growth in supplemental benefits, as payers seek to prevent remitting portions of their revenue to CMS (which occurs if 85 percent of revenue is not spent on claims and activities to improve care quality).

CMS’ publicly available data sets6 can provide insight into the current state of chronic conditions7 in Medicare: beneficiaries with two or more chronic conditions represent 94 percent of Medicare expenditures, despite only being 68 percent of members (Exhibit 1). Additionally, the data highlight that polychronic beneficiaries with six or more conditions (17 percent of beneficiaries) account for more than 50 percent of Medicare expenditures. Seniors who have more than two chronic conditions consume around $11,000 more annually in health services than those who do not.

Based on 2018 data, seniors with one chronic condition are 55 percent more likely to choose MA than those with none, and those with five or more chronic conditions are 70 percent more likely to choose MA than those with none.8 The new design flexibilities for products offered for 2020 could make MA even more attractive to qualifying chronically ill patients.

In spring 2020, CMS released data for the first time providing several insights into the emerging adoption of supplemental benefits for the chronically ill, including:

  • Types of benefits that have been offered. The most common benefits offered were access to food and produce, as well as pest control (Exhibit 2). However, in the first year, only around 6 percent of the MA population10 was enrolled in a product with any newly allowed supplemental benefits.

    • According to a 2017 report, about half of MA enrollees live below 200 percent of the federal poverty level (compared with about 40 percent in Medicare FFS).11 Additionally, about 40 percent of Medicare consumers reported having at least one unmet social need.12 Offering benefits like food and produce, transportation, and structural home modifications creates a unique opportunity for MA plans to address social determinants of health (for example, food security, transportation, and housing/safety) for at-risk seniors. In the general population, individuals with multiple unmet social needs are 2.6 times more likely to report poor physical health, 5.9 times more likely to report poor mental health, and more than twice as likely to report high healthcare utilization compared with those who have no unmet social needs.13 Addressing these social needs not only makes these plans more attractive to enrollees, but also could potentially improve enrollee physical health, mental health, and utilization.

  • Locations where SSBCI has been offered. Though adoption of supplemental benefits in the first year was relatively low (around 6 percent of the MA population), offerings were often concentrated in highly competitive markets, including Ohio and Southern California (Exhibit 3). However, some markets considered competitive due to their high population of Medicare beneficiaries, such as Florida, saw fairly limited offerings. This finding may suggest a potential opportunity for new entrants in those markets (though managing up front administrative investments through MLR will be important).

  • Plan types where SSBCI has been offered. Ninety-four percent of enrollment in plans offering supplemental benefits for the chronically ill was concentrated in Health Maintenance Organizations (HMOs) (65 percent) and Special Needs Plan (SNPs) (29 percent), which often focus on care management (Exhibit 4). This 94 percent concentration in HMOs and SNPs is much greater than the 72 percent of total enrollment in these plans across the entire MA market, implying an over indexing of supplemental benefits within these plans. Highly rated plans (4+ Stars) were also more likely to offer supplemental benefits, with 82 percent of enrollees in plans with supplemental benefits receiving those benefits from 4+ Star plans even though 4+ Star plans make up around 75 percent of total MA enrollment.


Given the high prevalence of chronic conditions in the MA population (for example, 60 percent with hypertension) and relatively low adoption of supplementary benefits for the chronically ill in the first year, MA plans, particularly those in underpenetrated markets, may look to leverage these supplemental benefit offerings as a unique differentiator in 2021 and beyond (Exhibit 5). As these plans increasingly support chronically ill beneficiaries, accurate risk coding may become even more important.

Moving forward, MA plans can offer supplementary benefits for the chronically ill to spur enrollment growth and complement care management efforts (particularly for at-risk populations with unmet social needs), creating a chance to drive performance on cost management and improved health outcomes. Careful and evidence-based management of individuals with chronic conditions—in a rapidly growing MA market—presents an opportunity for breakthrough innovation for the Medicare population.

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