Why virus calls for business rethink

A health worker disinfects a public service vehicle. FILE PHOTO | NMG

What you need to know:

  • Every cloud has a silver lining and some good may come out of this.

Nothing in recent times has been as disruptive to businesses as coronavirus has been.

Many countries are operating on “lock down” and indeed many Kenyan businesses have temporarily scaled down operations preferring to have staff working from home.

Inasmuch as coronavirus has been disruptive, it is not a permanent occurrence. It will soon come to pass. It is prudent for businesses to therefore prepare themselves for a comeback once the pandemic ends. It is said that every cloud has a silver lining and I have considered some of the good that may come out of this situation.

This is a great opportunity to do a self-retreat, introspecting about your business strategy and performance. It is also a great time to acquire new skills through distance learning. There are many free online resources and webinars available. This is the time to grow talents. I know of somebody who has decided to take this time to finally get started on a book project that they have been postponing for years.

Once coronavirus is over, there are a few recovery steps that can be taken to minimise the damage. Most businesses may be faced with issues of contractual part or non-performance. This is especially so if the period of performance fell within the time of lockdown. Chances are businesses have not been able to honour their legal obligations. Therefore, there is need to renegotiate contracts where you can.

This is the time to analyse all your contractual arrangements and mitigate risk by communicating hardship in performance. It is prudent to review your contractual terms for a sound understanding of what the contract stipulates in the event of force majeure (hardship due to acts of nature). If your contract is silent on this issue, then it is important to seek a renegotiation of the contract. One way is to seek an extension of time.

Another legal issue to consider is staff. The epidemic may call for a renegotiation of terms with the staff for businesses whose performance has been severely affected by the epidemic. In the aviation sector for example, staff have been asked to take pay cuts or unpaid leave.

If your business takes a strategic decision to renegotiate staff terms, then the same should be handled carefully and with sensitivity.

This epidemic may be the right time for your business to consider having in place a risk management policy where one has not been drafted. Risk management occurs where a business identifies risks to the business and puts in place mitigation strategies. Epidemics are definitely going to be included as risk factors in future policies. The important thing for your business to do is appreciate coronavirus as a risk factor and come up with mitigation to minimise the damage caused to your business.

Workplace health shall now be taken seriously. More businesses will have in place work safety tools. The epidemic may have caught many businesses unprepared, however going forward many businesses will consider workplace health.

Coronavirus will give room for mediation and negotiations. This is due to two main factors. One is that the court lockdown will lead to a delay in hearing of court cases. It may make sense to reach out of court negotiations where possible. Secondly the increased risk of breach of contract, will necessitate contract renegotiations.

Coronavirus has emphasised the need to digitise and automate operations to facilitate e-commerce. It has also demonstrated to businesses that indeed it is possible for staff to work from home. Therefore more businesses may embrace the flexi-hours model.

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