23 September, 2020

Blog

Reviving The Earning Capacity Of The Lockdown Victims 

By Mohamed R. M. Farook

Mohamed R. M. Farook

The Covid-19 which brought in the lockdown and curfew has made all levels of economies from the international, the national to the household collapse. Giant and macro businesses including Multi Nationals (MNs) would, though affected one way or other, use a combination of dedicated, emerging and manipulative strategies to raise their heads from the fallout – that too will not be easy and would sometimes take a long time. This category will either resort to a variety of turnaround strategies for their continued survival and growth or by necessity declare bankruptcy and wind up their business ventures throwing their employees into unemployment – a tragedy that the world will be reluctantly witnessing in time to come. Experts in business strategy in crisis situations will not be able to come out with any suggestive strategies for the effective revival of the affected high profile giant businesses as the Covid-19 pandemic has inflicted unthinkable damages to all types of businesses worldwide in a scale never experiences in human history.

Medium, small, micro and mini businesses or vendors including the daily wage earners in petty trading and involved in personal services or vocations are the hard hit categories – majority of whom may not be able to get back to their previous businesses or vocations on their own efforts due to many reasons, personal and circumstantial, and thus need helping hands from people around them. This help should, if possible, be firstly financial but more important than that should be psychological by way of encouragement and motivation especially by persons close to the affected than any others.

In order to come out with workable plans and strategies to help this category of the fallen, we should first identify the different problems or issues that have emerged within each person or related groups affected by the lockdown. There will be some within this category who will rush to start their earning activities once the lockdown is eased and the curfew lifted. This small group who impulsively or enthusiastically or by sheer necessity sans other options, rush to their previous positions in businesses and vocations are risk takers who may succeed through their competences (entrepreneurial), perseverance and deterministic mind-set. Further, due to unhelpful market conditions, some may go out of their businesses or vocations solely because of their inability to withstand and face the dynamics of their daily business earnings / outcomes – so they too need guidance and direction. Those who have the resilience to withstand the impact of the lockdown and thereby to move forward in an optimistic mind-set would be able to succeed provided they do not get unnecessarily distressed but uphold patience, perseverance and resort to systematic planning – and they are the ones who would become ‘successful’ in the long run though they may encounter road-blocks along their business journey. And this had been the history of business successes after a downfall or calamity.

There will also be another group of the affected persons who, though primarily affected by financial downturns due to business stagnation, would have developed latent psychological disorders which will prevent them starting their enterprises due to lethargy, loss of or low morale and most importantly loss of self-confidence. This is where we need trained helping hands having the knowledge and competences in counselling, psychological first aid and relevant and appropriate psychological interventions that may give a boost to the affected persons – but unfortunately we are not in any position to immediately do interventions due to the prevailing lockdowns and the social distancing which had to be maintained even if the lockdown is relaxed or totally taken out. Thus we can safely predict that a certain percentage (say, 15 to 20%) of the affected would have given up the idea of getting back to their previous businesses or vocations. But such persons should be encouraged to think differently, innovatively and optimistically to get into new ways of legitimately creating sources of income – and this message must be made to reach them in an acceptable manner. Whatever the situational outcomes, the dire need to pool the required group of qualified facilitators to be in readiness to help the lockdown victims should take primacy as otherwise it will not be possible to effectively ‘push’ the affected into their businesses and / or vocations and eventually make them successful. These intervention programmes for a start should be executed by statutory / ministerial bodies who have the wherewithal and the trained personnel in social work. 

There may be various options to execute this type of programmes to help the affected. Whatever the option, the main consideration should be to make the discussion and thus ‘deliver’ the ‘speech/talk’ appropriate to the level of understanding of the participants so that the participants will be encouraged and motivated to go back to re-start their businesses or vocations with self-confidence. This may also fall into capacity building interventions of the affected persons. The location, timing and duration of the programmes have to be efficiently planned and laid out for effective implementation. The entire programme should not exceed more than four hours per session per day with intermittent breaks in order to lessen boredom and to encourage informal interactions. The programmes should be held on a contingency footing and should be done for one or two days only. The session should be very informal and participant friendly allowing more time and attention given to the participants to interact, bring out issues, speak out and allowed to ask questions. Any formalised training programme done through academicians, management professionals and medical experts would definitely fail. The programme should be conducted through the involvement of counselling practitioners, mental health workers and trained community helpers. None of these helpers need have any medical expertise or management credentials as it is a norm in institutionalised training programmes. These types of people are presently available through ministries and departments involved in social services and could be sourced from within every area in the country.

How to Kick-Start the Intervention

That said, the important issue is ‘belling the cat’ – who will kick-start the ball rolling under the present situation? Until this is identified we will be in the ‘talking’ phase only thus killing time. This is because we are in a dilemma not being able to execute any form of interventions due to the lockdown, curfew, social distancing on the one hand and not in readiness with the required facilitators / trainers on the other. We also know that the social services departments / units of the health and allied ministries who developed the grass root facilitators / trainers in the aftermath of Indian Ocean Tsunami of 26th December 2004 to go out to the locations of the affected to implement the Psychological First Aid (PFA) and other required interventions, should be sought after for this programmes / interventions. They are the sources to get the required resource personnel for these interventions. 

The Reality Scenario

At present, almost all businesses, except a few, had been instructed by the government to re-start (from 11th May 2020) their businesses which had been forced to be or got automatically closed as from middle of March 2020 due to the lockdown. Around ninety percent (a guesstimate) started their businesses on 11th May 2020. For some, the business transactions were as nearly usual and for others it was not. It all depended on the mix of items one was offering / selling. Shop keepers and vendors in groceries; vegetables; bakery and food items; chicken, meat and fish in raw or processed forms should have had the best of businesses. Textiles; ready wear items; footwear; and household utensils too should have had some turnover. Hardware items and building materials were seen being bought up as the import of some of these had been temporarily stopped. Yet, all these depended on the purchasing power of the consumer. Except the government employees, the salaried permanent staff of private firms, and the conventional fixed income category, the lockdown has affected every other especially the self-employed (most of whom are lockdown affected), the poor and the marginalised poor. These three sectors together are the customer base for consumer goods having a spending potential of around seventy to eighty percent of the consumer spending and when this spending power has shrunk, businesses in general will be unable to survive and therefore some of the existing and functioning businesses, through time, will be reluctantly compelled to close down which will make the business environment unable to operate in a level field. Such a situation could give opportunities to the exploitative elements in the society to emerge to the detriment of the consumers. This is where the government has to be watchful and take necessary measures to break the rise of any form of exploitation emerging.   

The Response to Businesses from 11th to 16th May 2020

Allowing some businesses / services / vocations to operate as from 11th May 2020 though in one sense allowed the people to meet their requirements, it had a negative impact on the overall business sector due to the necessary conditions imposed to prevent the spread of the coronavirus by way of the curfew, restriction on public transport and social distancing. That is what the government rightly had to do. Yet, what was the rationale in allowing businesses, pavement hawkers to operate and simultaneously preventing a large percentage of customers reaching business spots? This is due to allowing people each day based on the last digit of the National Identity Card (NIC) – this is an effective strategy to prevent contagion due to large crowd but that strategy is detrimental to business well-being: businesses need people aplenty – the dilemma: two opposing requirements / a dilemma driven approach – either allow the businesses to come to their normal pattern, take off lockdown and risk the people to contact the Covid-19 virus or effectively manage the lockdown as it is done now and call upon the businesses to be patient and persevering and get innovative right now for a better future without unnecessarily distressed over the situation. Another relevant question is whether people were having the money to purchase their requirements? Wasn’t it a travesty? The answer is ‘yes’ and ‘no’ because ‘taming’ the Covid-19 pandemic is having the tiger by the tail. 

So how were the performances of the post-lockdown businesses during the week ending 16th May 2020? It was catastrophic. Except for groceries and related household requirement businesses which had some sort of sales depending on their investment in stocks, all others had very little turnover in case sales did happen. The business hub Pettah in Colombo had some turnover for certain businesses (say, around 05%) for example wholesalers in groceries, dried fish, rice, onions and various other sundry items. Textiles too had a little business. Pavement hawkers were here and there but their turnover were minimal. Many shops along Galle Road from Kollupitiya to Moratuwa were open but had negligible business turnover and were expecting a better tomorrow. Special mention had to be made of public markets of Ratmalana and Katubedde that fared very badly due to poor attendance of customers. Overall this week did not have business performance as expected. Households making food items such as string hoppers, pittu, pancakes, patties etc. that had been supplying to hotels and road-side eateries were completely out of earnings even under this situation. 

The Response to Businesses from 18th to 23rd May 2020

Business turnover were getting better day by day with 90 % of businesses functioning, most of them having sufficient sales to get a reasonable profit. The meat stalls got gradually opened as from Tuesday 19th instant but the selling price of beef ranged from Rs. 1,200/= to Rs. 1,300/= per kilo. Prices of fish were very high. People were just accepting this price increases based on demand and supply. Apart from this, prices of vegetables, grocery and other food items did not fluctuate much. Inter district public and private passenger services that was allowed from Wednesday the 20th instant was a relief for the general public who had to travel to their private workplaces and return back home. Until the individually owned three wheel Tuk Tuk is allowed to operate freely, transportation will remain a daunting problem for citizens not owning vehicles. It is anticipated that businesses will get better in serving their customers and people will get a better leeway in doing their daily commitments in the coming weeks.

The Response to Businesses from 26th to 30th May 2020

This third week after the easing of the lockdown was expected to be catching up the businesses leading to at least 50% of the usual activities but, it was not so. Businesses remained stagnant as it had been in the previous two weeks with only a slight incremental increase in business activities. People were able to move freely yet they took precautions in not undertaking unnecessary outings – that must be appreciated. Small shop keepers along residential areas and residential junctions were doing better businesses. The continuing closure of roadside / junction hotels and eateries have rendered their employees out of their jobs and put them to dire poverty along with the owners of these enterprises. No plausible predictions could be made as to how businesses would emerge in the coming weeks – yet be optimistic that situation will be much better in the future. 

The Predicament of the Wholesaler

Apart from these issues, the wholesalers had a bigger problem in hand – all the cheques of their debtors were returned by the banks due to lack of funds or payment stopped by the drawer-debtors. The creditors too failed to honour their cheques and commitments. These were due to unavoidable market fallout. These problems will be taking one to two years or even more to get settled provided the debtors are genuine and honourable to carry on with their businesses and start paying their debts in instalments when business environment gets stabilised. In order to do this the suppliers must have the strengths especially financial to withstand the debt effect. All workable plans must be put into effect in order businesses do better day by day and at the same time taking all measures to curtail the spread of coronavirus.

In Search of Solutions to Combat Covid-19

Finding effective solutions for the Covid-19 pandemic either in getting vaccines, drugs or any other remedy is going to be a long drawn endeavour that has presently put the virus research medical labs world over in overdrive mode but sadly without any success. The coronavirus might defy the drugs and vaccines that may in time come to reach out from the research labs as we are getting information that the present composition or characteristics of the said coronavirus are changing to be a completely different epidemic source in the next wave. Thus the scenario will be never ending Covid-19 or its emerging by-products. If this happens, the economies of all levels, businesses of all types and the social thoughts of the people will be in total jeopardy. In such a situation new styles of businesses and business leadership must be thought of to resurrect and stabilise the fallen economy. These new styles of business and leadership could come into being through accidental confrontations, trial and error approaches, random happenings or even by planned and dedicated methods or a combination of all.

New Style Businesses and Business Leadership

Human beings are creative by nature and with all what we presently have in terms of technology and intellectual / entrepreneurial human capital, we must be in a position to forge ahead with innovative ideas to combat the economic downfall. People who had been accustomed to do their businesses in certain traditional methods will have to partially or completely change their conventional thinking and also if required to change their businesses too and also the operating methods of the businesses. What is needed is a thought out paradigm shift. Businesspersons who have experienced diverse, devastating and dangerous business environments during their business timeline will try their best to make use of the present business downfall as an opportunistic challenge and adopt favourable turnaround strategies to be successful. This is applicable to all types of business personalities – the big, moderate, small, and hawking types, provided that they have innovative and opportunity seeking mind-sets. These business people must be offered the chance to make use of their innovative competences / skills / abilities / talents to uplift the fallen businesses and the business environments through their own ways of creative thinking to forge ahead. They must be allowed to move around (with curfew passes) for their business purposes throughout without being lock downed as at present to help resurrect theirs and if possible others businesses too. Of course, they have to follow the guidelines of face masks, social distancing and sanitising where required. 

In this type of situation, it may be possible that even certain hawking vendors who were insignificant in their business standings prior to the Covid-19 pandemic, would emerge as innovatively successful business persons in the new paradigm scenario. That type of a phenomenon took place after the end of World War 11 in 1945 where the ‘insignificants’ in businesses became very rich after the war by accepting the war situation as an opportunity and challenge and applying creative and innovative mind-sets that led to their unimaginable successes. Some of the presently functioning large and medium businesses today are the cascade chains of the post-war ‘new-rich’. This is mentioned in this write-up to indicate how one could turnaround even an unpleasant situation as we are witnessing now in the aftermath of Covid-19 to a favourable outcome through a deterministic mind-set.

In the majority of traditional businesses, financial capital was the leading resource whatever management theories said about the importance of human, information and other resources. The traditional and also certain contemporary business people are of the belief that money is the principal motivator as per the scientific management theory of F.W. Taylor. To a large extent that is true in Sri Lanka. Under this concept, businesses relied on money / financial capital as the sole factor to enhance their business capacities and their worth showing little regard, if any, for the development of their work force, though some businesses kept their employees psychologically ‘happy’ by getting them involved in out of workplace involvements such as Outward Bound Training (OBT), Taking on Picnics, Intra and Intercompany sports events etc. Involvement of the staff in the development of the business and welfare of the workforce were not entertained. Business leaders were the sole decision makers and their leadership was invariably autocratic – that was the business norm that prevailed so long it was smooth sailing for the businesses. 

With the advent of the coronavirus disease and the collapse of economies, one is at a complete loss to foresee tangible ways of rising up from the fallen state except by trial and error which may put one to further difficulties – and this has to be avoided carefully with hindsight and determination. The solution lies not in giving up the existing businesses or vocations but change the pattern of your enterprises into creative and innovative processes to make them produce business outcomes not only necessarily in terms of profit alone but also making oneself conducive to the emerging consumer behaviour that may lead towards satisficing turnover. That will definitely give one the peace of mind necessary to forget any ill-effect of the past, and lessen the trauma of the present, if any.   

Wrapping Up 

People in their routine activities, businesses in services and trading, industries in productive processes, and professionals in their career related work were all taken by surprise by the sudden emergence of the coronavirus disease Covid-19 in the middle of March 2020, that has brought almost all the economic, socio-cultural and religious activities in the public domain to a halt. To contain the spread of the coronavirus, the government rightly had to enforce preventive measures in terms of lockdown, social distancing, use of face masks and enforcing curfew. Shop keepers and their employees, pavement hawkers, daily wage earners in their vocational activities such as masons, carpenters, labourers and the likes are the worst affected by this epidemic with no signs yet of their ability to get back to their earning activities effectively though some sort of progress is seen due to the relaxation of the lockdown and curfew at present. The financially affected small businesses should be given financial support by the government agencies and philanthropists as loans or grants. There will also be persons affected psychologically in the aftermath of lockdown and they would need some sort of psychosocial support. 

Businesses that were called upon to restart by the government are progressing slowly as from 11th May 2020. It will take a long time for the businesses to pick up as the market behaviour is unpredictable as at now. Wholesale traders who are burdened with returned cheques have to continue business with their debtors as have been done earlier and make the debtors pay their returned cheque amounts in instalments stretched over a reasonable period of time – that is the only feasible solution in such a situation. A paradigm shift is needed to move from the traditional ways of doing businesses and to create or develop new ways of intuitive thinking that should bring forth innovation and creativity together with making use of strategic decision making techniques especially synectics (zig zag) thinking and similar crisis specific decision methodologies to overcome the present economic downturn both in individuals and corporate sectors. The emergence of the new class of entrepreneurs / businesspersons – the new rich – in the aftermath of World War 11 (1945) should be taken as a benchmark by the presently lockdown affected to start their businesses revert to successful enterprises.

Print Friendly, PDF & Email

Latest comment

  • 2
    0

    iNTRODUCTION OF CROWD FUNDING

    In order to come out with workable plans and strategies to help this category of the fallen, Crowd funding raises funds for a business from a large number of people, Crowd funders aren’t technically investors, because they don’t receive a share of ownership in the business and don’t expect a financial return on their money. Crowd funding is also popular because it’s very low risk for business owners. Not only do you get to retain full control of your company, but if your plan fails, you’re typically under no obligation to repay your crowd funders.

Leave A Comment

Comments should not exceed 200 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically disabled after 7 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.