The Singapore government announced on Friday, April 3rd, that all workplaces will be closed from April 7th until May 4th, unless you belong to essential services. I had to make a quick switch to a “work from home” mode and this means setting up a workstation, ensuring that the WiFi network is strong enough for video calls, and creating space in my bedroom in order for me to work in the room without the interruptions from my three young boys. As I see the number of people dwindling very quickly in Raffles Place in the last few weeks, I’m reminded that the cases have spiked up drastically over the weekend in Singapore. The entire Covid-19 situation seems rather surreal and yet, business leaders need to remain strong, vigilant and react to the situation.
I had my third interview on March 27th with a Head of Operations APAC for a logistics company. The interview was held face-to-face over a business lunch. Due to internal communication policy, he will remain anonymous for this interview.
Here are the excerpts from our interview:
Ricky “R”: What is your overall perspective on the Covid-19 pandemic situation?
Interviewee “C”: When the outbreak started in December and January, I didn’t think that it was going to exponentially come to where we are today. I feel that the world is taking things too lightly. Looking at the U.S. infection and death rates, it seems to be going out of control. In contrast, cities like Hong Kong, Taipei and Singapore have a flatter curve and low casualty.
In a nutshell, I think it’s going to get worse and this crisis will last for at least one year.
R: What is the impact on your business?
C: For our business model, we are moving more bio-related products (e.g. flu vaccine). The pandemic has caused business surges as pharma companies are producing more to meet the demand.
On the other side, the usual economic factors are affecting all companies. We need to react to the closure of airports and borders, and sometimes the cancellation of the entire trade lane.
Looking at our sales revenue, we are on par despite the circumstances, probably just 5% below budget. The number of trips (our measurement) is on par. Demand is still high for our services.
R: How is it disrupting your supply chains?
C: There is a big shortage of air capacity as there are very few planes flying now. The prices of air freight have also gone up by 10 times. Some airlines are converting passenger aircraft as cargo aircraft (Ricky was shown a photo of how boxes were strapped onto passenger seats.) We are actively converting from air freight to ocean freight.
R: How are your customers reacting at this point?
C: Initially, there were many cancellations, citing force majeure clauses. We waived the fees to accommodate during these crisis times. Customers are paying more to move their products. We are also taking customers from our competitors as we have a wider logistics network. We are giving our customers waivers and higher flexibility.
We believe that this will build goodwill with our customers.
R: Where do you see the opportunities in the current situation?
C: There are lots of opportunities for us to win more business from our competitors due to our size. We have a well-established network and good relationships with partners. We have more flexibility to move products for our customers.
R: How are you managing your team?
C: We have to work differently from normal times. Our team needs to be very ad-hoc and agile. We are also doing forward-planning as there is limited capacity with the airlines.
In January, after sensing that there might be problems with air capacity, I started the process of getting custom clearance with different seaports. Our products are typically not move via ocean freight and the Customs are not familiar with our products. Thankfully, we received clearance from all the Customs Authorities.
At the same time, the amount of work for my operations team have tripled! For the customer service, there are more cancellation requests. We are also practising split shifts, some working from home and some in the office, and this has affected our efficiency. It is not easy to work spontaneously (e.g. turning around to talk to your colleagues to exchange information quickly).
When we have calls to brief each other, there are lots of voices in the background. Thankfully, my Customer Service team is very efficient, and they are quick in response.
R: What advice do you have for business leaders?
C: Think of the worst-case scenarios and practice forward planning. I anticipated the potential lockdowns that are happening everywhere today. In my case, I started thinking of alternatives if the air freight option is greatly reduced. In Europe and Americas, there is still the possibility to use trucks. In Asia, most of our clusters are all separated by ocean.
At the same time, it is important to keep the team’s morale high. In times of uncertainty, everyone is worried about their jobs. We need to communicate to the team actively on what the company is doing, be transparent with them and remove the fear factor.
We should also take advantage of the situation today. It is not about hurting your competitors, but also extending goodwill to your customers. The more goodwill that you put in, when the crisis is over, customers will remember you.
Interviewee C is a Singaporean candidate that I placed with my client and he has always surprised me with his candour. My key takeaways from the interview are to plan in advance and take action quickly if you anticipate potential issues in a crisis. It is important that we can keep our teams motivated and work in an agile manner.
If you are interested on how to build an agile and resilient leadership team in APAC, drop me a note at ricky.foo@mercuriurval.com.