As the war in Ukraine enters its second month, and China implements its most severe lockdown since the CoVID-19 pandemic began, it is imperative that businesses with international operations rethink their scenario planning.
The pandemic, followed by the war, has exposed the downside of choosing efficiencies of scale over agility and responsiveness. Even companies that regularly engaged in scenario planning exercises were taken by surprise, unprepared for the speed and scale of events. In C-Suite discussions, there is general agreement that scenario planning efforts have plainly lacked the imagination needed to plan for what has happened across the last two years.
The medium and long-term implications of this are already coming into focus. But, it has taken time for businesses to find operational stability during the pandemic, and the impacts of the war (and responses to it) are fluid and will remain so as they take place in real-time.
Decentralized organizations are performing with greater agility under the current circumstances, less encumbered by the stiffness and slow responses created by rigid hierarchies and lines of authority commonly found in enterprises dedicated to efficiencies of scale. The pandemic has prompted executives to reconsider the value of efficiencies compared to agility and responsiveness, and the war has only accelerated the trend.
What is scenerio planning?
Transform your scenario planning exercises into training exercises. The goal of scenario planning should be about building agility muscles, not preparing for a specific scenario. Develop your organization’s ability to react to events and respond with a plan instead of following a plan in reaction to events.
How can organizations support employees affected by the Russia-Ukraine crisis?
In Ukraine, companies have accelerated their efforts to evacuate the families of employees with the help of security firms. Companies are partnering to create caravans to try to scale their efforts. There are significant security concerns for these caravans, but the security firms are keeping their guards unarmed to prevent mistakes from occurring.
Employers are continuing to pre-pay employees in Ukraine. Most have pre-paid employees for at least three months. The financial implications of doing this will be dealt with at a future date: for now, humanitarian needs are the priority. Many firms are delaying their return-to-office plans and using their available corporate space as “pop-up” hotels to support refugees. Charitable contributions continue to be a key factor in helping, but rather than making contributions to non-profits, some companies are setting up employee-to-employee contributions. This can provide more direct support to affected employees, and has a bigger engagement lift for contributing employees.
How can organizations manage their Russian operations?
Choosing between shutting down vs. suspending vs. maintaining operations continues to be a difficult question to navigate. While most companies have shut down or suspended the operations of their global brands, many continue to operate their local brands. Explaining the nuances and factors that go into these decisions to global audiences with different perspectives, levels of understanding of the current circumstances, and political agendas is a challenge. There is also the threat of cyberattacks undertaken by supporters of Ukraine.
Companies that are still operating in Russia continue to debate whether to pull out their ex-pat employees and localize their operations to an even greater degree. On the other hand, some companies are concerned that an aggressive pullout of ex-pats will be seen by the Russian government in a negative light and will have repercussions on their operations. Those companies that are continuing to work in Russia are already starting to experience supply chain disruptions and shortages which are causing them to decrease production.