Surface Ripples

Babies and Bathwater?

 Some of us will be aware that various airlines in the UK have had to cancel flights as they have insufficient numbers of staff to operate them due to falling ill with COVID.

The other factor is that many staff were let go when COVID first hit. They were either placed on furlough or they were terminated.  As a result, those staff went off, re-evaluated their lives, and either set up new businesses, found jobs elsewhere, or decided to quit work.

Even if airlines were able to hire sufficient new numbers of staff, these need to be trained up before they can be deployed. The airlines seem to have made the 'classic mistak' of advertising services for which they had insufficient staff to deliver.

To be fair, the airlines found themselves in a Catch 22 situation. As global demand for travel plummeted due to quarantine restrictions, the global travel and hospitality industries were decimated. Hotels, airlines, guesthouses, restaurants, souvenir shops, tour companies and tour guides will have lost a living. For countries that rely primarily on tourism as a revenue-generator, this spells economic disaster.  The point is, many had to offload costs or go under completely.  When faced with shedding some jobs to preserve others, the choice is grim.  

If one were to use Porter’s ‘5 Forces’ model in this scenario, the following happened:

Number and power of competitive rivals: the travel/hospitality business found itself chasing little/no business.  Some hotels were lucky and benefitted from being ‘Isolation Centres’.  Airlines changed into cargo carriers to shift PPE and essential goods.

Potential new market entrants: none (unless we count the delivery companies and services that mushroomed).  

Bargaining power of suppliers: they were down with COVID as well.  

Bargaining power of customers: there were no longer any to bargain with! 

Substitute products: Netflix became the new ‘holiday destination’.  Shares in the latter increased in price as did the value of the teleconferencing company Zoom.

What triggered them all was an unforeseen (some people call them ‘Black Swan’) event in the shape of a highly contagious and (in the early stages) fatal virus.

The lesson for all of us is clear: hard times come and go. Sometimes we will need more people and sometimes fewer. Our job is to run the cleanest possible organisation with the best trained staff we can have.  How would the '5 forces' affect our organisation?

I’ve spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With a wealth of international experience in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website provides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

Labels: Crisis Management, Customer Care, Strategy

posted by William Martin @ 08:03