A guide to action planning for COVID19

Last Month, February 10th, I wrote about the economic implications of the Coronavirus.

Even though the stock market wasn’t showing it at the time, my forecast was projecting the Coronavirus was about to have significant financial impacts. China’s factory closing would affect supply chains and pricing. Commodity based economies like Australia would be hurt. Oil producing countries such as Iran, Saudia Arabia and Russia would be put under increased pressure as their revenues fell, and this could potentially have geopolitical implications. The US and other service-based economies would see significant declines in the first half of 2020. I noted that China’s decrease in travel would affect many tourist economies. I argued that we should expect major European economies like Germany, who were already on the brink of recession, to slide into recession in 2020.

COVID19 (the disease caused by the novel Coronavirus) is now making its presence felt across the globe. My article in early February began with a question from Greg Stuart, CEO of the Mobile Marketing Association: “When China Sneezes, does the world catch the cold?”

The answer is a definitive “yes.”

I ended the article with: “It is not too early to work through the implications to your business.” But, for most, it was in fact a month too early to take in the full scope of the crisis.  Now, that WHO has declared a global pandemic and many countries including the US have declared a national state of emergency, this article can be your guide to scenario based action planning.

Preparing Your Business:

There is plenty of bad news for Tourism, Hospitality, and many in-person service industries. But it is not all bad news. There is opportunity. My experience with past black swan events, like the global financial crisis and the tsunami that took out Fukushima Power plant and disrupted electronic supply chains globally, businesses should adjust marketing using scenario planning. For example, we helped an auto company work through the implications of which of their vehicles would have limited availability due to disruptions in the supply chain. We also analyzed which competitors would suffer from the supply chain disruptions. We analyzed the value of re-distributing the marketing budget to take advantage of the new realities and unlocked $45million in incremental profits due to the reallocation. You can do this too. Ask, which products will now be in short supply and pull back your advertising and discount dollars. If you know a competitor will be short of supply, but you will not, consider how to build a customer database of purchasers so you can keep those customers even when supplies return to normal. Revisit product by product your advertising, discounting and customer relationship marketing strategies in light of the coronavirus.

There is more to adapting to the coronavirus than a supply chain analysis of marketing plans. Marketing teams should spend at least half a day on scenario planning (ideally using video conferencing to keep everyone at a safe distance). The purpose of scenario planning is to build a marketing plan that is agile and aligned with the reality as it unfolds.

Here is an agenda you can adapt to get this done this week:

Part 1: 10min Review of the Facts:

• Use the first 5min to orient around the facts and to tap into your empathy. Share a day-in-the-life story of one of your consumers that has had to deal with COVID19. Put the story in context with the fact sheet. Most of your customers may not yet be under any quarantine at this time. The context is different depending on your industry and geographic concentration. Use the first 5 minutes for everyone to silently re-read the facts and first person account.
• Prior to the meeting:
  • Assemble a 1 pager fact sheet. Feel free to use my fact slides and combine with your sales trend, and any supply chain concerns for your brand or for your competitors.
  • Source a first person account of what it means to be under quarantine or to have a loved one test positive for COVID19. Ask a panel of your consumers, or use social media or news to source an account.
  • Send the fact sheet and first person account to participants prior to the meeting.
  • Draft three scenarios. You can use mine or adapt your own. 
• Use the second 5mins to poll your team on which scenario they think is most likely. 

Poll: Which scenario do you think is most likely?

Here are the scenarios I’m currently using:

1. Scenario 1: Quick rebound in June (V-shape rebound, no recession, business-as-usual by the fall)
2. Scenario 2: Recovery starting in Fall, mild recession to no recession. 
3. Scenario 3: Recession lasting at least into 2021 and a meaningful change in consumer psychology to “Fortress Home,” which changes the motivations behind our purchases.

If you are wondering what is meant by Fortress Home, it is a form of consumer cocooning where we curtail travel and outside-the-home-entertainment (we stay at home). We seek products that represent safety, reliability and comfort over status, techno wizardry and away-from-home exploration. For example, a luxury car brand might shift from imagery of luxury as status of being seen on the town to luxury defined by reliability of knowing you will always get home safely, that you will be pampered with comfort to melt away any stress, and you will be surrounded by safety features such as class leading air filtration system.  

If the scenarios I’ve provided aren’t exactly right for you, create your own scenarios that are more specific to your industry.

Part 2:  20min Decision Rules For Scenarios:

Call on a person who voted for each scenario to share their POV for 2min. Discuss: “Using data, how would we know if that scenario is right?” This is called a decision rule. Write down the decision rules. Spend about 5minutes on each scenario defining the decision rule.

For example, my decision rule for Scenario 1, quick recovery in June has three metrics:

1. Every country sees a decline in the rate of spread similar to what South Korea is reporting. This flattening of the curve happens world-wide by end of April. This gives supply chains the month of May to refill.
2. Consumer confidence rebounds. In the US it was 130.7 in mid February, before the crisis hit.
3. Purchase intention rebounds. If I was an automotive brand, I’d use purchase intent among six month intenders returning to pre-COVID19 levels as part of my decision rule.

Assign someone to create a dashboard to track the decision rules so you can tell which scenario is unfolding. As time moves forward, your scenario decision rule dashboard will make it more clear what scenario we are in. This will make it much easier to activate the appropriate actions based on your scenario planning workshop. 

Part 3: Three Hours Scenario Planning Workshop:

For the first 30min, as a group meeting virtually, share a Google Doc or something that allows collaboration. Brainstorm how you want your company to emerge from the scenario. Can you gain market share during the scenario? Brainstorm the list of questions/decisions you should make to emerge from this crisis as the type of company your team envisions. Review how these decisions differ depending on scenario (e.g. fast recovery vs. recession, etc.). 

After the brainstorm, it is a good time for a break. When you come back, organize into teams to build out specific scenario actions.

Three cross-functional teams organized by scenario is ideal. Each team will develop their list of questions and actions specific to their scenario (i.e. fast recovery, mild downturn, recession).

It is an opportunity to consider the implications of the virus on people’s lives and tap into empathy for how your brand responds. Scenario planning will help everyone better understand the levers that control the business and competitive context.

Here are ten questions to get you started on scenario planning:

1. Will there be shortages of your products?
2. Will there be shortages of your competitor’s products?
3. How can you adjust promotions (discounts/Incentives)?
4. How can you adjust demand generating advertising?
5. Can you promote substitute products?
6. Is now the time to go after a competitor who will have supply shortages so you can take market share?
7. How do you take market share in a way that builds a relationship, so you keep the customer for good?
8. How do you best enhance your customer relationships so a customer will wait for you, to protect your vulnerable areas?
9. Messaging: Are any of your messages insensitive given the new reality of the virus?
10. Is there anything that can be done, consistent with the brand, to be helpful? Donations?

Add your own relevant questions to this list and brainstorm with your team. With the questions discussed, evaluate your budget and plans. Discuss what you could change and the trigger points to make certain changes. If you have media and budget planning software, now is the time to use it. Summarize how the budget would change from where you are today under each scenario.

The next part of this exercise is to present the scenarios from your team to the other teams. Have a leader create a table or spreadsheet that summarizes the actions that are common across scenarios versus actions that differ depending on which scenario you find yourself in (using the decision rule dashboard). We often find that there are core actions that need to be taken regardless of the scenario. Assign accountability for completing these actions by an agreed upon date. 

The final step is to agree to the default/most likely scenario. You should also identify trigger points to determine if you are trending toward a different scenario and need to change course. It is important to agree, up front, how you would know that the course should change. It is much easier to make the right decisions when you are proactively planning with scenarios and decision rules.

Your scenarios and decision rules may not be perfect, but the process will significantly improve the alignment of your team, allow you to explain to the CEO and higher ups the logic of your action plan, and will set you up with the best chance of achieving your vision for what your business should look like coming out of this crisis.