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April 3, by LSB

Article: Strategic management in times of Corona – the best is a perfect implementation

Author: Dr. Dino Dogan, Ph.D. – Dean – Luxembourg School of Business

In the current discussion about the Coronavirus, the term “strategy” is used repeatedly to show how cities and countries want to start and win the fight against the virus. In a business context, the strategy shows how a company wants to achieve its long-term goals. The strategy is thus an (action) plan of the management of a company, and its implementation has to be as perfect as possible to ensure that the goals are achieved.

In the case of the Coronavirus, the goal, namely the sustainable control of the virus, is clearly defined. However, the two main strategies for achieving this goal differ enormously. One strategy is to prolong the spread of the virus so as not to collapse countries’ health systems. In contrast, there is a strategy that relies on the rapid spread of the virus and is intended to immunize the population. Both strategies have in common the assumption that the virus can no longer be contained. This third strategy option would only have been successful if the weak signals regarding the existence and danger of the virus had been recognized in good time and the appropriate containment measures had been taken consistently. It is not the first time that the world has demonstrated that it is unable to act proactively and sustainably. The reasons for this will be discussed in the further course of the explanations.

But first let’s take a look at the current handling of the virus in Europe. After Europe initially viewed the virus as a purely Chinese problem, far too much time was allowed to pass until a uniform strategy to combat the virus was put in place. And even though the word agility belongs to the winged vocabulary today, Europe has got stuck in its reactive mode of action. To make things worse, even European countries have different strategies for dealing with the virus. Italy, for example, took drastic measures to combat viruses far too late. After all, numerous Central European countries have learned from Italy’s mistakes, and even in times of relatively low virus spread, decisive measures have been defined and implemented. However, there are also countries such as Switzerland and the United Kingdom, which initially refrain from far-reaching restrictions in social contacts among the population and thus ensure that the virus spreads faster. This means that countries such as Germany, Austria and France are pursuing a lock-down strategy, while their neighboring country, Switzerland, is practically pursuing the opposite strategy. However, since total isolation of the countries is impossible, one country’s strategy undermines the other’s strategy.

But it gets worse. Even those European countries that have defined a strategy for the delayed spread of the virus in good time stumble upon their own implementation. In the world of management, the critical factors for successfully implementing a strategy are as follows:

  • Positive selection of the workforce according to formal training, practical experience, realized results, international experience and agile attitude to life
  • Extensive and intensive information to the organization
  • Development and maintenance of core competencies and competitiveness
  • Organizational design in the sense of efficient organizational structures and work processes
  • Setting priorities correctly
  • Measurement of target achievement and, if necessary, appropriate corrective measures

As part of their delay strategy, numerous EU countries introduced stricter border controls in the second week of March 2020, causing kilometers of traffic jams and hours and days of waiting at their borders. There is little to complain about in defining the strategy itself. However, the practical implementation was and is partly pathetic and massively reduces the chances of success for the strategy. For example, there were far too few sanitary specialists at the border crossings, which considerably lengthened the lead time. The procedures for dealing with travelers changed from hour to hour, which overwhelmed numerous border guards. Truck drivers, bus travelers and people traveling by car were without food for hours and without any information from the border staff about the further procedure. The people then tried to find other information. The wildest rumors spread and the atmosphere among the waiting heated up. Meanwhile, one could see on the websites of the automobile clubs that the waiting times at the border are only about 1 hour. And the press conferences of the crisis teams were broadcast live on the radio, where civil servants and politicians patted each other on the back because of the perfect strategy implementation. When we finally arrived at the border control station, people were crammed together for hours. No longer a question of safety distance. Parts of the border guards were walking around with mouth guards, parts without. Numerous forms had to be undercut, but thousands used the same pens from the border guards. After crossing the border, one had to go to self-isolation or quarantine for 14 days. However, trucks and their drivers who were in transit were able to continue their journey without quarantine, but had to promise not to stop in the country of transit. This was not checked.

What can we conclude from the current handling of the corona crisis?

  1. Outstanding strategic management is an extremely demanding task
  2. A first-class strategy is not a guarantee of success if its implementation is not perfectly executed
  3. It depends on the people in general and the individual in particular. Everyone has to know what the goal is, know the way how it should be achieved and what he or she has to contribute to it.
  4. Communication is not everything. But everything is nothing without communication.

May we learn our lesson this time. It’s only a matter of time before we face an even more threatening crisis …

LSB

LSB Team

Luxembourg School of Business

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