By Linky van der Merwe

This article follows from the previous article: How to deal with COVID-19 as a Project Manager, published on 16 March 2020.

In light of this crisis, some of the best things a Project Leader can do, is to arm yourself with information and to be a pillar of strength for your project team(s).

By now we all know that the Coronavirus, known as the COVID-19 pandemic, has serious implications for economies all over the world and is causing a huge business impact in every country where it is spreading. Countries, organizations, and individuals are faced with extremely serious risks, uncertainties, challenges, questions, and decisions—in many cases existential in nature. It is important to arm yourself with accurate, comprehensive information to manage your organization and teams through this crisis by making informed, thoughtful decisions.

Let’s look with a broader lens before we try to understand the impact on project teams.

How to restart national economies

Recently McKinsey reported on the scenarios under which economies will need to restart, called: “How to Restart National Economies during the Coronavirus Crisis.“

Based on the rapid, exponential spread of COVID-19 across the world over the past month, McKinsey has revised its Scenario Analysis (as shared in the previous article) to include 9 potential scenarios. These scenarios capture outcomes related to GDP impact, public health response, and economic policies.

Stages of Recovery

Different countries have had different levels of success in handling this crisis, therefore McKinsey is proposing 4 stages of recovery readiness.

Overview of the 4 Stages of Recovery

To understand what state of readiness a country is in, the 9 scenarios are mapped to the 4 stages of readiness. The best prepared areas are in the upper right box.

For every country and territory, there is a path to recovery—before parts of the economy can be restarted, you must first slow the spread of the virus.  If you prematurely restart the economy prior to truly containing the spread, you risk re-starting the spread. Most countries expect to experience significant decline in GDP in Q2 of 2020, which would be the first time since WWII. In fact, GDP drops to its lowest point globally in Q2.

COVID-19 Scenarios Overview

Based on the COVID-19 scenarios, here are the proposed paths to recovery.

If you examine the Stage 2 scenario: A3-Virus is contained, which captures the situation where the virus is contained by mid-Q2, it is expected that public health containment and mitigation efforts, along with a seasonal decline, leads to a reduction in case load.

The result is that by the end of 2020, beginning of 2021, GDP will have recovered to the pre-pandemic levels for most countries.

Under the A1 scenario (medium virus spread), we endure a slow, global recovery—there is severe and large-scale human and economic impact.  Most countries will take over 2+ years to recover to the pre-pandemic GDP levels. In this scenario, the GDP shows a gradual U-shape recovery stretching multiple years.

Implication for Companies and Projects

If the Stage 2 scenario (A3-virus is contained) materializes in your country, you have the possibility that the economy should return to normal within a year, with little impact on larger projects and programmes that were able to continue, despite wide-scale lock-down measures in many countries. Of course many small projects would have been put on hold, postponed, or cancelled altogether due to the economic downturn.

However, in the event of a possible A1 scenario in your country, the slow economic recovery, may cause many planned projects to be postponed and multiple cost-saving measures are expected to be implemented by stable companies who will try to survice over the 2+ years that it will take the economy to recover to pre-pandemic GDP levels.

Our response

There is no point in panicking about the situation we as project practitioners are finding ourselves in. Rather prepare for the eventuality that uncertainty, challenges and difficult decisions are lying ahead for most companies.

In another McKinsey article: “Saving our livelihoods from COVID-19: Toward an economic recovery“, they state:

The pandemic could give rise to a new era of human development

McKinsey, April 2020

Recognise the impact of COVID-19 on people’s livelihoods. There will be an increase in unemployment and poverty. This means that some of your team members are experiencing a decline in household income that could last months. This will have a demoralizing effect on families and on teams we lead. We need to raise our awareness and focus on providing emotional safety to our teams. When people feel safe (a basic need) and still secure in their jobs, they will stay committed and motivated to work productively.

It will be the government’s responsibility to help companies to safeguard employment. People will be allowed to return to work under strict health protocols. We need to support those protocols in order to contain the virus and still stay economically active.We can expect that companies will make structural changes during the economic recovery period like leaner operations, digital and industrial reconversions, the introduction of new channels, agile organizational structures, digital innovation and innovative learning techniques. These changes will certainly have an impact on how projects are prioritized and executed in future. As project professionals we need to position ourselves to have market related skills to fill the demands of the recovering economy.

We need to work on being more resilient in these difficult time and keep developing our leadership skills. This is why I’m reading a book called: “Prosper!: How to Prepare for the Future and Create a World Worth Inheriting” by Chris Martenson and Adam Taggart. It gives specific, attainable steps you can take today that can limit your vulnerability and help you to live your life with greater purpose.

Keep yourself informed, be realistic, but stay positive while leading your teams as best as you can through these uncertain times. As long as value is delivered by projects and the outcomes serve companies and their customers, you will stay in high demand.

Please comment and let us know how you are dealing with the pandemic crisis. How are you supporting your teams through this? Share anything that will help others who are in the same predicament.

Please subscribe to Virtual Project Consulting not to miss future articles, tips and success stories!

Sources:

1. How to Restart National Economies during the Coronavirus Crisis. McKinsey, April 2020
2. Saving our livelihoods from COVID-19: Toward an economic recovery McKinsey, April 2020