Exactly one year ago, the pandemic caused by the SARS-CoV-2 virus hit the world like a giant thunderbolt, jolting the social-economic environment in each and every country to a halt. In the business space, many are those who did not understand what was about to happen or even what impact this “man-made” natural disaster would have on industry even as nations across the world went into lockdown status. Hardly a month earlier, the World Bank in its Kenya Economic Outlook Report for the year 2020 had ranked the country as one of the fastest-growing economies in Sub-Saharan Africa with a projected GDP of 5.9%.
By the end of Q1 2020, the growth curve had taken a sudden change in direction as things began to go south. The airline industry with its beehive of activity was literally brought down to earth even as government suspended all but essential international flight. Like a set of dominoes, mass cancellation of both airline and hotel bookings followed suite. Local road transportation especially of a PSV nature was not spared. The country lockdown status meant that there would be movement restrictions in and out of Nairobi, Mombasa and other select towns with the enforcement of a 7pm – 6am curfew to crown it all. For the first time, you could hear a pin drop in the vicinity of popular entertainment spots in Nairobi, and this situation was to last for the better part of the year. Schools and all institutions of learning were closed indefinitely.
But this VUCA curveball was one that caught many unawares, including corporate organizations with their robust risk management systems. Strategic meetings were held, quick decisions made and measures to cope with the new norm implemented though only reactionary. Aside from the stringent health protocols and a remote workplace regime which key organizations managed to implement efficiently, the “elephant in the boardroom” was how to keep the numbers flowing, as per budget and remain profitable amid sudden uncertainty.
By the end of Q4 2020 the economy was reeling from the effects of COVID-19 global crisis. Real gross domestic product (GDP) growth had decelerated to an estimated 1.0%. In the spectrum of things, the major impact was undoubtedly felt by the aviation, tourism and leisure industries. This directly affected hospitality and caused some big players to either shut operations temporarily or close shop altogether. Notable names include Hotel InterContinental Nairobi, Fairmont Norfolk, Mara Safari Club and Southern Sun Mayfair. A significant number of businesses recorded job cuts while some retained staff on reduced pay. Fortunately, the financial sector which is the backbone of the economy, generally maintained resilience however reported profit warnings based on an increased non-performing loan (NPL) ratio of up to 15% as at December 2020 (Fitch Ratings report).
Despite all the turbulence associated with the corona virus pandemic, there are innovative strategies that some organizations implemented with remarkable agility during this challenging period. This article considers three strategies and cases which stand out in comparison to others.
1. Digital Innovation
Following a Ministry of Health directive on 24th April 2020, all restaurants and eateries were required to undertake minimal operations while maintaining stringent measures in order to mitigate the spread of the virus. Some of these protocols would include redesigning spaces to limit diners to four people per 10 square meters, postponement or cancellation of events/banquets with 15 people or more and an enhanced focus on take-away orders. The significantly lower numbers of customers arriving at the premises each day, meant an unprecedented loss of business. This led to various operators in the sector winding up their business. A good example is Ranalo Upperhill, a popular fish restaurant in Nairobi, found it difficult to remain afloat.
The innovative strategy to be considered in this case is digital innovation to help maintain business continuity. Business continuity should always be at the top of management’s checklist and implementing digital channels is critical on this list. The partnership between Simbisa Brands (operators of Chicken Inn), and Glovo an on-demand food delivery service could not have come in handier. Suddenly, every other employee was working from home, and with Afya House sending stay-at-home messages to all who cared to listen, Glovo App sorted their needs. Customers could order their favourite combo from their phones or desktop and wait for delivery to arrive at their doorsteps conveniently.
2. A Sharpened Value Proposition
Stanton Chase, a leading global executive search firm notes that organizations should consider partnerships that can make the biggest positive impact on the business. Whether you are a public or privately held company, strategic opportunities for growth will crystallize in this new economic reality. It is therefore essential for management to explore areas of mutual collaboration with other key players in the industry.
Only five hours by flight from JKIA, located along the Arabian Gulf is Dubai, home of Emirates International Airline. Emirates became the world’s first airline to conduct on-site rapid COVID-19 testing. This was a quick blood test conducted on passengers before boarding at the Group Check-in area of Dubai International Airport and results would be available within 10 minutes.
Working with Dubai Health Authority and Dubai Airport, the airline was able to offer a critical service to their customers that enabled them to travel. By mid-April 2020, Emirates had resumed operations and was granted approvals to operate a limited number of flights to London, Frankfurt, Paris, Brussels and Zurich. While most nations remained in some sort of lockdown with virtually no air travel, the UAE flag carrier took the reduction in traffic as an opportunity to sharpen their value proposition “Hello Tomorrow”.
3. Finding Opportunities For Growth
Perhaps the award for innovative strategy during COVID-19 period goes to Kenya Airways. In a bold move towards remaining agile and ensuring business sustainability through challenging times, Kenya Airways made history by becoming the first airline in the world to re-purpose a passenger Boeing 787 Dreamliner into cargo transportation known as “Preighter”. This is an indication of innovation culture that the organization is trying to foster in response to changing customer demands and preferences. With the decline of passenger numbers to an all-time low, the airline was forced to ground multiple 787 Dreamliners while suspending many important routes, such as Nairobi – Amsterdam, and Nairobi – Paris.
The significance of this move is that it will support Kenya Airways in its recovery efforts to diversify revenues, and it will retain and create new jobs. More importantly, with the upcoming vaccination distribution, Kenya Airways has readily positioned itself to transport the vaccines destined for Africa and other destinations, thereby creating a competitive advantage for the national flag carrier.
“It demonstrates our agility, innovation and quick thinking as well as increases our cargo capability and capacity to keep essential goods moving across the globe,” said Allan Kilavuka, Kenya Airways MD. It is worth noting that the Kenya Airways Preighter was an idea that was generated by staff. An ideation process had been initiated among KQ colleagues and a virtual hub known as the Fahari Innovation Hub set up for the purpose of exploring innovative strategies and ideas.
“The real source of wealth and capital in this new era is not material… it is the human mind, the human spirit, the human imagination, and our faith in the future” – Steve Forbes.
The writer is a management consultant with Global Strategy Consultants. He can be reached on victor.kottonya@gsconsultants.co.ke
