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Coronavirus responsible leadership USB

Responsible leadership in the time of Corona

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Responsible leadership in the time of Corona

Coronavirus responsible leadership USB
Source: https://www.pexels.com/photo/couple-of-hands-2838506/ | Fotografierende

  • APR 03
  • Tags Responsible leadership, Lockdown, Compassion, COVID-19, Coronavirus, Hope

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USB’s Prof Mias de Klerk provides practical guidelines for responsible leadership during the time of COVID-19.

The world is in a crisis as the Coronavirus is creating havoc in all spheres of our existence. There is no one who can escape this disruption and we all have to deal with it in various aspects of our lives. This unexpected pandemic does not only test our physical strength health, but also our mental strength as individuals and leaders. In the time of COVID-19 we are challenged how we choose to take up our leadership role and the extent to which respond to it with responsibility.

…everyone is a leader and everyone is a follower. In dealing with this emergency, we must follow the leadership of others on many aspects.

Leadership does not only refer to someone in a formally appointed position. Rather, everyone is a leader and everyone is a follower. In dealing with this emergency, we must follow the leadership of others on many aspects. Yet, on many other aspects, everyone must provide exemplary leadership to others, perhaps at home, at work, or even when we are at the grocery shop. We all have leadership roles that we all can fulfil or neglect, take up or deny. The word ‘responsible’ originated from Latin, meaning to be answerable to another and to be accountable for one’s actions. With responsibility comes a liability, a liability to be held responsible and accountable for what we do, how we do it and to honour an obligation to be reliable and trustworthy. This is a huge and demanding task, even in the best of circumstances.

With responsibility comes a liability, a liability to be held responsible and accountable for what we do, how we do it and to honour an obligation to be reliable and trustworthy.

Without repeating the detailed context of the COVID-19 crisis, which is well articulated and explicated in formal and social media, it is necessary to reflect on some of its psychological consequences. The outbreak of COVID-19 renders projected disaster to economic for many economies, organisations and communities as countries and industries lockdown. It demands self and social isolation as a result of the high risks of contagion and health problems, even death. These dynamics transmute into panic, fear and apprehension as business and individuals face potential illness and mortality, a loss of income and even bankruptcy. Panic and fear augment individuals’ anxiety, stirring anger and fears about the virus and certain populations. Uncertainty blossoms as the crisis escalate without a clear solution in the foreseeable future. A vicious circle of fear, anxiety and uncertainty develops that must be broken. Although there is no magic solution to COVID-19, responsible leadership and acting responsibly can go a long way in breaking the vicious circle and helping individuals to deal with it.

The Coronavirus has no awareness of itself or its impact. It simply flourishes where the ecosystems of nature and humanity allow it to do.

In an organisational context, boards and executives, are confronted with uncomfortable decisions. While operational continuity may be at risk, human dignity is of equal importance. What does it mean then to be honest, respectful, responsible, fair and compassionate with employees, customers and suppliers, to name the most prominent stakeholders, when navigating your way through the pandemic’s potentially devastating impact?  

While there are several professional contexts that we can potentially think about, we must spare a thought for the healthcare profession in a time such as this. While duty positions them in eye of the Coronavirus storm, they have to deal with the anguish of worried and potentially infected people, treat every patient with equal respect, provide a clinically safe treatment space for the sick and the healthy, make difficult decisions about the allocation of scarce medicinal and other treatment resources, and maintain their own capacity for nurture at the same time. 

Although there is no magic solution to COVID-19, responsible leadership and acting responsibly can go a long way in breaking the vicious circle and helping individuals to deal with it.

A few practical guidelines for responsible leadership that apply to all of us during the time of Corona:

Serve and unite

During the crisis of Corona, everyone needs to realise that this is not to a time for selfish benefit. Rather, it is a time of selflessness, to put one’s own desires and aspirations on the back burner, to serve, and to be useful to others. Find others who are in need and help them deal with their respective difficulties. It is now the time to unite with people across the divides of organisations, communities and countries. Blaming others and projection of one’s anger or anxiety to others who became infected elsewhere and are placing you now at risk are of no use. We are all in this together, and only together will we conquer it and move beyond this emergency to better times.

Which leads to the next point:

Accept and go forth

There is no use to sulk about the situation that we are in or projecting blame for its happening. It happened and it is what it is. We cannot change the lockdown, but we can change how we act and behave in it. Although the virus and its nature are not in our control, it is in our control how we react to it. As Viktor Frankl, the Jewish psychiatrist who was incarcerated in the Nazi concentration camps realised: “Everything can be taken from a person but one thing – the last of the human freedoms – to choose one’s attitude in any give set of circumstances, to choose one’s own way.” We cannot wish away the virus or the disruption that ensues, but we have a choice of action and reaction to it. However, we always have a choice of how we act and react to the situation and its challenges. Trying to circumvent the lockdown restrictions with rationalisation or intellectualisation, trying to find and exploit loopholes in the governments instructions are serving nobody. It’s been a long time since the serenity prayer was as applicable as it is now: “Grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.” Stop denying your responsibility to live and act safely and accept the proscribed guidelines provided by leadership.

Act decisively, but with wisdom

Apart from accepting what one cannot change, there are things that one can change. In these cases, COVID-19 require us to act decisively, but with wisdom. Do not waste time in making the right decision to change what you can for your organisation, team, or community. All of us will have to make difficult decisions, whether it is about ourselves or others. This is even more important for those in formal positions of authority. Responsible leaders act decisively in doing what is right to guide people and prevent further infections, but with wisdom. One of my students always quote H.L. Mencken: “For every complex problem there is an answer that is clear, simple and wrong.” The situation we are facing are too complex for simple solutions; think carefully and act wisely in all you do.

Demonstrate compassion

Now is the time to demonstrate compassion for others, acknowledging and deeply feeling individuals’ fears, anxieties and dire realities, with a desire to alleviate their suffering. Compassion goes beyond cognitive knowledge about the economic impact of the lockdown and its realities. As important it is to inform people how to avoid contagion and to provide appropriate sanitisers and protective equipment, we have to go beyond this to provide emotional support. Compassion is about connecting with another person, knowing the person is suffering and identifying with the suffering. People are scared about the impact of the health risks of the virus, anxious about being able to pay the bills, uncertain as to what the future holds in for them. This is not time for platitudes, clichés of superficial messages of hope. When individuals realise their leaders and others who they hold in high regard understand and have empathy for their suffering, they are much more likely to respond constructively in how they deal with the situation.

Have the courage and strength to be vulnerable

Vulnerability stands opposed to fantasies of being the strong leader who is in absolute control and has all the answers. Responsibility requires leaders to have to courage to be vulnerable in dealing with the many dilemmas that Corona and the lockdown are demanding. We have seen enough evidence in the last month to know that we don’t know, and things can change daily. We can react to this situation by panicking, or being a beacon of strength and calmness. One has to acknowledge one’s own uncertainties and anxieties, yet provide and create hope rather than promoting despair. The courage to be vulnerable assist one to accept accountability for one’s actions and failures, to accept the fate of one’s communities and institutions, and to assist them through the crisis. It is only when we have the courage to be vulnerable that we have to inner strength to lead with calmness to reduce and contain panic.

Provide hope, but realistically

Napoleon has been credited to have said, “Leaders are dealers in hope.” We all look up to our leadership figures as symbols of hope and comfort. Indeed, we even project messianic expectations onto them to rescue us from the suffering that we face. Providing hope does not come from superficial statements of hope, for instance, “Everything will be OK”, or “There are many opportunities to gain from this crisis”. Hope comes from acknowledging and facing the problems head-on. This does not require one to become a superhuman being, but rather to become person who Frankl calls “homo patiens” – the suffering person who knows how to mould his or her sufferings and those of others into an achievement. Responsible people in the time of Corona are beacons of hope, individuals who inspire others in the way they walk their talk as role models.

A period of difficulty that challenges our mental and physical strengths is a challenge of character. Crisis does not build character but exposes it. The only question is, “What kind of character will each of us demonstrate during this time of crisis?”

The sort of leader and person one will become during this crisis is the result of an inner decision, not the result of the situation. Let this crisis be the epiphany of being responsible and demonstrating responsible leadership. When next generations reflect back on the time of Corona and those involved, let the words of Winston Churchill come to mind: “Never was so much owed, by so many,  for being such responsible individuals” (revised by the author).

Prof Mias de Klerk is Head of Research at the University of Stellenbosch Business School (USB).

 

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USB News caring for covid-19 caregivers

Caring for caregivers

USB News

Caring for the caregivers

USB News caring for covid-19 caregivers
Photo by Anna Shvets from Pexels (Source: https://www.pexels.com/photo/blue-medicine-pills-on-heart-shape-3683046/)

  • APR 02
  • Tags COVID-19, Coronavirus, Medical personnel, Healthcare, Leadership, MBA, Medicine, Pandemic

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Prof Renata Schoeman, Head of the MBA Health Care Leadership programme at the University of Stellenbosch Business School (USB), reminds us not to overlook the care that medical staff need during COVID-19.

 As the Coronavirus pandemic ripples throughout the world, the pressure on medical personnel is mounting. To date, between 8% and 30% (depending on the country) of health care professionals have tested positive for COVID-19.

To date, between 8% and 30% (depending on the country) of health care professionals have tested positive for COVID-19.

Professor Renata Schoeman, Head of the MBA Health Care Leadership Programme at USB, says that the rapid spread of the virus has an enormous impact on medical professionals. She urged health care sector leaders to be aware and take measures to protect their staff, while health care workers need to be vigilant and take care of their own health while also taking care of patients.

“In an already stretched, under resourced environment, medical professionals are finding themselves powerless. They are suffering from fatigue, longer shift hours, guilt as they are not able to assist everyone, fear of running out of supplies and ventilators, and fear for their own health as well as putting their own families at risk. They are torn between ethical professional duty and the instinct to protect their own.”

In an already stretched, under-resourced environment, medical professionals are finding themselves powerless… They are torn between ethical professional duty and the instinct to protect their own.

A recent study in the COVID-19 epicentre in China, the first on the psychological impact of COVID-19 on health care professionals,1 found that 70% of the 1257 medical workers interviewed had experienced psychological distress, while 50% developed depression, 45% anxiety disorders and 35% battled with insomnia. Nurses at the frontline were at highest risk of developing these symptoms (60% of the sample across 34 hospitals were nurses and 40% doctors, while 70% were female and 30% male.)

“These symptoms may linger on long after the COVID-19 pandemic has passed,” says Prof Schoeman. “In addition, the current lockdown can further add to the psychological distress people are experiencing across the community at large, including mental health care users, and healthcare professionals.”

She says that in addition to their stressful experiences at work, health care professionals have to care for their own families.

“After a long day, they still need to take care of their children, family or elderly parents, with the fear of potentially exposing their loved ones to the virus. The public usually views health care professionals as resilient and not needing support.

The public usually views health care professionals as resilient and not needing support.

“There is also a stigma during times like this, where people avoid you, not just physical distancing, but out of not knowing what to say during this time, especially if the professional works at the frontline in high risk areas.”

Prof Schoeman says the solution lies in professionals taking care of themselves during this time, and in health care managers being aware of the stress staff are facing, and providing support.

“Acknowledge and accept feelings of anxiety and fatigue and allow yourself to normalise these feelings. Reach out to colleagues facing the same battle and provide mutual support. It’s now more than ever important for medical professionals to ensure a healthy diet, get enough rest, to exercise, and to connect with others via online virtual platforms.”

It’s now more than ever important for medical professionals to ensure a healthy diet, get enough rest, to exercise, and to connect with others via online virtual platforms.

She said leaders in the health care sector should be providing both the necessary practical support for staff to fulfil their duties in terms of equipment and medication, as well as emotional support through debriefing and counselling sessions.

Medical staff can be rotated between higher and lower pressure areas to give some sense of relief and flexibility.

“Communication is crucial. Uncertainty causes anxiety. Leaders need to communicate daily with their teams and provide accurate updates and strategies to cope with the crisis. The pandemic will not be over in a fortnight nor will it last forever and leaders need to think long term. And they need their medical personnel for the long haul – supporting and protecting them now is fundamental,” Prof Schoeman said.

The pandemic will not be over in a fortnight nor will it last forever and leaders need to think long term. And they need their medical personnel for the long haul.

Across social media, the message to the public from medical professionals has been clear: “We stay at work for you and your family, please stay home for us and our families”.

Prof Schoeman says that it’s vital for the community to support and encourage, not stigmatise, medical professionals during this time.

“Don’t avoid your friends who are out in the field! Connect with them on online platforms and never underestimate kind gestures such as ‘thinking of you’ and ‘thank you’. Buy them groceries and leave it at their door or do a virtual homework session with their children.

“Please don’t make their work even harder by spreading and sharing fake news. It can really break the spirit for someone that tries to help patients based on sound scientific principles. Rather share hopeful and positive stories of recoveries and post inspirational messages instead of doom and gloom.”

RESEARCH

  1. (Lai et al (2020) https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2763229)

 

Prof Renata Schoeman | Head: Health Care Leadership MBA, USB

Renata Schoeman has been in full-time private practice as a general psychiatrist since 2008. As a psychiatrist, she has special interests in cognition and has been particularly active in raising awareness for ADHD in adults and children. She also holds appointments as associate professor in Leadership (USB), as head of the Health Care Leadership MBA specialisation stream, and as a virtual faculty member of USB Executive Development’s Neuroleadership programme.

She serves on the advisory boards of various pharmaceutical companies, as a director of the Psychiatric Management Group (PsychMG) and is the convenor of the South African Society of Psychiatrist (SASOP) special interest group for adult ADHD, and co-founder of the Goldilocks and The Bear Foundation.

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Life after lockdown

USB News

What does life after lockdown look like for business?

  • MAR 31
  • Tags COVID-19, Coronavirus, Lockdown, Economics, Corporate finance, Business, Development Finance, Industry, Investments, SARB, Moodys, EBITDA

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Guest lecturer in corporate and development finance at USB, Jason Hamilton, forecasts the covid-19 21-day nationwide lockdown will have on South African industry.  

The global COVID-19 pandemic has made its presence felt in South African retail and consumer-focused businesses, especially in tourism and hospitality, but the full impact on earnings, cash flow and employment will last far longer than a three-week lockdown.

With the 21-day nationwide lockdown in place, the full effects will now ripple through all sectors and industries at least until the end of this year – in an “economic cycle like no other we have ever seen”, says University of Stellenbosch Business School (USB) guest lecturer in corporate and development finance, Jason Hamilton.

Hamilton, a director at First River Capital, said with the South African economy already under severe pressure – the SA Reserve Bank (SARB) having revised its GDP forecast down to 0.2% for 2020 – it was expected that the impact of slowed-down global growth (expected to contract by 2.1%) due to the pandemic would see South Africa’s GDP retracting by between 2.5% to 3.5% with some models estimating up to 5%.

Moody’s downgrade of South Africa’s credit rating on Friday (27 March) would result in further outflows which the country can ill afford, he said, and the cost of debt would increase.

“Up to the lockdown businesses were able to trade and generate some earnings to keep the lights on, keeping employees employed and earning some level of income. A total lockdown will bring significant retrenchments across all sectors and industries, with cashflow and earnings under threat in businesses of all sizes.

A total lockdown will bring significant retrenchments across all sectors and industries, with cashflow and earnings under threat in businesses of all sizes.

“It is also looking likely that some form of control and restrictive measures will remain in place for months to come, which means we will be dealing with this until the end of the year – even if we look to China, which now has a flattening curve, they are more than five months into the battle against the disease while trying to keep their economy alive,” Hamilton said.

Data from the last 11 global recessions indicate that it takes on average a year-and-a-half for the economy to start recovering, but the current economic cycle is unlike any other.

“Recessions we have seen, and we have traded through them, and the average of 18 months to the start of recovery in theory gives us a timeline to follow. But the market sell-offs and economic cycle (reduced GDP growth or recession) we are busy entering is based on an event, not on fundamentals or underlying economic systems issues, which means it’s very difficult to predict how long and how impactful it will be.

“What we can, however, focus on is that it is event-driven and hence the recovery and comeback should be quick, the question is just when,” said Hamilton.

Interest rates – room to move

Unlike many developed economies where interest rates are already close to zero, Hamilton said it was a positive that the SARB still had “significant room to provide support of at least 300 basis points” even after the repo rate was lowered by 100 basis points, as the inflation outlook remains within the target midpoint.

“We have seen significant cuts in short succession from the economic powerhouses (US, UK, Germany, France etc) acting very quickly, which further supports the view that South Africa has further room and drastic action can and should be taken. The balancing act is, however, on inflation targeting and the exchange rate,” he said.

Access to liquidity will be key in the months ahead, he said, which would require direct action from government.

“Credit will need to be extended and/or restructured to individuals and companies to bridge cash flows as the trading environment tightens or, as in the case of a lockdown, grinds to a halt for many industries. This will require support from government, and the announcement by President Cyril Ramaphosa of the first phase of these is to be welcomed.”

…even if we look to China, which now has a flattening curve, they are more than five months into the battle against the disease while trying to keep their economy alive

Government & business support welcomed

Hamilton said the use of the tax system to assist firms with liquidity at the employee level by fast-tracking claims and reimbursements, and to delay up to 20% of PAYE for smaller businesses, was a positive move that would assist business – and recommended that further stimulus could come from deferment of VAT, provisional and income tax, and a higher percentage of PAYE deferred.

“The clear focus on SMEs and vulnerable sectors like the informal sector, with establishment of the independent Solidarity Fund, will support the public sector’s efforts and it is hoped that large businesses will follow the lead of the Rupert and Oppenheimer families which have allocated R1-billion each to the support initiatives,” he said.

Financiers (banks) have indicated their commitment to the national efforts and Hamilton said this would entail case-by-case restructuring of loans, likely through payment holidays or deferments to assist companies (and individuals) with three to six months’ grace to improve the underlying cash flows.

“This has been made slightly easier through relaxed regulatory requirements to free up head room from a capital holding point of view.

“Last week we saw the SARB taking further action to provide liquidity to the market through an active bond buying programme announced and increasing its refinancing operations to 3 months; and it’s likely that we will shortly see longer tenors on offer of 6 and 12 months,” Hamilton said.

Highlighting the knock-on effect of the economic challenges, he said further clarity would be needed in the real estate sector, as landlords would need the support of their funders or backers if they are to assist tenants with rent moratoriums.

The clear focus on SMEs and vulnerable sectors like the informal sector, with establishment of the independent Solidarity Fund, will support the public sector’s efforts…

Similarly, some firms might be able to approach their insurance companies with claims for loss of income, although this will in turn place the insurance companies under threat and likely facing liquidity concerns themselves.

National finances

With South Africa’s budget deficit projected to be just under 7% of GDP by 2021, the national finances are already under great pressure, Hamilton said.

Moody’s previously hinted towards giving South Africa time to recover, however any runway is now gone with the impact of the pandemic felt globally, and as such on Friday (27 March) they downgraded the country to below investment grade (Ba1) and maintained a negative outlook.

“A downgrade will result in further outflows which we don’t need right now, with foreign investors selling more than $41 billion in emerging market stocks and bonds since the beginning of the year, which is double that seen during the 2008 financial crisis,” Hamilton said.

There is slight reprieve, he said, in that the other ratings agencies have since 2017 rated South Africa as junk, which has seen investors price and treat the country as such since then, which has come through in the spreads of the credit default swap (CDS) markets.

“Although with this downgrade the debt cost will increase,” he said.

He said government remained in a difficult position with a projected 6.8% GDP deficit, about R370bn, to address, and “now also a stimulus package required to limit or soften the blow of the COVID-19 pandemic”.

“Moody’s in its statement reviewed this number up to 8.5% although in my view it will likely be at 10%, which means SA will over the medium term require much higher debt levels than previous modelled and for much longer,” Hamilton said.

Although economies around the globe have made available funds of between 1% to 4% of GDP, he said it was unlikely that South Africa would require the upper limit of such stimulus – “but this still implies a need of between R80 billion to R170 billion”. The UK and Germany have announced stimulus of at least 15% of GDP and the US 30%.

A downgrade will result in further outflows which we don’t need right now…

“The impact will be felt but most of these funds could be sourced from within the current budget through reallocation of non-essential or non-critical spending. Yes, there is an element of borrowing from the future in this strategy, but current circumstances require drastic action, this is also in line with what we are seeing globally.”

Economic sector outlook

Accommodation and travel booking cancellations are the “first wave” of the impact on the tourism sector, with effects now moving into the hospitality sector, such as restaurants, bars and coffee shops.

The manufacturing sector has seen some factories close and Hamilton said it was likely that many would retool to assist with the manufacturing of medical equipment.

“The agricultural sector is a key driver of the economy and very reliant on international trade. As they are in the food supply chain, they will maintain a level of trading although with all the markets globally also facing a recession or lockdown, luxury agricultural products will suffer while staple foods are set to show more resilience,” he said.

Consumer-focused businesses will remain attractive for investors, Hamilton predicts, with those that have adopted online strategies “likely to weather the storm successfully as they have managed to adapt or pivot quickly in the response to the crisis and are best placed for what might be a big shift in buying behaviour post the pandemic”.

The key growth driver has been the Business and Financial Services sector and as they are also positioned to service clients remotely, they are likely poised to be able to bounce back quickly.

“The only sectors that will not be affected, or suffer the least damage, will be the essential service providers, being the food suppliers, food and medical supply chains and medical support providers,” he said.

No sector is immune to the impact and fall out of the crisis and survival has a lot to do with cash reserves and low debt positions, hence firms with net debt to EBITDA of less than one and healthy pre crisis operating margins are best placed to navigate the next few months successfully.

No sector is immune to the impact and fall out of the crisis and survival has a lot to do with cash reserves and low debt positions,

Investors

“How investors will navigate this crisis from an investment and cash flow management point of view, is also an important consideration. Globally, and this holds true for South Africa as well, there are significant amounts of capital allocated for new and follow-on investments – available capital sums are at historic highs.

“This also suggests that investors in SME’s and other private businesses, and the listed space as well, have the ability to inject further funds through debt and equity packages into investee companies to support and navigate the coming months,” Hamilton said.

This will have a lasting impact on the companies’ finance and potentially their shareholding structures, as any equity raised or injected will come with very specific conditions.

He said some of the development finance institutions (DFIs) active on the continent had specifically stated their support to investee companies in ensuring employees can be supported through these times. Similarly, in South Africa, the IDC and the Department of Trade and Industry have allocated R3-billion for specific investments in critical businesses, with applications to be fast-tracked.

Hamilton concludes that “2020 is viewed as a lost year for many but we also have to look back in history and see what has been overcome before.

“It is up to all of us, the people and nation of South Africa, to unite and jointly fight this pandemic and with government, business and the public aligned we will overcome.”

Jason Hamilton is director at First River Capital. He has over 15 years of experience in the banking and the financial services sector where he focused on corporate finance, project finance, leveraged and acquisition finance. He is Guest Lecturer on USB’s Development Finance Programme, present on Capital Raising for Public and Private Projects. He is also Guest Lecturer on USB’s MBA programme, present on Corporate Finance, Mergers & Acquisitions and Funding Strategies. He serves as Faculty at USB Executive Development, and Facilitator for USB’s International Affairs programme. He has been appointed to the Thought Leadership and Business Ethics Committee of AICPA (The Association of International Certified Professional Accountants) | CIMA (Chartered Institute of Management Accountants) effective 1 June 2020.

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Why the nonchalance?

USB News

Why do people continue to be nonchalant about COVID-19?

  • MAR 30
  • Tags COVID-19, Coronavirus, Pandemic, Nochalance, Citizens, New York Times, Fabacademic, Marketing, MBA, Futures Studies

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Owen Mbundu, Head of Marketing at USB, provides possible explanations as to why citizens are not reacting to the Coronavirus pandemic with the necessary seriousness.

At the time of writing this, the death rate caused by SARS-COV-2, the virus that causes COVID-19, has raced past the astonishing figure of 21000 with no immediate slowdown on the horizon. A third of the world’s population is currently under some degree of government-enforced lockdown, and more world leaders are contemplating similar action. On Monday 23 March, President Ramaphosa too announced South Africa would go into lockdown, and that the military would patrol our streets.

If the Chinese, Spanish and South Koreans forewarned the world about the ravages of COVID-19, why did more citizens globally not listen to the warnings from experts, and opted for voluntary measures like social distancing to avoid getting infected? Why are governments compelled to implement far-reaching measures like lockdowns to save lives?

A third of the world’s population is currently under some degree of government-enforced lockdown, and more world leaders are contemplating similar action.

For example, on the very day that the French President almost begged his citizens to stay home, thousands spent the day shopping in crowded areas and going about their daily lives as if nothing had happened. Four days later, he announced a lockdown.

The New York Times reports that even after the rapid increase of infected people in the US, drone images showed amusement parks and beaches bustling with people.

In South Africa, many continue to display risky behaviour like socialising at home or at restaurants and congregating in groups – this in a country where the infection rate has ballooned from 62 to over 1000 in a matter of days.

Why are people so nonchalant when the news, social media and the internet are awash with warnings about the deadliness of COVID-19?

One plausible explanation for this seemingly irrational behaviour is the biases and heuristics that influence our perception of risk. The availability heuristic made famous by behavioural scientists Richard Thaler and Cass Sustein comes to mind. According to the availability heuristic, people assess risks based on how readily they come to mind. In the words of the authors, “If people can easily think of relevant examples, they are far more likely to be frightened than if they cannot”. Salience is closely associated with the availability heuristic, meaning if one has personally experienced an event, you are likely to believe it exists than if you had only read about it. The fact that COVID-19 was initially positioned as a far-flung Chinese problem that may or may not one day reach South African shores arguably influenced our collective assessment of the risks involved.

…this is a time for our personal freedoms to take a backseat if we are to turn the tide on the COVID-19 pandemic.

Syon Bhanot provides a second explanation that ascribes our nonchalance to COVID-19 to psychological reactance. Jack Brehm, who pioneered the concept, argues that when people believe their freedoms are at stake, they are motivated to regain it. We observe this phenomenon in people who, when instructed to do one thing, feel compelled to do the opposite. This human oddity is even present in children. Parents would know: When you tell a child “Don’t jump into the pool”, that is what they will end up doing. Psychological reactance is mainly present in societies that place a high value to individual freedoms. Western nations like the US, UK and Western Europe are therefore prime candidates for people who ignore warnings or sage advice from experts. In Bhanot’s words, “Our desire to push back against sound advice is driving us toward behaviours that will strengthen the public health tsunami that is just around the corner”. Autocratic countries like China, where compliance takes precedence over individual freedoms, are the opposite.

In the current time, psychological reactance further aggravates the growing antipathy towards intellectuals, the ‘elites’ who think they know what is best for the masses. Here, Brexit comes to mind.

What can governments do to counter the pernicious effects of the availability heuristic and reactance?

First, to counter the availability heuristic, not only is frequent information sharing necessary; governments may have to communicate more regularly the adverse consequences of non-compliance by drawing parallels with countries where adherence is low. Unfortunately, soon there will be many such examples to draw from. Also, South Africa must do more to ensure relevant information reaches all its citizens by communicating through the correct channels and in all 11 official languages, including none verbal languages. Proper communication will go a long way to counter a plethora of dangerous misinformation making the rounds.

Unfortunately, there is no magic wand; we all have to act responsibly. An excellent place to start is to listen to warnings from experts and practise social distancing.

Second, individuals should reflect on their attitudes and responses to directives from the government: Are these logic or reactance based?

Third, eminent people in society should model desired behaviours and encourage others to do the same. Fortunately, some prominent people have responded in this regard, as evidenced by many social media platforms, such as FabAcademic on Twitter. Famous people may also play an essential role in countering the risk of stigmatisation following infection by sharing their status should they test positive. The British royal family clearly understood the autokinetic effect on society that the royal establishment has by announcing the positive COVID-19 result of a family member. In South Africa, where HIV positive people are continuously stigmatised, this could save lives.

Fourth, this is a time for our personal freedoms to take a backseat if we are to turn the tide on the COVID-19 pandemic. It is time for everyone to heed the warnings from the government; not doing so could cost many lives.

New York Times reporter Donald G. McNiel Jr recently argued that if we had a magic wand, and could freeze everyone in the situation (at least at a safe distance), we could stop the transmission of the virus immediately. Many would still be sick, but COVID-19 would disappear overnight. Unfortunately, there is no magic wand; we all have to act responsibly. An excellent place to start is to listen to warnings from experts and practise social distancing.

 

Head of Marketing USBOwen Mbundu is the Head of Marketing/Marketing Director at the University of Stellenbosch Business School (USB). He holds an MBA and a Postgraduate Diploma in Futures Studies (Cum Laude) from USB.

 

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From COVID-19 to a recession

USB News

From COVID-19 to a global recession: What’s next for Africa?

  • MAR 23
  • Tags COVID-19, Coronavirus, Global recession, Development Finance, Africa, Johannesburg Stock Exchange (JSE), SMEs, USA, China

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MPhil in Development Finance final-year students at USB, Livingstone Banga and Nii Darko Otoo, explored the connection between the spread of COVID-19 and a global recession. They delved into how this devastating domino effect could impact the future of Africa’s development. This article first appeared on the online publication The Zimbabwe Independent on 20 March 2020.

Historically, the world has experienced a recession, on average, once every decade. The major and most recent ones were the 1975 recession caused by the rising oil prices of the Organization of the Petroleum Exporting Countries (OPEC); the 1982 recession, which came about as a result of the United States Federal Reserve’s tight monetary policy to combat rising inflation; the 1991 recession caused by the oil price shock, and loss of consumer and business confidence; and the 2009 recession caused by a subprime mortgage crisis.

Global recessions do not just happen; they send warning signals.

A global recession happens when most or all of the world economies experience a slowdown in economic activity at the same time for an extended period of time. Global recessions do not just happen; they send warning signals. Certain economic indicators – such as unemployment trends, increased inflation rates, a slowdown in international trade, and an inversion of the yield curve in the bond market – have proven over time to predict a looming global recession.

The US unemployment rate has been hovering below 4% for the past year, reaching a 50-year low of 3,5% four times during the past 12 months. In the previous four recessions, unemployment rates reached record lows of below 6% when these recessions were striking. The US-China trade has been dropping over the past two years with a drop of close to US$200 billion in value in 2019 alone.

The yield on long-term bonds should have a higher yield than the yield on short-term bonds. When this economic principle is broken, a recall on long-term financial commitments to invest in short-term securities unsettles the market and a financial crisis (illiquidity) is bound to happen as borrowers will need to pay immediately what could have been long-term payables.

The yield on a US 10-year Treasury Note fell below the two-year bond’s yield several times during the past year, thus prompting some investors to recall their investment in long-term securities. This phenomenon, called an inversion of the yield curve, usually precedes a recession.

The global economic giants US and China have been waging trade wars on each other over the past year. Although they seem to have found a compromise, the economic impact of the exchanges was adverse for the global economy. These and other indicators have reached recession levels for over a year, and the global recession has long been overdue.

What can trigger a global recession?

The world’s second biggest economy, China, has been hit by coronavirus (COVID-19). This is a Severe Acute Respiratory Syndrome Coronavirus-2, a new strain that had not previously been identified in humans. As a new virus, no vaccine has been identified as yet and, according to US health experts, it will take at least a year to produce one. COVID-19 has spread from China to over 176 countries in less than 60 days. Over 60 million people have been quarantined in China and over 16 million people have been quarantined in Italy.

The International Energy Agency (IEA) expects global demand for oil to be down 2,5 million barrels per day, highlighting a slowdown in global economic activity. China oil demand went down by 1,8 million barrels a day, year-on-year, in the first quarter of 2020, indicating a major slowdown in Chinese economic activity.

Most economic activities have been suspended or banned in China, Italy and across the world. The US and China control close to 40% of the world’s economy and the two countries’ trading activity is also the highest in the world. Any adverse or positive economic activity in these two countries is set to have a ripple effect on the global economy.

Africa’s response to past recessions

Africa has its own challenges, which include having the lowest human capital development in the world, inadequate public infrastructure, poor governance, and energy and water problems. Over the past century, Africa has become interlinked with the world economies as developments in technology and transportation have made it easier for the movement of people, goods and services. Any negative economic activity on the global scale is sure to make Africa as a continent feel the effects as well.

Historically, statistics indicate the inability of the African continent to buffer itself against such a phenomenon.

Historically, statistics indicate the inability of the African continent to buffer itself against such a phenomenon. In the 1981-1982 recession and the 1991-1992 recession, sub-Saharan Africa’s Gross Domestic Product (GDP) was -0,2% and almost -2% respectively. Sub-Saharan Africa was not excessively affected by the 2008-2009 recession as its GDP dropped, but still remained in the positive at over 3%.

Global trade wars, such as the US-China trade war, including additional barriers imposed to reduce international trade, are causing a decline in economic growth in many countries. Import and export disruption is beginning to be felt worldwide, especially in the electronics sector and motor industry given China’s major role in components manufacturing and assembling. Within these past few weeks, commodity prices have come under pressure with crude oil prices plunging to 2008-2009 levels.

Can SA and Zimbabwe cope?

South Africa, one of Africa’s biggest economies, managed to buffer itself against previous global economic shocks. However, the political and economic environment in the country has drastically changed since the last recession.

The most possible scenario will be the scrapping of the local currency like what happened in the 2008 – 2009 period. A combination of poor health facilities and an unfavourable economic environment will sink the country deeper into both economic and social mess.

Budget deficits, electricity shortages, debates of land expropriation without compensation, political bickering, among others, have unsettled investors, negatively affecting the country’s economic prospects and also making the country susceptible to global economic shocks. The environment is aggravated by the COVID-19 virus global pandemic. South Africa has recorded 174 confirmed cases as of yesterday (20 March 2020). With a slowdown in global trade over the past month, the rand has weakened from about R14,80 to the US dollar in early February to R16,81 at the time of publication. It is expected that the rand will devalue further if the effects of a global recession sink into the already volatile economy.

The Johannesburg Stock Exchange-listed companies lost a significant percentage of value recently and the downward spiral is continuing. After recording 61 confirmed cases of COVID-19, of which 10 cases were local transmissions by 17 March, the South African government has set stringent measures which included a travel ban on tourists from high-risk countries, border closures, school closures, and limitations on crowd gatherings, among others, to combat the spread of the pandemic.

Will Zimbabwe follow suit or it will have to wait for COVID-19 cases to be confirmed? Will Zimbabwe be able to handle 100 cases or more of the COVID-19 virus and how will the largely informal market, which depends on South African imports, respond to a closure of the Beitbridge border post?

Weak African economies such as Zimbabwe are likely to face the severe brunt of the effects of a global recession and coronavirus. Around 75% of Zimbabwe’s total exports and 40% of its imports are done with South Africa. Any slowdown in the South African economy is most likely to negatively affect Zimbabwe.

Zimbabwe has not been economically stable for the past two decades and a global recession is set to have tremendous effects on the economy and the people who live in it. Previously recorded data indicated that the country’s GDP hit extremely low levels during global recessions.

In the 1981-1982 recession, GDP fell from about 13% to 3% in 1981 and 1982; in the 1991 global recession, GDP fell from roughly 5,5% to -9% in 1991 and 1992, and in the 2007-2008 global recession, GDP fell from -4% to -18% in 2007 and 2008.

Based on historical experiences, the country has lost about 10% of GDP every time a global recession has happened. With the GDP growth hovering below 4% for the past four years and a global recession looming, Zimbabwe can expect its GDP to fall by more than 10% this year alone as the underlying conditions have changed for the worst.

The country is facing a myriad of problems like daily electricity blackouts in most parts of the country, poor water quality and distribution in most cities and towns, and high unaffordability of telecommunications by the general populace. When the economy contracted in recession times, energy, communication and water crises were not as bad as it is at the moment. The current infrastructural and affordability gap is disastrous for the country and the ordinary inhabitant.

The local currency has been losing value from an exchange rate of ZW$3 to the US dollar in early 2019 to the current bank rate of ZW$18 to the US dollar or informal black-market rate of ZW$45 to the US dollar. The chances are high that such an unstable currency will lose more value when a global recession comes into play. The most possible scenario will be the scrapping of the local currency like what happened during the 2008-2009 period. A combination of poor health facilities and an unfavourable economic environment will sink the country deeper into both economic and social mess.

What can Africa do?

The looming global recession is unique and disastrous in that it affects both the economic and social aspects of a continent. Businesses are expected to scale down operations or eventually close down, thus negatively affecting employment and household incomes, with a downstream effect on the informal market. Worker lay-offs will most certainly happen as revenue falls and costs either increase or remain the same against dwindling incomes. Further deterioration of the local currencies is expected as investors move their investments from the fragile emerging economies to more stable developed economies.

Governments willing to do “whatever it takes” to stabilise economies in response to the COVID-19 outbreak must increase utilisation of their resources towards health care. In the short-term, public health concerns should be a priority over increased public debt.

A strain on the already deplorable African health system is inevitable and, if left unattended, Africa’s health system will sink deeper into a crisis and loss of lives will be a certainty. With the current economic challenges, private spending on health care might be the ideal panacea to managing both the spread of COVID-19 and proffering a long-term solution to the stability of Africa’s economies.

Governments willing to do “whatever it takes” to stabilise economies in response to the COVID-19 outbreak must increase utilisation of their resources towards health care. In the short term, public health concerns should be a priority over increased public debt. Fiscal measures should be geared towards providing free healthcare to those affected by the virus as an obvious response, as well as lenient tax requirements towards those hit by a sudden loss of revenue, especially in the informal economy.

While our appeals for increased public spending often raise fears of profligacy and subsequent financial trouble, there is a risk of a further drop in investor confidence. The combination of an aggressive monetary policy and fiscal interventions leave private investors in a “wait-and-see” position and encourage speculative trade as Africa’s sovereign borrowing rates may increase.

Indeed, since the global financial crisis of 2008-2009 and during times of low economic growth, African governments accumulated record levels of debt. Public debt across sub-Saharan Africa has surged by an average of 20% of GDP since 2010, nearing an average of 60% of GDP across sub-Saharan Africa in 2019.

On the part of the central banks, monetary policies ought to be directing credit towards production and employment creation, such as strengthening infrastructure or providing tailored credit lines to distressed small to medium enterprises (SME). The greater the virus-related disruption, the more distressed the SME sector will be.

African governments should immediately take crucial steps such as suspending all public gatherings, and curtailing travel and the movement of people to prevent COVID-19 from spreading. While the situation continues to evolve, companies are encouraged to take prudent steps to ensure business continuity given that ultimate progress of COVID-19 continues to negatively affect the world’s economy.

Livingstone Banga is a banker based in Zimbabwe and an MPhil in Development Finance final-year student at USB.

Nii Darko Otoo is a facilities management practitioner based in Ghana and an MPhil in Development Finance final-year student at USB.

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Work in the time of Corona

USB News

Work in the time of Corona

  • MAR 24
  • Tags COVID-19; Coronavirus; lockdown; work from home; MBA Healthcare Leadership; flatten the curve;

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Prof Renata Schoeman, Head of the Health Care Leadership MBA specialisation stream at the University of Stellenbosch Business School (USB), reassures us that we can stay productive, healthy and happy while working from home during the 21-day COVID-19 lockdown.    

As South Africans face the reality of a 21-day lockdown to contain the spread of Coronavirus, working from home has become the “new normal” overnight – and if properly managed, it can be just as productive as being in the office.

South Africa’s number of confirmed COVID-19 cases increased six-fold in just eight days to 23 March, prompting President Cyril Ramaphosa to announce the “immediate, swift and extraordinary action” of a nationwide lockdown, which will close all except essential businesses from midnight on Thursday, 26 March. 

Prof Renata Schoeman, head of the MBA in Healthcare Leadership programme at USB, said that South African companies now join millions of businesses across the globe forced to “learn fast and on-the-job how to manage a completely remote workforce”. 

At the same time, scores of employees suddenly experiencing the ‘freedom’ of working from home may also be experiencing anxiety sparked by a lack of supervision and direction, having little time to adjust to a new way of working, fears of job losses, along with challenges of managing technology, keeping productive, staying connected and juggling family and work responsibilities. 

Work in the time of Corona – remaining productive while staying home to flatten the curve to contain impact on a strained healthcare system – presents unprecedented challenges for workers, business and the economy as a whole. 

“The spread of COVID-19 has made the adoption of technology and remote and flexible working inevitable, with a likely lasting change in the way we work,” Prof Schoeman said. 

Being coopedup with children, spouses, pets and even extended family also poses additional challenges and requires us “to become masters of adaptability and agility overnight”, she said. 

“Successful working from home is dependent on an individual’s self-sufficiency (such as time-management skills, self-discipline and motivation), communication skills, adaptability and technological skills,” Prof Schoeman said. 

Keep to your daily routine. Get ready for work as you would on a normal day (don’t work in your pyjamas) and don’t be too comfortable and laid back. This will negatively impact your motivation and productivity. Make a to-do list at the beginning of the day, prioritise the tasks you need to accomplish, and plan your time accordingly.

For those suddenly adapting to the new reality of working from home, Prof Schoeman says it is easy to fall into the trap of poor discipline – ditch your daily routine, eat junk food, take ‘power naps or tackle those DIY projects that there’s never been time for.  

To stay on track while working from home, she advises: 

  • Operate in a business-like manner. Set aside a separate, dedicated workspace, free from distractions, and customise it with the equipment and connectivity you need to be productive. 
  • Limit and manage disruptions and interruptions. Set down clear boundaries for family and friends and establish a routine. 
  • Keep to your daily routine. Get ready for work as you would on a normal day (don’t work in your pyjamas) and don’t be too comfortable and laid back. This will negatively impact your motivation and productivity. Make a to-do list at the beginning of the day, prioritise the tasks you need to accomplish, and plan your time accordingly.  Stay ‘in the loop. When working from home, it is very easy to miss out on the casual exchange opassage information and to feel isolated. Keep up the corridor chat and tea-break conversations with colleagues in a virtual way – by phone, online chat or social media – and make the effort for daily check-ins with teams and co-workers using online work platforms or just a WhatsApp group. Technology makes it possible to stay connected as though we were sitting in our office, rather than at home. 
  • Stay professional and be connected. Use video-conferencing (set reminders to show up on time and remember to mute yourself when not talking), and make sure to be reachable and responsive during working hours.  
  • Maintain your physical and emotional health. Very diligent workers are at risk for burnout as the boundaries between work and home blur, and employees may also feel the need to prove that they are being trustworthy and productive. Set boundaries for when your workday starts and ends.  
  • Eat healthily, exercise regularly, keep to your sleeping routine, limit non-work-related screen time and connect with your family and friends, even if via phone, online chat or social media.

Employees are less stressed due to avoiding traffic and commuting time (which also saves time, money and environmental impact), having the ability to stay at home with children, especially with the current shutdown of schools, and better work-life balance due to more flexibility in how they allocate their time,

For employers fearing lack of productivity in employees working out of sight and without conventional supervision, Prof Schoeman said several studies had shown remote workers having greater productivity (separate studies from Stanford University found productivity levels increasing between 13 and 21%) due to less interruptions, such as colleagues popping in for a chat, and fewer inefficient meetings.  

Employees are less stressed due to avoiding traffic and commuting time (which also saves time, money and environmental impact), having the ability to stay at home with children, especially with the current shutdown of schools, and better work-life balance due to more flexibility in how they allocate their time,” she said. 

Prof Schoeman said the greater independence of remote or flexible work helped employees to develop skills in self-management (self-motivation, self-discipline, focus, and concentration), communication, and the use of technology. 

“Less stress, healthier eating habits and more physical activity means healthier, happier employees who take fewer sick days and don’t put others at risk when ill – especially important at this time,” she said. 

“A final thought for employees working from home: always strive to be a better worker – be responsible and accountable. You are the master of your integrity.  

“And for the employers? Develop measurable goals and metrics for work to be performed during this time and make a determined effort to improve communication and technological capabilities. That will make remote working a win:win experience for all – not only in the time of a global pandemic,” Prof Schoeman said. 

Prof Renata Schoeman | Head: Health Care Leadership MBA, USB 

Renata Schoeman has been in full-time private practice as a general psychiatrist since 2008. As a psychiatrist, she has special interests in cognition and has been particularly active in raising awareness for ADHD in adults and children. She also holds appointments as associate professor in Leadership (USB), as head of the Health Care Leadership MBA specialisation stream, and as a virtual faculty member of USB Executive Development’s Neuroleadership programme. She serves on the advisory boards of various pharmaceutical companies, as a director of the Psychiatric Management Group (PsychMG) and is the convenor of the South African Society of Psychiatrist (SASOP) special interest group for adult ADHD, and co-founder of the Goldilocks and The Bear Foundation. 

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Advice for entrepreneurs

USB News

Entrepreneurs hit hard by Coronavirus – ways to stay afloat

  • MAR 23
  • Tags COVID-19; Coronavirus; global recession; entrepreneurship; Small Business Association

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Seraj Toefy, Custodian of Entrepreneurship at the University of Stellenbosch Business School (USB) says that according to the Small Business Association, the average cash safety net for small businesses is estimated to last only 27 days. 

It is often said that the elderly and those with impaired immune systems are most at risk due to Covid-19, but small businesses are just as vulnerable, with many who are not going to survive a global economic shut down.

… the impact on businesses across the country is monumental … our government does not have the resources to offer the scale of economic stimulus packages as other countries can.

“The South African Government has communicated clearly and regularly around their safety plans, and they are taking decisive action to flatten the curve, but in so doing, the impact on businesses across the country is monumental.  This is not unlike what is happening in other countries, but with one very substantial difference, our Government does not have the resources to offer the scale of economic stimulus packages as other countries can.”

Toefy says that although fear and panic is rampant entrepreneurs now need to rely on one of their strongest traits: perseverance.

“As a small business owner, you often don’t have a larger shareholder to rely on during a time like this, so we must button down the hatches and make sure we’re still standing when the shutdown is inevitably lifted.”

Here are key things that small business owners can do during this time, according to Toefy.

Reduce Costs

It is time to cut all discretionary spend.

“The one advantage that small businesses do have, is that we have most likely built our business up from the bootstraps, and we know how to make do with less.  As our businesses have grown, we start adding “luxuries” like offices, business travel, staff, entertainment, insurance, a bigger car, and countless smaller things to make our lives more comfortable.  It is time to cut all discretionary spend.”

He says that small businesses have a civil duty to try and cut as few jobs as possible during this time, so cutting everything else needs to take priority before staff are affected.

Negotiating with banks and suppliers for payment holidays, rebates, interest cuts and any help they can give should be top priority.  “This economic shutdown is not regional, it is global, [and] so everyone is affected.  Your banks and suppliers need you to survive this, as they too will be struggling, but they will struggle more if they lose you as a client.  Now is the time to negotiate.”

The Department of Small Business Development has also offered assistance to small qualifying businesses.  You can apply from 24th March 2020 at www.smmesa.gov.za

Continue to operate

Toefy stresses that “this is not a holiday, and this is not a time for a pity party.  It is a time to do what entrepreneurs do, and that is hustle.  Be creative and find a way to continue operating.”  If you can, set up staff at their homes with laptops and WIFI and use some of these tools that can assist with remote working:

“If your business is more production based, find a way of maintaining some level of service, even if it is far reduced, and adheres to social distancing.  If you have a factory that normally employs 150 people, then rather reduce your output by putting two shifts of 75 people, and space them out.  This way you are at least still delivering something and keeping your staff employed.”

Co-opetition

Co-opetition is when you cooperate with your competition.  He says that now is not the time to try and beat one’s competition, but to reach out and see if one could share workloads, share knowledge and work together to try and survive this.  “Rising tides lift all ships, and never before have we needed ships to be lifted as much as now.”

Communication

Your staff will be anxious, so help them through this time by being as open and honest with them as you can. It is ok to be vulnerable; you may be surprised by how much support you receive

As with all crises, increased communication reduces anxiety.  Toefy suggests that increasing communication with staff, suppliers and clients is paramount.

“Remind your clients that you are still operational, offer help and support.  Your staff will be anxious, so help them through this time by being as open and honest with them as you can.  It is ok to be vulnerable; you may be surprised by how much support you receive.  There have been several cases of companies where staff are choosing reduced hours and pay instead of laying people off at this time.”

Strategise

There will most likely be a distinctive difference between before Covid-19 and after covid-19. Be prepared to be better, after.

Small businesses often don’t have the time to strategise due to work load however the slow-down of the economy does not mean that one must slow down.  Toefy says that business owners should use this time to think of ways of how they will do things better when the shutdown is lifted.

“Being agile is not a strategy, it is an ability.  It is an ability that is best used within the framework of a strategy.  The Business Model Canvas is a good framework to ensure that all elements of your business are being looked at during this time. There will most likely be a distinctive difference between before Covid-19 and after covid-19.  Be prepared to be better, after. “

Read and study

As an entrepreneur, your single biggest asset is you.  Use this time to work on yourself.  Read books or study online.  There are several short courses that one could do while in isolation.

Strive don’t just survive

Quoting Rahm Emanuel who said, “Don’t waste a good crisis”, Toefy says that we are all thinking about ways to survive this crisis, but what if we implemented some of these tips and came out of isolation even stronger.  “Perseverance, tenacity, creativity, determination and passion are traits synonymous with entrepreneurs.  Now is the time to call on all of them and not just survive, but strive.”

 

Seraj Toefy
Custodian of Entrepreneurship at USB and Head of Africa at Centuro Global

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OPINION: Virus and values

USB News

Virus and Values

  • MAR 20
  • Tags COVID-19, Coronavirus, flatten the curve, business in society, humanity, moral values, responsible leadership, social impact

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Prof Arnold SmitAssociate Professor of Business in Society, unpacks five moral values that we all have in common. These values, he says, are the essence of what makes us human, and should be upheld at all costs during these difficult times in our society.  

crisis reveals so much of who we are. It can bring out the best in us. It can bring out the worst in us. Apart from posing a threat to our health and safety, a crisis may also present a test for our values. It is no different in our confrontation with COVID-19. The spread of the coronavirus demonstrates our physical interconnectedness while at the same time it reveals how we respond to the relatedness of our human existence. The physical side of the corona confrontation is a health issue, the relational dimension is a moral one. However, both are contained in the frailty of our human existence.

The spread of the coronavirus demonstrates our physical interconnectedness while at the same time it reveals how we respond to the relatedness of our human existence.

While not equipped to speak science to virology, I want to share a few thoughts on how COVID-19 confronts our sense of morality. It is widely accepted that humanity holds five moral values in common: honesty, respect, responsibility, fairness and compassion. While we can add some to the list or find different words for each, these five values contain the essence of what makes us human in our relatedness. These values describe our aspirational beliefs about human behaviour and determine how we prefer to live and relate, our sense of what is right or wrong, in a particular context, and the decisions that we make as a result. When we uphold them, we do better; together. When we violate them, we pay the price; together. 

It is widely accepted that humanity holds five moral values in common: honesty, respect, responsibility, fairness and compassion… When we uphold them, we do better; together. When we violate them, we pay the price; together.

Because of the relatedness of our existence, we are ever being called upon to be honest, respectful, responsible, fair and compassionate in our dealings with one another. The demand for being so connected to others seems even bigger now that a dangerous and fast spreading virus runs through the channels of our physical connectedness. Every contact point with others may become a question of how to behave, how to relate and what to decide.  

The value of honesty, for example, now calls upon us to think carefully about the information we rely on and share, to be transparent about our own state of health and truthful about our whereabouts in potentially risky contact with others. 

The value of respect now especially calls upon us to treat everyone else – irrespective of their standing or influence – with dignity; to make their health and safety a priority as if it were our own, and to honour their personal space through social distancing 

Responsibility means that we think carefully about what we decide and do – especially in view of the impact that it may have on others. While we need to care for and protect ourselves, we must consider the rightful interests of others too.  

What does fairness mean when we fear scarcity and shop for supplies? What does it mean when we stock medical supplies which are now more needed in healthcare facilities? What does it mean when decisions are pending about salary adjustments and potential layoffs? 

Compassion speaks to our ability to watch out for others and care about their needs and circumstances. What we in South Africa so far mainly witnessed about COVID-19’s impact on individuals, families, communities and businesses, and how people have been challenged to manage the tension between social distancing and mutual care, may become more intensively part of our daily existence in the time to come. 

What I have written above, about the virus – values connection, may confront most of us in our daily conduct as we go about life, work and relationships. It certainly requires from us to be mindful and sensitive while we care for self and stay in touch with others. It gets more challenging, though, when the essence of your job is to make decisions in an organisational or professional context. 

The Coronavirus has no awareness of itself or its impact. It simply flourishes where the ecosystems of nature and humanity allow it to do.

In an organisational context, boards and executives, are confronted with uncomfortable decisions. While operational continuity may be at risk, human dignity is of equal importance. What does it mean then to be honest, respectful, responsible, fair and compassionate with employees, customers and suppliers, to name the most prominent stakeholders, when navigating your way through the pandemic’s potentially devastating impact?  

While there are several professional contexts that we can potentially think about, we must spare a thought for the healthcare profession in a time such as this. While duty positions them in eye of the Coronavirus storm, they have to deal with the anguish of worried and potentially infected people, treat every patient with equal respect, provide a clinically safe treatment space for the sick and the healthy, make difficult decisions about the allocation of scarce medicinal and other treatment resources, and maintain their own capacity for nurture at the same time. 

The Coronavirus has no awareness of itself or its impact. It simply flourishes where the ecosystems of nature and humanity allow it to do. However, it does awaken a new awareness about our essential vulnerability and inevitable interdependence as a human community. While we stay hopeful for a scientific breakthrough to put the virus in its place, we’ll have to rely just as much on our capacity for values-based living and relating to carry us through.  

Prof Arnold Smit
Associate Professor of Business in Society
University of Stellenbosch Business School 

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How USB aims to #FlattenTheCurve on the spread of Corona

USB News

How USB aims to #FlattenTheCurve on the spread of Corona

  • MAR 19
  • Tags COVID-19; Coronavirus; flatten the curve; online education; webinars; lockdown; blended learning

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What does the outbreak of COVID-19 mean for USB?

Please read the official communication about the national lockdown from our Deputy Registrar regarding students and faculty.

Official announcement

Students and classes

Since the announcement of the lockdown, various challenges have made it unreasonable to proceed with online lectures and assessments. Such challenges are access to bandwidth, loadshedding, connectivity, movement constraints and personal spaces which may prevent uninterrupted participation in remote learning environments.

Therefore, USB has decided to suspend all academic programmes and all forms of assessment. All remote teaching and assessment will be suspended from 20h00 on 26 March 2020 for the duration of the lockdown, which ends at midnight on 16 April. We will then reevaluate the situation. We remain committed to the completion of the academic programme for this year, and a revised schedule will be established and communicated in due course.

We continue to make future provisions for online facilities, such as remote learning through our Blended Learning format. Programme-specific arrangements regarding classes will be communicated via our Learning Hub platform.

Events

It is an unfortunate reality that we have had to postpone each of our events involving physical interaction until further notice. These events include USB Leader’s Angle events, Alumni Masterclasses and Networking events, as well as other in-person talks, workshops and seminars. This decision from USB and Stellenbosch University (SU) has not been made lightly. We have invested much time and finance into creating these experiences, and understand the disappointment of those who were looking forward to each occasion, making time in their busy schedules to attend. We also understand the importance of these events within the USB community, and the loss incurred from these cancellations.

Staff 

With the latest legislation from government, staff will be working from home. This requires that they are fully connected and available to respond to e-mails and phone calls during work hours, ensuring that the operational needs of each USB department can still be met.

With our business school’s commitment to responsible leadership and creating value for a better world in mind, we believe we have taken the best course of action at this point in time. Taking into account the fluidity of the situation, we are constantly reevaluating our strategies to ensure we will exercise best practices in our decisions going forward.

For now, we encourage you to prioritise your health and to do your bit to help us #flattenthecurve.

ABOUT THE VIRUS

What is Coronavirus (COVID-19)? 

According the World Health Organisation (WHO), corona viruses are a large family of viruses which may cause illness in animals or humans. They are known to cause respiratory infections in humans, ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). The most recently discovered coronavirus causes coronavirus disease COVID-19. This new virus and disease were unknown before the outbreak began in Wuhan, China, in December 2019. 

#FlattenTheCurve 

When there is an outbreak of a disease, there is an inevitable increase in number of people infected over time, and an equally inevitable decrease as the disease is eventually controlled. What matters is how rapidly this process or “curve” takes place.  

Flattening the curve is another way of saying slowing the spread. The epidemic is lengthened, but we reduce the number of severe cases, causing less burden on public health systems. The Conversation/CC BY ND

If there is a sudden spike in the number of people infected, there are more casualties – even if it means the disease will be eradicated more quickly. We should therefore aim to “flatten” the curve in order to reduce the overall harm it causes to our population. The more gradual the increase, the safer everyone will be in the long run. This means we should put every measure in place to prevent the spread and contraction of COVID-19 and prolong these measures for as long as is needed.

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Organisations embracing technology in response to COVID-19

USB News

Organisations embracing technology in response to COVID-19

Empty meeting room with conference table, whiteboard and chairs. Front view.

  • MAR 12
  • Tags COVID-19, coronavirus, World Health Organisation, Fourth Industrial Revolution, economy, telecommuting, systems

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By Dr Lize Barclay, Senior Lecturer in Futures Studies and Systems Thinking, University of Stellenbosch Business School

Rumour and misinformation around COVID-19 (coronavirus) have spread faster than the virus itself. This has led to various levels of government, business and individual responding in widely divergent ways, from extreme measures to ridicule. The World Health Organisation (WHO) called for a ‘Whole of Society’ approach, which includes social distancing, as expressed in quarantine measures and the cancellation of events in affected areas.

Countries are debating lockdown, as in the case with Italy.  China placed several cities in lockdown and where there are isolated cases, such in South Africa and the USA, individuals are in self-quarantine. Internationally stock markets have taken a knock, certain essential products are flying off the shelves and supply lines are disrupted. Historic events, gaming simulations like Superstruct and recent cases have shown that people are not comfortable with social distancing and will leave isolation or quarantine for religious worship, social events, and professional networking events. Many companies have embraced telecommuting and event organisers are cancelling conferences, even including health conferences.

The World Health Organisation (WHO) called for a ‘Whole of Society’ approach, which includes social distancing, as expressed in quarantine measures and the cancellation of events in affected areas.

Technology provides us with the means to communicate, collaborate, network, socialise, work and shop in the digital and virtual realms. Often, when the Fourth Industrial Revolution is discussed, it paints a picture of a world where people work from wherever they want, with products delivered to them and their mobile devices as a gateway to this lifestyle. The technologies that enable this reality already exist and are used by businesses and individuals all over the world.

In reaction to COVID-19 many companies and education facilities have moved their day-to-day operations onto technology platforms. This has led to companies leading in the remote-work field, such as Zoom, Slack, Adobe, Broadcom and Oracle, seeing their share price rising, amidst market uncertainties. These technologies enable workers and students to communicate “face-to-face”, collaborate on digital whiteboards and with digital sticky notes and cut down on meetings with scheduled and focused discussions on collaborative platforms. Many of the conferences canceled their physical on-site programmes and then moved the presentations and discussions to digital platforms.

The barrier to adoption of these technologies is largely due to personal and interpersonal considerations as managers want to maintain oversight of their workers.

The barrier to adoption of these technologies is largely due to personal and interpersonal considerations as managers want to maintain oversight of their workers. Additionally, agreed upon productivity metrics for teleconferencing are still developing and a general fear of change prevails. People want to socialize with co-workers and do not trust their ability to stay focused while working remotely.

Already China has reported a marked decline in air pollutants due to a lessening in production activities and fewer people driving. Telecommuting will also lead to a decrease in other communicable disease deaths as exposure is limited. This highlights the importance for companies to maintain flexibility in the face of unexpected challenges, which can even include infrastructure limitations, such as load shedding.

Telecommuting will also lead to a decrease in other communicable disease deaths as exposure is limited.

Disasters and reactions to these should not only prompt resilience, but individuals and organisations should embrace anti-fragility, become more innovative, create better systems for themselves and the environment and leverage technology accordingly.

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