EY's Jacky Lai shares how companies can proactively work amidst the crisis

He is one of the judges in this year’s Management Excellence Awards.

Jacky Lai, Assurance Partner at EY, has over 20 years of professional experience and leads the execution of EY’s digital audit strategy in Hong Kong.

His experience spans the capital markets, with deep knowledge of IFRS, HKFRS and domestic Initial Public Offerings. He has also assisted state-owned enterprises in restructuring and advised on cross-border listing procedures.

Since joining EY in 1996, Jacky has worked with a variety of clients across a range of industries, including environmental energy, retail and consumer products, food and beverage, construction and garment and electronics manufacturing.

“Success is dependent on business resilience. On the road to recovery, organisations need to plan for a period with recurring disruptions which is more than just operating as business as usual,” said Jacky in an interview with Hong Kong Business.

As one of the judges in the HKB Management Excellence Awards 2020, Jacky shares how companies can proactively work amidst the crisis, and how they can support their employees and stakeholders.

Which particular markets or sectors are your main focus? Can you share with us your work experience or any backstory that has contributed to your professional career?
Since joining EY in 1996, I have worked with a variety of clients across a range of industries, including environmental energy, retail and consumer products, food and beverage, construction and garment and electronics manufacturing.

I lead the execution of EY’s digital audit strategy in Hong Kong. My experience spans the capital markets, with deep knowledge of IFRS, HKFRS and domestic Initial Public Offerings, assisting state-owned enterprises in restructuring and advising on cross-border listing procedures.

In today’s rapidly changing world, I focus on enhancing audit quality and driving digital audit advancements so we can achieve the purpose of the audit profession – to serve the public interest and increase trust and confidence in the capital markets. This way, we can create sustainable and long-term value for our clients, people and society

What can leaders learn from the crisis? For those whose companies and industries have been badly hit, what do owners need to consider on the road to recovery?
Companies need to proactively work towards building a flexible workforce, an agile supply chain, adapting to a new kind of customer, developing sustainable finance and maintaining contingency plans.

1. Flexible workforce: companies need to create a more flexible workforce, looking at adaptable contracts, contingent workers, and exploring the efficiencies of remote working with the potential impact on real estate needs.

2. Plan for an agile supply network: linear, global supply chains need to be stress-tested against geopolitical risks, with vulnerabilities minimised. By looking at shared, less distant resources, some onshoring of business-critical activities and the creation of an agile value network, companies can restart production, while mitigating risk of disruptions.

3. Expect a new kind of customer: companies need to increase digital customer access and ensure data analytics are optimised across data sources. Incompatible legacy systems that don’t talk to each other will be costly weaknesses that the resilient organisation cannot afford. Analysing customer behaviour will provide opportunities for rethinking product and service portfolios in the medium term while increasing short-term opportunities.

4. Develop sustainable finance: financial resilience will flow from lowering the cost base over the longer term, increasing liquidity in the short term and using virtual scenario planning to cope with downturns and upturns in the medium term. Financial and risk teams should continue to work together on developing plans, on communicating forecasts, however difficult, to both internal and external audit teams as well as investors.

5. Maintain contingency plans: contingency planning allows an organisation to return to its usual business operations as soon as possible after an unforeseeable event. It also can help businesses ensure the well-being of their people, protect their resources and sustain their business ability to perform when the odds are stacked against a business environment. Only those organisations that can adapt through proper planning will be able to survive the many challenges the business world presents and just because one crisis is over it doesn’t mean that another one isn’t on the horizon. Therefore, having a comprehensive contingency plan is imperative for the survival of any business organisation, regardless of its size. It serves as a blueprint for organisation leaders and their counterparts to deal with unusual events.

How can the management support their employees and stakeholders during these tough times?

On employees

Beyond keeping people physically protected, management must also pay attention to staff exhaustion and the stress that comes from the pressure to perform during a crisis. Many people feel guilty if work prevents them from being able to take care for their own family and those who choose to isolate themselves from loved ones for fear of transmission also suffer from loneliness. During these tough times, leaders can focus on the following aspects to improve people’s wellbeing by:

Protecting employees’ physical and mental wellness
Beyond all physical protection measures, management should ensure their employees know where to find information, guidance and support for both physical and mental wellness. It is also crucial to maintain open channels of communication and hear how employees are feeling and, more importantly, listen and respond. Leaders can consider establishing a hotline or central contact point for employees – and develop in-house channels and hubs to respond promptly to employee questions and concerns.

Encouraging employees to stay connected
For many people, staying connected with colleagues can provide an important buffer to reduce social isolation and disconnection. As working from home is becoming a new normal, management should encourage employees to stay connected with each other by organising regular virtual video meetings. If there are early signs that employees are overwhelmed and anxious, leaders can help by making themselves available to talk to staff and address their concerns

Boosting motivation and engagement
It’s hard to find the energy to remain motivated in a time of crisis. Setting a clear and immediate roadmap for an organisation's objectives will mobilise and galvanise employees around a common goal. This is also a good time to rearticulate company values, which help keep people grounded in a familiar way and give them a direction for navigating uncertainty.

On stakeholders

The purpose of a company is to engage all its stakeholders in shared and sustained value creation. In creating such value, a company serves not only its shareholders, but also other stakeholders such as employees, customers, suppliers, local communities and society at large.

During tough times, companies around the world are usually challenged by more immediate concerns, especially the health of their workforce, retaining consumers and managing short-term loss of revenue as the economy drastically deteriorates.

On top of dealing with the short-term economic risks, companies should also think for the long term and create value for all their stakeholders. For example, many sizable companies now have the sustainability function which looks beyond a five-year time horizon and specifically address ESG issues. The function analyses megatrends and reflects how they could impact on the company’s business by viewing the issues through a wider stakeholder lens than other functions.

The COVID-19 pandemic, rather than distracting from the need to drive a sustainable future, actually reinforces that imperative. This is a once-in-a-generation opportunity for companies to realign themselves and prioritise long-term value creation. As every company has been put on the same level playing field, companies that are able to realign themselves to a holistic stakeholder agenda will have a competitive advantage over those that only try to return to business as usual.