Lockdowns—and Shortages—Return

Shelves normally filled with paper towels and toilet paper are empty. A quarter of a manufacturer’s workforce is absent. A salesman loses a deal because he can’t get information from a colleague in time.

To most, these sound like problems from last spring, when many businesses were forced to shut down in an effort to contain the spread of COVID-19. But experts say all of these problems—and more—are recurring as organizations large and small discover they’re still a long way from solving a host of pandemic-produced problems. “There are lots of nagging issues,” says Christian Hasenoehrl, a Korn Ferry global account leader with clients in retail, manufacturing, and food processing.

For months, firm leaders have known that second and third waves of COVID were likely, but experts say many were too focused on keep operations afloat. As the summer and fall wore on, some also became simply too exhausted. Either way, the problems reappearing today will hinder sales, delay new projects, and put even more pressure on stressed-out workers at every level. And all that could get worse as governments impose curfews, ban large gatherings, and other measures to curtail the recent surge in COVID-19 cases. 

To be sure, organizations have found workarounds to many of the biggest obstacles the pandemic created, particularly around getting employees to be able to work outside the normal office efficiently. But experts have identified several areas where companies haven’t cracked the code.

Supply chain snafus

An overwhelming number of problems stem from companies that either haven’t solved their own internal supply chain problems or are dependent on other organizations struggling with theirs. Many firms operated with supply chains that could not tolerate small disruptions. The pandemic, of course, was anything but, as demand for some goods and services (anything travel-related, restaurants, business attire) fell dramatically while demand for a select group of items skyrocketed. suppliers can’t operate because they rely on materials or ingredients that are not reaching them in time. "Suppliers can’t operate because they rely on materials or ingredients that are not reaching them in time," says Jamen Graves, a Korn Ferry senior client partner and leadership consultant.

The lack of toilet paper at groceries and other retailers remains the most visible sign of the supply chain troubles. Retailers asked manufacturers to concentrate on producing only a few brands and sizes to ensure they’ll have at least some stock. “They won’t run out of product, or it may happen but they won’t be out for weeks at a time,” says Craig Rowley, Korn Ferry’s sector leader for retail. The flip side of that, however, is that a lack of the normal variety could curtail sales, Hasenoehrl says.

Supply chain problems are also hindering companies whose business rebounded. Automakers, for instance, have been able to get their factories going and want to make up for lost time. But they’re finding it difficult to get certain base components, such as resin, in the quantities they need because their suppliers are still facing both production and financial difficulties. “When a particularly high-demand user comes on stream, it has repercussions for everyone,” says Cheryl D’Cruz-Young, a Korn Ferry senior client partner who specializes in procurement.

Off-limits facilities

By now, most factories have installed social distancing rules, plexiglass shields, temperature checks, and other safeguards to lower the risk of an outbreak among its regular employees. But factories have far less control over the environment of its back-office employees, including members of the C-suite, since they are working remotely.

That means executives, or anyone else, can’t just visit a plant if there are problems to work out or products to inspect, says Mary Elizabeth Sadd, a Korn Ferry senior client partner who works with industrial manufacturers. “You have to weigh keeping back-offices workers healthy weighing while keeping everyone else off campus,” Sadd says.

The remote work is causing other problems, too. Sure, many companies have been able to get their employees the tools to work remotely, but many executives lament that the all-remote work is stifling innovation and collaboration. Clients are telling Hasenoehrl that “we are having trouble advancing anything.”

Workers out of action

Back in the spring, worker absentee rates soared because employees were afraid of getting sick or needed to take care of someone at home. Now, with the United States averaging more than a million new COVID-19 cases each week, employee absentee rates are high because employees are sick and must take care of someone at home.

Some big companies, such as Walmart, have been able to hire hundreds of thousands of workers to make up for absent employees. But few organizations have the resources to be able to hire so many people at once.

Even organizations with healthy or available employees have found they can’t put them all to work as they did before. Companies of every industry have had to limit the number of people at the workplace to comply with social distancing guidelines. That’s put a limit on how much can be produced. “You can’t get back to just-in-time production because you can’t get the labor,” D’Cruz-Young says. 

Communication breakdowns

In the pre-COVID world, a salesperson could talk to a potential client about a deal, then get in touch with their manufacturing center to answer any questions. When the pandemic first hit, many manufacturers, desperate to get the supplies they needed, cut deals with whichever vendor could answer their questions the fastest. Salespeople who didn’t have answers immediately lost the sale. The need-answers-immediately dynamic has returned, experts say, as manufacturers fear another wave of lockdowns might curtail supply. Many salespeople haven’t adapted, Sadd says. “Salespeople have to know what a plant can or cannot do,” she says. 

Even if a second lockdown doesn't happen, many organizations aren't thinking about an official return to the office until 2022, says Craig Stephenson, managing director of Korn Ferry's North America technology officers practice. He says over the last eight months, IT leaders have gotten a solid handle on managing connectivity, cybersecurity, and productivity. "The opportunity for technology to play a significant role in shaping and evolving a future remote culture is immense," Stephenson says.