Note – McKinsey: The restart: Are you ready?

This week, what to stop, what to start, and what to accelerate when thinking about reopening. Plus, why this crisis is different for the oil and gas industry, and McKinsey partner Sarah Kleinman on the successful responses she’s seen.

The past months have been grueling, destabilizing, often deadly. Now, as governments and businesses try to find their feet amid the pandemic, there’s room for hope, tempered with caution.Still so many questions. How can companies navigate this difficult environment, especially in the next few weeks, as restrictions are loosened in many countries? What is the financial health—and state of mind—of suppliers and consumers? How can employees be motivated to return to work and be reassured about their safety? How quickly will demand return?Based on our research and conversations with leaders of large companies, from all sectors, we believe eight actions are essential. In addition to safeguarding their employees, companies should provide customers with safety guarantees that restore trust, revive demand, and reboot operations and supply chains.To start, create a detailed relaunch map. Go country by country, site by site, segment by segment, customer by customer, and product by product to prioritize recovery opportunities. This map will guide production, supply-chain, and marketing and sales efforts, and help determine a recovery timeline for each site. It may be appropriate to freeze some planned or ongoing projects until the company has the capacity to reassess them.What about governments? For weeks, most governments focused on controlling the spread of the virus, many of them by implementing a full lockdown strategy. Now, many are moving to strike a better balance between “flattening the curve” and reviving the economy. But uncertainty is rampant. In an April article on restarting national economies, we outlined a selective lockdown strategy in which certain regions and sectors can gradually return to work. Such a strategy makes it possible to define the optimal number of people allowed on the streets, making sure that lives are protected while also minimizing the cost on livelihoods.Yes, but. The toughest leadership test still looms: how to bring organizations back, full force, in an environment in which a vaccine has yet to be found and economies are still reeling. Imagination and on-the-field execution will be paramount as leaders consider how to navigate the restart. Business as usual will not be nearly enough; the game has changed too much. But by reimagining how they operate, organize, and use technology, even as they return to work, leaders can set the foundations for enduring success.Let’s end on an optimistic note. It’s said that the worst of times brings out the best in people; as it happens, this is true of organizations as well. Almost every leader we speak with has an inspiring story of radical, positive change in how work gets done and what their employees can—and did—accomplish. Amid the fear and uncertainty, people are energized as companies make good on their purpose statements and find new ways to serve their customers and communities. Let’s hope this continues well beyond the pandemic.

Oil and gas dig deep amid disruption
The oil and gas industry is experiencing its third price collapse in 12 years. After the first two shocks, the industry rebounded, and business as usual continued. This time is different: the current context combines a supply shock with an unprecedented drop in demand and a global humanitarian crisis. On top of that, the sector’s financial and structural health is worse than in previous crises (the industry has underperformed against the S&P 500 over the past 15 years, as we show below). To respond, the industry will have to tap its history of bold structural moves, innovation, and safe and profitable operations in the toughest conditions.

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