What should companies move their focus to?

Every crisis presents itself as an opportunity for businesses to reinvent itself, just as Rolls Royce did by producing a radically different product - the “Rolls Royce of Honey”, the world’s most exclusive honey; which is produced at the home of Rolls-Royce in Goodwood. While auto manufacturing has temporarily been suspended, this is how they kept their 250,000-strong workforce busy.

But this “apiary project” didn’t start today. In September 2019, Rolls Royce first harvested 100 jars of honey from just two hives. This was part of their effort to stem and reverse the threat facing Britain’s honey bee population.

What's interesting to note is that Rolls-Royce isn’t the only brand producing this liquid gold today, as another luxury car maker’s swarm of flying bees produced their first crop of  "Bentley" branded honey last year too.

Going back to downstream now, the International Energy Agency (IEA) just released its forecast for 2020 (30 April 2020), according to which: Global energy (power) demand would drop by 6%, seven times higher than it did in the 2008 financial crisis. It is going to be the biggest year-on-year drop since World War II and will be equivalent to losing the entire energy demand of India – the third-largest power consumer in the world.

For the environment though, it’s great news. Energy-related carbon emissions are expected to fall by about 8% (lowest since 2010) which also perfectly aligns with UN’s expectation of a drop in the CO2 emissions of 7.6% annually through 2030 to limit global warming to 1.5 degrees C.

The above forecast is vital for the downstream industry which would shape the global energy demand in all areas of businesses.

As refiners, producers and manufacturers, depending on where we are in the company value chain, immediate attention needs to be paid to:

• Workforce – address anxiety and wellbeing of the people who run the show
• Assets – protect value and operability
• Distribution and suppliers – communicate openly and agree on terms to support sustenance
• Price exposure – manage risks through dynamic modelling based on constantly changing factors
• Production – consider temporary cuts with the ability to ramp-up at short notices
• Recovery – prepare several alternative plans considering all possible scenarios for the future
• Look at your business portfolio with a fresh eye – use peripheral vision to capitalise on the opportunities being created through the crisis where your existing assets and workforce can be utilised with greater benefits in the future (Rolls Royce and Bentley examples). These opportunities may come from any direction such as your supply chains, new emerging markets and technology-based solutions
• Loopholes exposed by the crisis – find ways to plug them through re-skilling your workforce, better response rates, higher HSE compliance, readiness to adapt etc.