COVID-19:

Situation Report
and Action Agenda
CEO webinar
April 2, 2020
 WELCOME
AND
THANK YOU
FOR JOINING

SYD 200402 India CEO webinar - COV ... 2

Introductions

Karen Harris James Allen Karan Singh Nikhil Ojha

MD, Bain’s Senior Partner MD Senior Partner
Macro Trends Bain London Bain India Bain India
Group

SYD 200402 India CEO webinar - COV ... 3

Topics for today

What are India

CEOs thinking How can YOU
How will COVID
about? What best think to Q&A:
play out? What
should be YOUR RECOVER and What are YOUR
are learnings
plan to PROTECT RETOOL to equip top of mind
from other parts
your company your company for questions?
of the world?
during this the future?
crisis?

SYD 200402 India CEO webinar - COV ... 4

Topics for today

What are India

CEOs thinking How can YOU
How will COVID
about? What best think to Q&A:
play out? What
should be YOUR RECOVER and What are YOUR
are learnings
plan to PROTECT RETOOL to equip top of mind
from other parts
your company your company for questions?
of the world?
during this the future?
crisis?

SYD 200402 India CEO webinar - COV ... 5

 Coronavirus impact scenarios
Faster Recovery
scenario
• US infections rapidly rise in March,
peak and subside in Q2. ~+80% of
pre-crisis activity towards end of Q2.
• EU most adverse epidemiological
outcome among advanced economies.
• China slowly loosens restrictions in
March, full acceleration towards
normal in Q2
• US/China/Others deploy minimally
tested treatment
Sharp contraction,
rapid partial return,
longer path to full resumption
Global “slow-burn”
scenario
• US/W Europe/China engage in high social
distancing for ~1 year until vaccine or
treatment can be deployed.
• Extended impairment business activity;
containment of damage entirely contingent
on broad government backstops.
• People movement across borders minimal
for duration of epidemic.
• Public anxiety and social distancing policies
keep infections rising but at a manageable
rate
Economies operate at
severe recession level for one year
(operating at no more than
~80-85%of normal) SYD
200402 India CEO webinar - COV ...
Global “fast-burn”
scenario
• Social distancing measures can’t or
won’t be sustained. Severe
concentrated impact in late Q1—Q2,
easing in Q3.
• Hospitalization resources are
inadequate to achieve favorable (low)
fatality rates.
• High demand from recovery of basic
needs plus rebuilding hit reduced
supply-chain capacity.
Contraction in Q1 becoming severe
in Q2 (severe recession levels);
lasting social and economic damage
from higher mortality rates
6
 We can start to consider the macroeconomic implications of COVID-19 by looking at
China; China’s return to activity can inform global outlooks on the pace of recovery
CASE STUDY CHINA MARCH 25 2020

Bounce back will be gradual; economies will Global interdependencies and timing will
not “switch on” once lockdowns relax complicate recovery

• COVID-19 presented a major shock to the Chinese • China’s economy relies heavily on international
economy, and is not comparable to a temporary demand for its goods and services
“blackout” scenario with “lights on, lights off”
• While China has begun to restart production, the rest
• As production resumes, there has been a significant of the world is earlier in the epidemiological curve and
ramp-up period, during which companies is now starting to shutdown, impacting demand for
gradually approach pre-crisis levels of activity Chinese exports
• Lower domestic demand in China will likely
continue; policymakers may be cautious to stimulate
demand given China’s supply chain is operating
below-normal levels and there are inflation risks

While local differences make it impossible to directly compare countries to China, some macroeconomic
lessons and implications can be drawn from China’s economic recovery
SYD 7
200402 India CEO webinar - COV ...
Topics for today

What are India

How will COVID CEOs thinking How can YOU
play out? What about? What best think to Q&A:
are learnings should be YOUR RECOVER and What are YOUR
from other parts plan to PROTECT RETOOL to equip top of mind
of the world? your company your company for questions?
during this the future?
crisis?

SYD 200402 India CEO webinar - COV ... 8

HUMANITARIAN Crisis

~2000 50+ 60M+ migrant workers

21
days of nation-
confirmed cases Deaths
affected wide lockdown

*As per Census 2011

Note: All metrics as of 2nd April 2020, reported by Ministry of Health SYD 200402 India CEO webinar - COV ... 9
ECONOMIC toll

1-3% ~$15b 55%+

predicted decline in outflow of capital by Indian economy at
GDP growth1 FIIs in March halt in lockdown

₹3 $200+b
decline vs. USD annual exports and
in March imports linked to severely
affected countries

Source: 1) as predicted by CRISIL and Moody as of 30th March; Lit. Search

SYD 200402 India CEO webinar - COV ... 10
GOVT. ACTIONS: Slew of measures announced; however,
MORE EXPECTED to address full impact

Supply chain Fiscal relief Stimulus

Digital: Digital pass Cash transfers, tax Financial stimulus
screening credit (esp. disadvantaged
groups)

Leverage PDS, PSU Tax waiver (e.g. service Policy measures

petrol pump outlets tax) (EPFO a/c
withdrawals)

E-commerce: Additional tax breaks, Direct bank

Rations distribution depreciation benefits transfer

Liquidity for
MSMEs: soft loan,
deferred tax
Measures already announced by Gov’t of India as of 31th March payment
Note: PDS: Public Distribution System; PSU: Public Sector Undertaking; EPFO: Employees’ Provident Fund Organisation; MSME: Micro, Small & Medium Enterprises

SYD 200402 India CEO webinar - COV ... 11

72% CXOs believe COVID-19 likely to last ONE QUARTER…

Given latest developments in India, how

long do you think this situation will last?

MAY
“ With Govt. measures, COVID patients
will be quarantined… should see this
close by Q1; vaccine also key…

12% CFO, PharmaCo

13%
DIWALI “ Vaccine is key; if we isolate patients –
TESTING TESTING TESTING – July/
Aug is when focus moves to recovery

CEO, ConsumerProductsCo

3% APR
2021 72%
JULY
“ Strong belief that measures (increased
awareness, lockdown) will flatten curve –
3-5 months is my guess

CEO, ConstructionCo
Source: India CEO Survey
SYD 200402 India CEO webinar - COV ... 12
…with full recovery being somewhat PROLONGED stretching
till end-2020

How quick do you expect

recovery to be?
“ Big businesses should bounce back
faster; SMEs will limp till spending
revives – probably end year

CEO, ChemicalsCo
MAR 2021

“
13%
13% ‘Usual’ ways of working need to
BEYOND resume, movement restrictions lift;
JULY MAR 2021 another 6 months…
5% 68%
MD, InfraCo
END-
OF-
YEAR “ Global supply chains need to re-activate;
vaccine in another 6-9 months?

BU Head, AutoCo
Source: India CEO Survey
SYD 200402 India CEO webinar - COV ... 13
In China, consumer spending is already seeing early signs of recovery
across segments

FMCG Consumer durable Consumer service

Essentials Non-essentials

Stage 2 vs.
Stage1
Stage 3 vs.
Stage 1
Online
penetration

Impacted due to
Stock up during outbreak and Hit during outbreak esp. offline Bounce back after
reduced social
stabilize afterwards and recover to normal level lockdown stops
activities during stage 2
Source: Consumer survey (N=981); Bain – Kantar Shopper Report; Euromonitor; Bain analysis SYD 200402 India CEO webinar - COV ... 14
Recovery curve will VARY BY INDUSTRY:
some sectors may see temporary boost

Hit and Hit and bounce back: Spike and Spike, continued
recover ‘Revenge Buying’ stabilize growth: Mindset shift

Industry examples
• Restaurant & food service • Apparel, Beauty products • Offline retail (staples) • Offline retail - organized
• Logistics, transportation & • Retail health (e.g., physical • Instant food (grocery)
tourism therapy, dentistry) • E-commerce
• Real estate • Remote working
• Fintech • Online healthcare
• Auto • Online entertainment, education

Source: Lit research, Bain analysis

SYD 200402 India CEO webinar - COV ... 15

This crisis is a test for all leaders –
and a ‘wait and see’ approach is a non-starter
COVID-19 is unlike any
previous crisis
Traditional ‘crisis response’
approaches will not be sufficient
Countries will create
major disruption in
themselves
The process of ‘containment’ and
‘slowing the spread’ that is
phasing in country by country will
create major disruption in itself,
irrespective of the seriousness of
the virus spread itself
Prepare for the worst
Prepare for the worst, and be
thankful if it doesn’t eventuate;
‘wait and see’ approach is a non-
starter
Revenue disruption
leading to a potential
liquidity crisis
High likelihood of a substantial
revenue disruption, leading to a
potential liquidity crisis for many
Recovery may not be a
quick “bounce back”
The recovery may not be a quick
‘bounce back’ -- plan for multiple
quarters of lower revenue
Employees
and customers
fear/panic
Employees and customers likely
experiencing fear/panic, and
need our support and guidance
Senior, fully dedicated Customers will
COVID-19 “war room” change behaviors in
team non-reversible ways,
bold action now
You need to appoint a senior,
fully dedicated COVID-19 “war through the downturn
room” team, focused on this all and beyond
day, every day
Customers will change
behaviors in non-reversible
ways, accelerating prior
Plan cascade of trends; bold action now can
set your company up for
possible actions more
success through the downturn
aggressive than your and beyond
team can imagine right
now
As CEO, it’s critical for you to be
out in front with a planned
cascade of possible actions
based on which scenarios unfold,
likely more aggressive than your
team can imagine right now
SYD 200402 India CEO webinar - COV ... 16
So… what should YOU be doing RIGHT NOW?
Act Now to protect
and run the business today
Protect
• How do I protect my people and my
How
immediate do I ensure
business needs?the safety
of my people and continuity
• How severe could the downturn be? How
of the business?
long might it last?
• How will this stress our business?
• How can we ensure the safety of our people
and continuity of the business?
How can I manage an unprecedented amount of change over the coming months?
How can we systematically learn as an organization from this ‘forced experiment’?
Plan Now to re-tool the business for the future
Recover Retool for the new world
• How quickly could demand return? Will • How might the post-pandemic world look
How
there do
be Ione-time
preparecatch-up
to quickly mobilize
demand? How do
different I adapt
than what wepropositions,
previously envisioned?
my people, maintain consumer capabilities, ways of working?
• How will this recovery vary across the • What existing trends will be accelerated?
relevance, and reactivate supply
portfolio (geos, segments, channels, What new ones need to be contemplated?
chains?
propositions etc.)? Which are now obsolete?
• What might be the operational, supply chain • How could these trends shift business
and channel constraints in meeting this boundaries, profit pools, and industry rules
demand? of the game?
• How do I adapt propositions, capabilities,
ways of working?
SYD 200402 India CEO webinar - COV ... 17
CEO checklist:
We recommend organizing efforts around the following six urgent priorities

MODEL YOUR PLAN URGENT

PROTECT YOUR EXPOSURE; STRESS STABILIZE COST TAKE-OUT,
EMPLOYEES AND TEST P&L AND DEFEND AGAINST OPERATIONS TO PRESERVE CASH & PLAY OFFENSE,
CUSTOMERS LIQUIDITY REVENUE DECLINES “NEW NORMAL” BALANCE SHEET NOT JUST DEFENSE

• Priority #1: Implement • Outline macro scenarios
the best known by market, translate to
safety/protection revenue decline and
guidelines available for stress test the P&L and
both employees and balance sheet
– Units, revenue, costs
customers – overinvest
– Cap Ex, working capital,
in safety
cash/liquidity
– 13 week, 4Q outlook
• Monitor global health
guidelines, other • Build extreme
companies - and downside scenarios
continue to fine tune (worse than your team
can envision)
• Over-communicate
• Outline major
with full transparency
operational actions that
• Determine how to impact liquidity
support communities by – Do now ‘handbrake’
actions vs. do-later ‘break
leveraging assets during
glass’ initiatives
crisis
• Manage investor
Relations
• Take a customer centric • Understand supply
view to this situation – exposure, and analyze
how will you build trust, and prioritize actions
loyalty and market share
• Stabilize supply chain of
through and beyond this
physical goods from
crisis?
likely geographic and
• Build specific revenue labor disruptions
– Manufacturing,
mitigation actions for
distribution, suppliers,
core revenue stream suppliers to suppliers
declines
• Build contingency
• Pivot resources to operational plans for
pockets of current and all aspects of business
– Front line facilities,
future growth, online
and beyond costs, variable labor
staffing
– Cross regional
variations in utilization
– HQ, IT
• Iterate as crisis unfolds
SYD
• Spend handbrakes
– Immediate actions (e.g.
hiring freeze, op ex, cap
ex, working capital)
• Set aggressive ‘break
glass’ cost actions
triggered by more
extreme revenue
scenarios
– This is (may be) about
saving the company –
no ideas are too extreme
• Mid-term, outline a plan
to lean out the cost
structure for the future –
more automated, more
variable, more shock
resistant
200402 India CEO webinar - COV ...
• Define how you will
outperform competitors
and take share through
and beyond the crisis
– M&A roadmap
– Product/service/
customer intimacy
investments
• Prepare for ‘bounce-
back’ and recovery
– E.g. Marketing
investment, leveraging
macro trends for “if,
then” moves
• Plan for and leverage a
‘leap-frog’ change in
customer behaviors
– Especially digital
18
What can you do NOW: Start taking actions
to PROTECT your people and business

Protect your Employees and Defend against revenue Plan urgent cost take out,
Customers declines preserve cash & balance sheet

• Over-communicate with both • Focus on e-commerce • Cash management

customers and employees acceleration
• Investigate cost structures
• Best in class safety • Ring-fence your customers (esp. zero-based budgeting,
standards as work resumes reduction in admin costs)

Model exposure, stress test Stabilize operations to new Play offensive not just
P&L and liquidity normal defensive

• Invest in WFH IT • Identify new M&A

• Manage investor relations
• Manage existing stock/ opportunities
• Build scenario for worst inventory against demand
case impact • Plan for product launches
for emerging new demand
Formalize crisis management room as ‘WAR ROOM’ to manage measures
SYD 200402 India CEO webinar - COV ... 19
We have assembled a “COVID-19 Response” approach to support
CEO priorities, that combines “Act Now” and “Plan Now” stances

Mission Act now to Protect and Run the Plan now to Retool the Business
business today for the Future

Safety and security Business Continuity Recovery New Normal

‘ WAR R O O M ’
Orientation
Mobilize the organization to protect the company’s employees,
customers and strategic flexibility

Prepare company and strategy to adjust to accelerated

structural changes resulting from a Pandemic-driven deep recession
‘ N E W N O R M AL’ Tr a n s f o r m a ti o n o f f i c e

Program Lead: Orchestrate: Do: Track:

Management Manage Disruption Leadership Alignment & Agile Teams with Daily Initiative Management
Approach &Tools Structured Work streams Results Rhythm

Companies must do both simultaneously, right balance between the two missions
depends on industry, company and geography. Some segregation of responsibility for these two missions
will engage your full leadership team and create focus
SYD 200402 India CEO webinar - COV ... 20
Topics for today

What are India

CEOs thinking How can YOU
How will COVID
about? What best to RECOVER Q&A:
play out? What
should be YOUR and RETOOL to What are YOUR
are learnings
plan to PROTECT equip your top of mind
from other parts
your company company for the questions?
of the world?
during this future?
crisis?

SYD 200402 India CEO webinar - COV ... 21

 Responding to the Crisis:
Recover and Retool for the new World
Coronavirus: A CEO’s Dress
Rehearsal for the new world
https://www.bain.com/insights/coronavi
rus-a-ceos-dress-rehearsal-for-the-
new-world-fm-blog/
March 16, 2020
• We are entering a new normal..
• ..but it’s only the dress rehearsal for
what’s to come
• While costs matter, this is a battle for
customer relevance
• If we act today, we will be stronger
tomorrow
• We’re all a little scared
The Great Retooling:
Adapting for the Coronavirus
Pandemic and Beyond
https://www.bain.com/insights/the-
great-retooling-fm-blog/
March 23, 2020
• Move from retreat to retool
• Put on your own mask before assisting
others
• Think costs fast, but owners last
• Prioritize private-public partnerships
• Evolve with the world and the job—
everything is different
The Coronavirus May Inspire
a Great Retooling
https://www.bain.com/insights/coronaviru
s-may-inspire-a-great-retooling-fm-blog/
March 30, 2020
• Rally around a Big Idea
• Reconsider your assets and think
beyond traditional boundaries of the
Firm
• Prepare for two different types of
customers, and multiple scenarios
Lessons from the “Great Retooling” of WWII for CEOs of 2020
Lessons from the Great Retooling
Rally around a Big Idea:
1940s CEOs fully embraced the ideas of
mass production and a global mindset
Reconsider your assets & think
beyond traditional boundaries:
Competitive dynamics and role of the
Government changed, public-private
partnerships became key to survival
Prepare for two different types
of customers, and multiple
scenarios:
Almost every CEO underestimated how
much the American consumer was
transformed by the war
Implications for the 2020 Class of CEOs
• Re-imagine how you will manage the three great conflicts in the
new world:
– Scale vs. Intimacy
– Routine vs. Disruption
– Short term vs. Long term
• The Firm of the Future will be defined more by its partnerships
(with competitors, suppliers and governments) than by its own assets
• Global CEOs may need to consider how the boundaries of their firms
can match the new boundaries that the governments of US and China
will create
• Don’t underestimate how profound crisis will change your
customer – prepare to stay relevant to different cohorts
• The adaptability you are building should be the new norm: As you
move from ‘protect’ to ‘recover’ to ‘re-tool’, you will live in a world of
scenarios…and build a team adaptable to weekly changes
SYD 200402 India CEO webinar - COV ... 23
Some questions for self-reflection:
Rally around a • How can we redefine the role of the center to leverage remote digital platforms being built now
Big Idea during lockdown?
• How will we reach your consumers faster and better via true partnerships from factory to home?
• How can we reimagine the company as a ‘team of teams’ - mobilizing/ demobilizing quickly around our
most important priorities?
• How do we combine the best of global and multi-local, never again leaving our local customers
without products because global resources are trapped in local lockdowns?

Reconsider your • How will the lessons of this crisis reshape the boundaries of the firm? Who are vital proven partners
assets and think we will move closer to, and who will we move away from?
beyond traditional • To what extent will we be able to operate as a single firm with a common set of values across
boundaries of the Firm markets – when markets like US and China might drift apart because of government policy?

Prepare for two types • What are the most important consumer cohorts that will emerge from this? How will we shift resources
of customers, and between the extremes of ‘bounce back’ and ‘forever changed?
multiple scenarios • How good are we at predicting/ forecasting scenarios? Are we able to adapt quickly to changes (if
scenarios materialize differently)? Are we resilient enough to withstand unforeseen shocks?

What are the key moments of truth that will signal/ define us as a company,
and how can I begin to create them now? SYD 200402 India CEO webinar - COV ... 24
 Dominant ideas about the firm change about every 50 years…

1790s 1830s 1870s 1920s 1970s 2000s Today

Precursors Scale Early Trusts Professional Shareholder Scale

to modern apprenticeships industrialists Management Primacy Insurgency
firms

Trading
Empires

SYD 200402 India CEO webinar - COV ... 25

…what made Professional Management work is only
one part of what companies need now

Scale Routine Deliver

vs vs vs

Intimacy Disruption Develop

SYD 200402 India CEO webinar - COV ... 26

We believe that companies are now on an accelerated “Firm of the
Future” journey

Scale The “What” The “How”

insurgent Scale, speed,

and intimacy
From professional
managers to

playbook
mission-critical roles

Business Micro-battles
building, not and the three
just innovation communities
The “WHY”
Insurgent Mission
Networks (Humans at the
center of the firm) New deal for talent,
and platforms,
new behaviors for
not just assets
leadership

Flexible One company,

capital two systems
SYD 200402 India CEO webinar - COV ... 27
Topics for today

What are India

How will COVID CEOs thinking How can YOU
play out? What about? What best to RECOVER Q&A: What are
are learnings should be YOUR and RETOOL to YOUR top of
from other parts plan to PROTECT equip your mind questions?
of the world? your company company for the
during this future?
crisis?

SYD 200402 India CEO webinar - COV ... 28

Closing thoughts…

THANK YOU for Materials We continue to develop

JOINING - hope you presented today topical, actionable material
carry with you some will be circulated on COVID-19 as we navigate
useful takeaways shortly this crisis

To access our latest on

COVID-19, visit
COVID War Room:
bit.ly/Covid19Bain
Macro Trends Group:
bit.ly/MacroTrendsGroup
For further questions:
Karan.Singh@Bain.com
Nikhil.Ojha@Bain.com
SYD 200402 India CEO webinar - COV ... 29
THANK
YOU