Crisis Response Management, Established as a Constant Not a Variable... 'HIP Management' Takes Root

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[Asia Economy Reporters Hwang Yoon-joo, Lee Dong-woo, Yoo Je-hoon] 'H(healer)·I(intuition)·P(planned planless)'.

Over the past four months since the first domestic case of the novel coronavirus infection (COVID-19), it has been identified that domestic companies have tightened their emergency management reins focusing on 'Healer, Intuition, and Planned Planless.' Due to COVID-19, so-called 'HIP management' is becoming a constant rather than a variable.

According to the business community on the 14th, major domestic companies have significantly expanded the size and capabilities of organizations managing employee health and hygiene in response to COVID-19. This serves as a kind of 'healer' role to protect members from disasters or sudden crises and help them recover quickly to normalcy. While safety and environmental management had been dominant in companies, health management has emerged as a core organizational focus due to COVID-19.

A representative example is SK Group. Since 2014, it has introduced a Safety, Health, and Environment (SHE) management system across all affiliates, and earlier this year, it elevated the SHE organization under the Super Executive Council to an executive level and placed it directly under the chairman. Thanks to this, SK Group was the first among large corporations to implement full-scale remote work at the early stage of COVID-19, leading changes in new work styles. Samsung Electronics promptly formed a COVID-19 response task force (TF) around mid-January when the first domestic COVID-19 case was confirmed, and thanks to companies functioning diligently as a single immune system, organizations have been protected from the COVID-19 threat. POSCO is also operating an emergency quarantine system centered on the Safety Innovation Emergency Response TF under President Jang In-ha.

Field-centered intuitive management to minimize corporate damage has also become a culture. For example, an automaker shifted its production plan from a monthly schedule to daily segments, enabling on-site judgment and real-time decision-making. A head of an overseas subsidiary of a manufacturing company said, "Considering the emergency, we allowed short-term production adjustments on-site based on sales volume, and decision-making was more flexible and execution quality improved more than expected." Semiconductor companies like SK Hynix are operating management systems that check supply and demand trends daily for global suppliers including PC and server companies, materials, and equipment, responding swiftly to risks in real time. LG Group reduced its biannual business report meetings to once in the second half of the year for the same reason. An LG Group official explained, "In a rapidly changing business environment, we discuss major affiliate strategies frequently and make decisions to respond proactively and ensure quick execution."

As the COVID-19 situation enters an unpredictable phase like a rugby ball bouncing in any direction, companies have fallen into a 'planned planless' state. Although maintaining a continuous contingency plan system, scenario-based planning has become meaningless, making improvisational responses inevitable. They are unable to provide annual performance forecasts. Samsung Electronics Vice President Seo Byung-hoon said at a conference call last month, "It is difficult to gauge the extent of COVID-19's impact and damage," adding, "Providing annual guidance is also difficult."

The aviation industry's concerns are even greater as it faces an existential crisis. Due to the nature of logistics and transportation industries, if the route network cut off by strengthened entry controls in various countries does not recover, operations are impossible. With the spread of COVID-19 and the global economic recession, the situation has become zero visibility. Initially, the aviation industry optimistically expected demand to recover in a U-shape and approach normalcy by the fourth quarter of this year, but recently pessimistic forecasts have spread, such as after this year (aviation consulting group CAPA), over 18 months (Emirates Airline CEO), or 2-3 years later (Boeing CEO). It is practically impossible to establish business plans.

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