MAP Insights

The crisis in the Middle East may ultimately prove more difficult for business than COVID-19.

 

During the pandemic, there was at least a clear response. Stay home. Get vaccinated. Shift work and commerce online. Governments, businesses, and households may have struggled, but there was a playbook.

 

This time, there is none.

 

The risk today is not a virus but rising oil prices, and oil touches every aspect of the economy. When fuel prices rise, transport costs increase. Logistics costs go up. Food becomes more expensive. Electricity, manufacturing, and even the cost of doing business increase. Unlike COVID-19, where the effects were immediate but contained by restrictions, this crisis moves quietly through the entire economy.

 

For the Philippines, which imports most of its fuel requirements, this is particularly serious. President Ferdinand Marcos Jr. has already recognized the danger through Executive Order No. 110 declaring a national energy emergency. The concern is not only what happens in the Middle East in the coming days. It is what happens here at home in the coming months.

 

Even if the conflict de-escalates, the economic effects may linger. Oil prices may remain elevated. Supply chains may take time to normalize. Food inflation may persist. Consumers may cut back spending. The pressure will be felt most sharply by lower-income Filipinos, who comprise the majority of our population and who spend a larger portion of their income on transportation, food, and electricity.

 

Many people keep asking when the war will end. My answer is simple: we do not know, and from a management standpoint, that is the wrong question.

 

Business leaders should stop waiting, forecasting, or speculating on whether the conflict will end next week, next month, or next quarter. None of us can control that. What we can control is how prepared our organizations are if uncertainty lasts longer than expected.

 

We are no longer operating in a world where stability can be assumed. Geopolitical conflict, inflation, supply chain disruption, cyber threats, and economic volatility are now part of the business environment. The organizations that will survive and succeed are not those that make the best predictions. They are the ones that build the greatest resilience.

 

The task of management today is not to guess when conditions will improve. It is to create organizations that can continue to perform even if conditions do not.

 

That is why many companies are beginning to revisit the protocols they adopted before and during COVID-19. Work-from-home (WFH) arrangements are again being discussed. Rotating schedules, compressed workweeks, and virtual meetings are returning. Companies are preparing not because we are facing another pandemic, but because they recognize that a prolonged energy and inflation shock requires a similar level of discipline and flexibility. Thus, I believe there are five things every company should focus on today.

 

1st, take care of your people.

 

The first and most immediate effect of this crisis will be felt by employees. Higher fuel prices will eventually mean higher food prices, higher transportation costs, and greater financial pressure on households. Many employees are already managing tight budgets. For those in lower income brackets, even a modest increase in the price of gasoline or rice can create significant strain.

 

Companies need to be proactive and sensitive. Review transportation allowances, meal subsidies, emergency assistance, and flexible work arrangements. If certain roles can be performed remotely, then WFH or hybrid work should be seriously considered. This is no longer simply an HR issue. It is an operational and economic response to changing conditions.

 

Equally important is communication. Employees need to know that management understands the situation and is responding. During difficult periods, people do not expect perfection from leadership. They expect clarity, empathy, and decisiveness.

 

2nd, preserve cash.

 

The lesson from every crisis is the same: cash provides options.

 

During COVID-19, the companies that weathered the crisis best were not always the largest or the fastest growing. They were the ones that protected their cash position early, managed expenses carefully, and prepared for the possibility that the crisis would last longer than expected.

 

The same discipline is required now. Companies should review expansion plans, defer non-essential capital expenditures, reduce discretionary spending, and strengthen working capital. Large investments that can wait should wait. Growth is important, but survival and stability are more important.

 

This is not the environment for aggressive assumptions. Business leaders should prepare for a scenario where oil prices remain high for several months and consumer spending weakens. The companies that preserve liquidity today will be in the best position to respond tomorrow.

 

3rd, rethink operations.

 

The operating model that worked six months ago may no longer be the right one today.

 

Businesses should look at whether rotating work schedules, compressed workweeks, staggered shifts, or WFH arrangements can improve efficiency and reduce cost. Companies should review energy consumption, logistics routes, delivery schedules, and supplier relationships.

 

Many organizations learned during COVID-19 that productivity does not always require everyone to be physically present every day. They also learned that digital tools can reduce travel, lower costs, and improve efficiency. Those lessons remain relevant.

 

This may also be the right time to revisit supply chains. Companies that rely heavily on imported materials or a single supplier may be more vulnerable if the crisis deepens. Building alternative suppliers and increasing local sourcing where possible may no longer be a matter of cost. It may be a matter of resilience.

 

4th, move sales and marketing back online.

 

If oil prices continue to rise, consumer behavior will change. Families will reduce discretionary spending. People may travel less, dine out less, and spend less time in malls. Retail traffic may soften, particularly in sectors dependent on physical visits.

 

That does not mean demand disappears. It means demand shifts.

 

During COVID-19, many companies accelerated their move to digital platforms because they had no choice. Today, they may need to do so again, not because stores are closed, but because consumers are becoming more cautious and more value-conscious.

 

Sales teams should strengthen online selling, virtual presentations, and customer relationship tools. Marketing should move where consumers are spending more of their time: online, on social media, and on digital commerce platforms. Businesses that remain visible and accessible digitally will have a much greater chance of protecting sales in a weaker environment.

 

This is particularly important for SMEs. Many SMEs survived the pandemic because they learned how to sell through Facebook, TikTok, Viber, online marketplaces, and delivery platforms. Those capabilities should not be treated as temporary. They are now part of the permanent toolkit of doing business.

 

5th, focus on resilience, not simply survival.

 

The tendency, in times like this, is to focus only on the immediate problem. But good management requires looking beyond the next few weeks.

 

Every company should ask itself a few difficult questions. What happens if oil prices rise further? What if inflation persists through the rest of the year? What if consumer demand slows more than expected? What if supply chains are disrupted again?

 

The strongest companies will not be the ones that merely react. They will be the ones that prepare.

 

That means strengthening business continuity plans, building stronger balance sheets, diversifying suppliers, investing in digital capabilities, improving energy efficiency, and developing leaders who can make decisions in uncertain conditions.

 

The world today is more volatile than it was five or ten years ago. Geopolitical conflict, inflation, climate events, cyber threats, and economic disruption can happen at the same time. Stability can no longer be assumed.

 

We all hope the conflict in the Middle East ends soon. But even if it does, the after-effects may remain. That is why business cannot afford to wait.

 

The challenge before us is not simply to survive another crisis. It is to build organizations strong enough to withstand one.

 

(The author is President of the Management Association of the Philippines (MAP). He is also President and COO of DITO CME Holdings Corporation. Feedback at <map@map.org.ph> and <donaldpatricklim@gmail.com>).