February 3, 2020

Shock Events and Agility

By: rina kurniawati, lecturer of tourism department at sahid polytechnic jakarta

No one in the world could ever predict the crash of two sophisticated Boeing 737 Max, happened last year, killing hundreds of passengers. Also, the spread of the epidemic outbreak of the corona-virus that killed hundreds of people in China. No matter how sophisticated a person, business entity or country, there are always unpredictable events that happen beyond the control of human capacities. The advancement of technology is not compatible with invisible forces that can totally change conditions, flipping it into chaos. These shock events will certainly have an impact on the stability of the business, either loss of income, market, or closure of business operation. The occurrence of these shocks shows how vulnerable is the tourism industry to shock events. No single entity is immune from the impact of external forces.

Although the role of technology has received a lot of attention in the tourism field which is considered a key aspect that drives in the operation of the tourism industry. Yet there is another important thing that one should not forget about- the need for safety. Apparently, people do not necessarily need more high tech airplanes, they simply need to have an airplane that can land. Same with the destination, people travel to destinations considered safe and will avoid those that are considered unsafe. Although China has advanced technology, it still cannot predict the occurrence of epidemic diseases.  Indeed, the tourism industry needs safety as its basic foundation to operate. This does not mean the technology is bad or not important, but it is less important compared to safety.

In today’s world that is full of uncertainty,  sometimes organizations have to deal with shocks which may not be favorable. These shocks may require responses different than the regular business operation, particularly within the short term horizon where the immediate impacts are felt.  Businesses,  directly or indirectly impacted by the events, need to be agile in responding to such shocks to sustain the continuity of their operation.

The act of agility can take different forms to respond to the problems. In certain circumstances, business closures may be unavoidable to reduce the impact of shocks. As businesses are inactive, they need enough savings to cover up the operation for the days that they are not in operation. Starting to have an insurance plan is a good idea to prepare businesses from unexpected events. Business needs to change the methods of the products or services in a quick way to address the problems. Late response to address the problem can cause more damaging effects and distrust from the consumers. Businesses also need to regain the consumers’ confidence when the problems have been resolved. The role of communication is important to send a positive message that businesses are ready to re-open.

The case with airplane crash demand management to focus on product performances, innovation, and safety while resolving the negative images portrayed by the incidence. Leaders have a crucial task to acknowledge problems and explain the course of action to tackle the problems. Showing humanity and empathy for the issues are needed rather than respond with defensive and denials. Similarly, evacuation of people in the destination affected by epidemic diseases and temporary business closures are taken to minimize the spread of the diseases. Safety is a primary priority for the tourism industry.

Shock events teach us that we should not only learn from experiences to avoid the problems we might encounter in the future but also be able to prepare for unexpected events. Humans have limitations that we can never have an accurate prediction for the future, although we have the most sophisticated technology on our hands. The fact is the tourism industry is vulnerable to shocks and we need to understand it. When shocks occur, we need to fully notice the consequences on our businesses and to work on aspects that we can control and manage accordingly.