Amazon is hiring while Hyundai is delaying claims. Should we really call it crisis?


We have all heard that "the best way to predict the future is to create it." Though it is not easy to see the future clearly but being ready and studying the risk by scenario planning seem the only way.

CoronaVirus got to pandemic level and many businesses are at risk but there are few companies that without abusing the situation are growing up and of course many more that either disappear completely or they have to downsize their model to survive. What we learn from the crisis should light up the future.

1. Everyone is laying off but Amazon is hiring! How come?

On March 16th, 2020 Amazon announced that they are opening 100,000 new positions in their fulfillment centers and investing $ 350 million globally to increase the salary of the centers for 2 more USD, GBP, EUR and, etc based on the country that workers are hired to appreciate their job and their role in the current situation.

Let's briefly study the case:

Apart from innovation and disrupting, what makes Amazon stronger is intelligent scenario planning. Many business leaders assume that scenario planning is equal to focusing on success factors and then assuming what happens if the business process gets affected a few percent higher or lower. They don't think what happens if the process completely stops!

I give you an example: When China got the virus as the first country many huge manufacturers got affected since their raw materials or parts are produced in China. These companies were never assuming that the entire process may stop one day in their scenario planning. They all saw the worst-case scenario might be disruption of the supply chain for a few days and they covered it by predicting safe stocks.

Apple as well as many car manufacturers were not ready for a long-term stop!

The first advice from supply chain experts was spreading suppliers all over the world and assigning different volumes based on their price, distance, and quality.

Getting back to Amazon's case, these guys must have planned a scenario that if once processes get disrupted then they need different suppliers from different regions. Or from the very beginning, they knew that having a complete product portfolio will save them to switch on necessary products in crisis. Don't doubt that they didn't go through these uncertainties many times as you see in their plans for hiring more people or switching on the needs of the market based on the crisis. On March 17th, 2020 they announced that since the demand for household staples and medical supplies is going higher the fulfillment center's focus will be on these products and other partners should deliver their products on their own until the 5th of April. This means proactive planning by studying risk and scenario planning.

2. Not a good time to delay claims. So what's up with Hyundai?

If anyone owes us money, the best time that we need it back is when we are in crisis. It is obvious!

But some businesses see a bit further. They are trying to convert threats to opportunity.

Hyundai Motors is one of them.

When Hyundai entered the US market, it was very difficult for them to compete with American, Japanese and German brands. Developing the market share was important but almost impossible until the 2008 financial crisis came up and Hyundai was prepared for it very well. Immediately, they announced that if any customer loses her/his job then the company accepts the car back. This meant reducing the risk of new buy and giving the chance to have a new car and eventually less expense of maintenance in crisis. The situation got better after months but people by that time got familiar with the Korean product, they tested the quality and they started believing in the brand completely.

A similar story is happening now. Again in the US market, Hyundai relaunches unmatched assurance job loss protection program.

Basically, they practiced the future once in past so why not another time!

Risk-based scenario planning is not about underestimating or overestimating success factors since in this way we cannot come up with a practical plan. It is more about building up an alternative that practically works in crisis with less loss or expense.

Are we ready for another one? It might be somewhere around!