Going virtual to survive Lebanon’s financial crisis

IN BRIEF

• The virtual working model benefits employers and employees.
• It has the potential to foster decentralized economic growth.
• It can be a shield for businesses in times of crisis.

The political crisis in Lebanon has compounded an economic crisis that has been looming in the shadows for decades. News of business closures, salary reductions, and layoffs are added worry to Lebanese already struggling under the burden of the ongoing liquidity and financial crisis. Without urgent reforms, the economy is at risk of experiencing a deep recession.

Adapt to survive

The current—and potential—consequences of these twin crises are catastrophic, especially to Lebanese businesses. In order to survive, companies must reduce their expenditures. Unfortunately, the first instinct in these circumstances is to lay off employees—this will only further damage the economy in the long run.

Instead, companies must adapt to survive. This is where the virtual model can play a huge role. A virtual business conducts all or most of its business via the internet, eliminating the challenges faced with office costs, with geographically unattainable talent, and with scarce cash flow. There is a growing body of evidence to suggest that, if adopted correctly, the virtual model can be both productive and lucrative. Advanced digital and IT transformation strategies have led internationally to success for a diversity of companies such as Dell, Articulate, and Buffer. In Lebanon, however, companies are not yet embracing this change. With the current crisis, they may be forced to.

Adopting a remote working model has mutual benefits for employees and business owners. The latter can save on their costs—electricity, internet, rent, office supplies, and talent retention—as well as gain more flexibility in their business management, while the former can save on fuel, time spent in traffic, food, and professional wardrobe costs, and can have an economic advantage over colleagues who are reporting to the office. In Lebanon’s case, current instabilities will have a reduced impact on businesses adopting a virtual model as employees will be able to continue to work unaffected by road closures from the ongoing protests.

The virtual model also has the potential to influence on the country-wide economic level, as towns outside of Beirut could benefit from flows of income and investment. Virtual working allows employees to stay in their hometowns rather than migrate to the capital, and their spending and investments in these towns, if at a large enough scale, could help foster a decentralized boost that would contribute to Lebanon’s economic growth.

Can it work?

Going virtual is a big change that requires time and effort. If implemented correctly, this model can help businesses survive during difficult times.

Not all businesses can operate remotely, however, and for those that can, there are varying levels of difficulty making the shift to a virtual operation. If a business has a clear organizational structure and tasks lists, the shift can be smoother. On the other hand, businesses with complex organizational structures that are not able to remotely access their files will have a hard time.

The virtual model also requires the use of web tools to manage virtual teams. These tools are already available on the majority of laptops. Companies can also purchase more sophisticated tools as part of their fixed costs.

Successfully virtualizing a company’s infrastructure and operations is also heavily reliant on the team. As businesses strive for a complete reform, one of the biggest impediments is finding employees with the right skillsets.

A final, and key, factor is trust. Managers should earn their team’s trust by providing them with the right tools, training, and space to thrive.

Employees should also demonstrate their commitment through an organized and timely workflow. It is only by combining all these elements that a business can become a virtual success.

As Lebanon races against time to avoid an economic crash, companies should take measures to protect themselves and their employees. The virtual model could be the armor that shields a business from financial catastrophe. It can also play a part in revitalizing the economy outside of Beirut.