The past few months have seen the world thrown into turmoil; as one popular meme puts it, we’re all awaiting a return to “precedented” times. But we all know that won’t happen.
McKinsey calls it The Next Normal. Satya Nadella has crystallised the three phases of recovery (First Response, Adjusting the Dial and No Turning Back), the final stage emphasising overall structural change to organisations if they are to survive going forward.
Now that we’ve accepted that the past is a thing of the past, how should the corporate landscape evolve? While each industry will have its own goals and metrics, there are probably a few key factors we can all agree on.
When the crisis hit, it’s likely that your budget was the first to be cut. Thankfully, you didn’t moan about it, you were proactive and tried to access customer hearts and minds by giving them all the feels – your company donated to relief efforts; your colleagues responded to your rallying cries by sharing what they had with those less fortunate. You didn’t go off-air, you pivoted, using every trick in a Marketing 101 textbook: social influence, decoys, NOSTALGIA (I’m looking at you, SuperSport – screening Mighty Ducks was a stroke of genius).
Now, your most useful weapon is going to be your customer data – new behaviour and spending patterns are emerging. How will you track this to stay relevant? How will you make the regulations work for you? One local travel company was so wide of the mark when Level 3 hit, encouraging me to book my dream vacation as soon as possible. My security company sends me a daily text to remind me that my home will be safe while I’m away. Don’t fall into the trap of doing what worked before. We’ve all moved on.
You and Taleb have been vindicated! You warned everyone that black swans exist and our current reality is the biggest flock of black swans the world has ever seen. Because now is not the time to sit back and gloat, you’ve probably been the team member hanging on to every word from the economists, epidemiologists and even the WhatsApp University experts in your midst. You’ve calculated the short-term risks in terms of payment default, employee health, extended lockdown and minimised your company’s exposure.
But you also know that pandemics and their associated risks are always lurking; going forward, you need to harness the I-told-you-so vibes to assess whether your current business continuity plan was robust enough and make the necessary tweaks in anticipation of the next crisis. You need to find ways to extend your tolerable disruption period. And support the CIO in his/her call for updated tech! You know more black swans are coming. And so did Taleb.
Assuming your company doesn’t sell tech itself, you’ve been telling the exco for years that the overarching organisational infrastructure wasn’t fit-for-purpose and was literally sticky-taped together. Once we went into lockdown, you and your teams were heroes in crisis mode, making sure the company could work remotely. You explained, not for the first time, how to set up a Teams meeting.
But now your portfolio can no longer be on the grudge purchase section of the balance sheet. You need to insist that the technology function forms an integrated part of the business plan and you need to know the whole business yourself; what good is it having a fancy, new automated product/plan/process if IT is the last to know about it and becomes a stumbling block on the path to execution of strategy? Technology is getting us through the crisis and will certainly be the driver of our survival thereafter. The World Economic Forum has highlighted just ten key tech revolutions that have accelerated development during the pandemic – how many more will there be and which one will you be responsible for?
You’ve trimmed the fat to reduce your operating costs. You’ve preserved your cash reserves. You’ve refinanced your debt. You’ve mitigated against the risk of debtors who can’t pay.
But, now that the world has been turned upside down and there’s little predictability in whether your current business model will remain successful, you need to redeploy working capital into the clear money-spinners from the past ten weeks. Knowing that the business needs to pivot to stay relevant, don’t be the Scrooge but, rather, encourage investment into R&D and innovation. If your appetite for risk is high, go on a predatory M&A spree, adding to your portfolio those companies whose value may have suffered during this period. The Wall Street Journal reported that dealmaking in the US was at a seven-year low in Q1 but Accenture provides the perspective that (historically speaking) companies that persevere with M&A during a downturn typically outperform those who do not. Not only could this add to your own bottom line in the short-to-medium turn, but you would also be helping to save jobs.
Over the remote working period, you’ve been holding space for your colleagues, trying to make everyone feel connected and ensuring no man gets left behind, emotionally, mentally or strategically. As lockdown rules have eased, you’ve also spent way too much time issuing return-to-site permits.
But what now? The unfortunate reality is that many companies will be effecting retrenchments, a process you will be an integral part of. But this could also be the time to motivate for alternate employment models. The gig economy is flourishing; you can make that happen for your organisation. If entire departments will be made redundant, you can work on upskilling and reskilling affected teams to make them relevant to another division. But, perhaps most important, now that the company has proved itself capable of working offsite, without being watched, you can help the culture evolve from the command-and-control model to one of trust-and-care.
The person who holds it all together. You’ve built a war room and had your trusted advisors (mostly the people mentioned above) at your side. As we’re not all built for wartime, you’ve hopefully drafted a few additional recruits or a coach to aid you in your crisis decision making. You’ve been transparent so that nothing was left to nervous imaginations.
And now…now that the urgency of survive or die has dissipated, you have to make the hard decisions – aggressive promotion or deep discount? Extreme cost-trimming everywhere or ruthless chopping of limbs? You’re dealing with a quadrilemma – where do you find the balance between employee wellbeing, economic survival of your company, encouraging responsible buying for your customers (driven by ethical sales by your salesforce) and upholding your agreements with your suppliers? Whatever the strategy, your ultimate goal is to ensure sustainability of the company. We’re still in survive or die mode – the only difference is that now we have a bit more time to breathe; use it well and continue to be transparent with your shareholders and stakeholders.
Ultimately, nobody knows how this will play out; we’re all doing our best but, at times when we don’t have the answers, it helps to draw on shared wisdom and have additional conversations with trusted partners (as our clients have been doing, in order to supplement the capability we’ve discussed here). And, if you do have some of the answers, please share them. After all, we’re all in this together.
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The impact that the COVID-19 pandemic has had on the world is mind blowing. It is hard to fathom. Industry has changed, and the way we do business is different.