Are you ready for a Post-Pandemic Business World ?
The economy has been hit hard by the pandemic, much more drastically than any ‘normal’ business cycle. The lockdowns have created new ways of living and working that people have been forced to accept. These changes will form new habits and behaviours that will change society as whole. Society will not allow “things” to go back to ‘normal’ as we knew it and business leaders need to face up to that reality now! A return to pre-pandemic ways of operating is not an option.
Companies need to rethink their business and operating models. To trigger this thinking and behaviour, we need a new language – the word ‘transformation’ has lost its meaning (and words matter). It’s a term that’s misunderstood and misused. The word has become synonymous with adding new channels and improving operational efficiency. Essentially, optimising what companies are already doing – not transformation. Therefore, continuing to use the term ‘transformation’ may lead to leaders believing that they already have things in hand as most will have some change going on with the ‘transformation’ label attached. What we need, to change the narrative and therefore the thinking, is an new term, perhaps ‘business transmutation’ for a post-pandemic business world ?
No company has survived deep recession by maintaining the same state that they entered it. The current recession has not just hit the economy, it has reshaped parts of our social fabric. Part of the post-pandemic challenge will be to serve customers who are living in new “social circumstances.” The growth of millennials, and the emergence of Generation Z, in the workforce will also drive different expectations as consumers as well as employees.
Many companies are on a journey through the current pandemic. They first moved from pre-pandemic, into survival, then stabilised and will then have to transform to thrive in a post-pandemic world. The effects of the pandemic have had a catastrophic impact on the workforce. Many people have been furloughed, and a high number made redundant which, in turn, has depressed aggregate demand for goods and services. On top of this, our current economic model may have reached the end of its shelf life, and the pandemic has hastened it further. As a result, we may see a drastic reduction in the levels of consumption, and therefore growth, that we have seen in the past. This means companies cannot afford to continue as they did – it’s not the same world anymore.
We are seeing a consumer revolution. Forced off the high street, consumers have demanded new ways of engaging with brands, in the way they acquire and consume products and services. Wanting more for less, they will not countenance a return to pre-pandemic models.
Many companies, who have been found wanting through their operating models and infrastructure, have not enabled them to be flexible, agile and resilient in order to respond to the need for remote working, new ways of servicing customers and implement Covid-safe environments. The pandemic has changed consumer behaviour and people are shopping online more than ever. On-line “laggards” have become on-line converts, grateful for the convenience they experience while working from home, using digital tools, and getting much more for less.
Digital is not just another channel. Organisations need to ensure that their operations and supply chains are digital too, in order to serve their customers effectively through digitally intuitive processes that work in a digital world. Not digitised versions of processes that were conceived in a pre-digital world.
Previous ways of thinking, that worked in the past, may not work now. Maintaining the status quo in the hope that what has made you successful in the past will continue to do so for the future is not a strategy. However, genuine business transformation can be very risky and for most companies it’s a risk not worth taking, especially if CEOs and their boards are rewarded for annual performance – why rock the boat, if you can still squeeze out the numbers for this year?
We need a new way to make the process of ‘transmutation’ less risky, whilst still achieving transformative outcomes. One way could be to incubate your ‘newco’ (a new variant of your company) whilst stilling operating ‘oldco’ (the existing version of your company). The successful incubation of a newco can then evolve to become the transmutation of oldco. Ideas for ‘newco’ could be incubated via an annual ring-fenced budget to find new innovative ideas. There is no guarantee that any of these innovative ideas will work, but for each failed idea, you will gain valuable insight and learning, until you find one worthy for newco.
In general, the skills, capabilities and infrastructures exist, within organisations, to support post-pandemic innovation, reinvention and remodelling. For the post-pandemic operating models to be designed and implemented with pace, and with sustainable results, the evolution must come from within, by unlocking and harnessing these latent capabilities, and leveraging new technologies such as blockchain, AI, machine learning and automation. Key to leveraging the collective intelligence that exists in the organisation is cultivating the right environment to pull your people in, and not push the change on them, otherwise the cultural ‘antibodies’ will seek to reject it.
We believe the business world, as we know it, is changing. What we don’t know is what exactly it will change into. Companies that don’t recognise this, and don’t start to think about the organisation that they will need to become, will be left behind.
Are you ready for a post-pandemic business world ?
Chris Bevan and Ken Leung are Co-founders of Outvie Consulting