Review, recover and reinvent your business

Business as usual is NOT possible anymore. The global COVID-19 continues to pressure-test every individual, business and country, at least in the short to medium term, and we are all succumbing to this unpalatable fact.

As we gradually come out of Covid-19 lockdown, businesses will need to pivot and adjust for a new world that is responding to and recovering from this global pandemic disruption.

The collective behaviour and confidence have unquestionably changed. Structural changes to the way we work, the workplace and the workforce continue to happen. Within an organisation, financial dynamics, capacity and resources to respond will also need to change. These elements also need to be balanced against business outcomes and development of talent to create greater business resilience within an uncertain operating environment.

Two pulse polls taken at the end of May 2020 by the Institute of Innovation and Knowledge Exchange (IKE) of its 50 Innovation Council member organisations, representing all economic sectors, have revealed interesting responses, as outlined below.

Some 50% of respondents said that the Covid-19 crisis has damaged their business in the short term (six to 12 months), 33% felt that the inflicted damage caused by the pandemic will have a lasting negative effect, and 17% stated that the coronavirus crisis is likely to generate a long-term benefit for their business.

However, most interestingly, no respondent claimed they had received a short-term benefit as a result of the virus. While it’s difficult to completely ascertain the real motivation behind the zero-response to the short-term benefit choice, it can, perhaps be attributed to a lack of business confidence that has been brought about by ambiguous public health and economic policy responses.

This question intended to assess where C-suite executives are likely to focus their efforts over the next 12-18 months.

Surprisingly, only 9% of respondent are intending to focus on cost-optimisation and efficiency improvement to drive productivity up, whilst 27% are looking to focus investments on re-evaluating and re-assembling their capabilities.

An overwhelming 64% of respondents have cited the need to experiment to reimagine and reinvent their business models. The common theme that is driving all of these behavioural responses is the need to reassert confidence in their business minds as well as in their market places.

What IKE has observed over the past two months is an intensifying pace of innovation by business leaders, with a view to securing business viability and ensuring speedy recovery in the short to medium term, while at the same time escalating the drive for reimaging their business models over their strategic planning period.

In solving today’s dynamic problems, businesses are required to adopt more adaptive processes that assess the ‘level of burden’ across competing priorities. They need to embrace sprint experimentation, generate new ways of thinking, and guide adjustments that need to be made within the organisation itself, to its customer/user base and, beyond that, to its ecosystem.

Planning and making strategic choices within a truly ambiguous business landscape requires business leaders to apply and enable the two essential features of agility and flexibility, coupled with consistent communication to manage fear and uncertainty. These combined features are crucial when it comes to plotting future scenarios for a business in these current uncertain times.

Contrasting the degree of effectiveness of public health responses to that of the effectiveness of government economic policy will create multiple scenarios ranging from a V-shaped health and economic recovery (virus contained; strong economic growth rebound projected) to an L-shaped recovery (pandemic escalation; prolonged downturn without economic recovery).

Organisations can transition themselves out of the chaos, by activating a three-phase action plan of review, recoverandreinvent.

The review phase tackles the short-term issues of intensifying efforts to address any disequilibrium and associated chaotic activities. This phase should focus on temporary fixes that keep people safe, ensure operation of essential business functions and prevent any financial haemorrhage. Typically, this phase should not exceed a 90-day action plan.

The recoveryphase should be more organised and coordinated in terms of executing efforts to allow the organisation to stabilise and heal. Essentially, this is also the time to restart key planning activities such as re-budgeting, re-hiring and restoring a scalable state. Patterns and trends will begin to emerge, and these will form the basis for future strategic intents.

During this phase, it is important to ensure that discretionary funds are available to support rapid experimentation of new, flexible ways of operating, while deploying cost-optimisation measures to preserve financial integrity. Minimum viable data should also be used to guide decision-making processes.

Other features of this phase should also include a deliberate focus on existing customers, recognising potential changes in customer journeys; allowing inclusive decision-making and governance through empowering employee participation and active engagement; protecting digital transformation initiatives; and ensuring any of the short-term actions do not impede any potential long-term growth. Typically, this phase should not exceed 180 days.

The business model reinvention phase should be more strategic, in that it utilises all the learning gained and emergent patterns from the initial two phases and implants a new set of values and principles, enabling organisation to do things in new ways that are repeatable and scalable. This is where wise leaders will seize the opportunity to reimagine their business and operating models for the new reality, and create new and novel pockets of growth for their businesses.

It is worth pointing out that all the three phases should all be initiated almost at the same time so that the organisation, its people and ecosystem partners and customers are sensitised to the expected transitioning. Again, the need for persistent communication and clear messaging must not be underestimated during this process. During a crisis, communication is a light in the darkness for people to follow, and gain comfort from.

A pre-and-post triage of business alignment for each of the three phases should be undertaken to dynamically assess the business model response to continuous changes, and identify new risk-opportunity profiles. In addition, key performance indicators for each of the three phases, for example revenue and funding from different sources and percentage of revenue with respect to current and future market sizes, should be identified to guide decision-making.

Apply a ‘digital lens’ to look at your business from a technology perspective, and ask questions to support your business reinvention, such as:

How will your organisation win business in the future?

How will each function contribute to that goal?

How can digital business design be applied to enable the business to strive and survive in an increasingly tech-centric world?

Increasingly, digital maturity and digital dexterity are becoming differentiation factors for delivering competitive advantage. The Covid-19 crisis has generated many use cases that demonstrated the impact difference on those organisations and their supply chain partners that are less digitally ready.

For example, the take up of hyper-automation (the mixture of automation technologies that exist to increase human capabilities by allowing organisations to automate more complex work) and autonomous things (the shift from standalone intelligent things to a swarm of collaborative intelligent things where multiple devices will work together, either independently of people or with human input) have dramatically increased, according to Gartner’s ‘Top ten strategic technology trends 2020’.

The application of business model platforms is also becoming more pervasive for business and technical interaction across multiple customer and user channels and experiences, thus yielding better return of effort.

Managing with clarity to manage ambiguity is the new strategic imperative that business leaders must become adept at in order to increase business resiliency. The new business leader should assume a superhero persona that combines trendspotting, ideation and business transformation roles when innovating and charting a new future direction for their business. Leaders will also have to become accustomed to unlearning old behaviours to be able to navigate through a constellation of unexpected challenges.