COVID-19 and the great reset
Economies are cautiously reopening, around the world. Businesses are keeping one eye firmly on the current situation but also tentatively looking ahead to what’s shaping up as a great reset.
Reimagining the workforce is another critical task. Executives everywhere wondering how to bring people back to the workplace and how they will do their jobs.
Short-Term Efforts Are Focused On Organizational Flexing and Cash-Generation
Most manufacturing companies have reacted remarkably quickly after the potential magnitude of the pandemic became visible and governments have taken strong counter measures. Firms initiated short-term liquidity and structural measures like discretionary spend cuts, temporary, and/or workforce reductions. Similarly, cash management and forecasting have, rightly so, have more focus. But all these measures will be temporary solution but not permanent. Leaders should assume that these short-term measures will be not enough in the long run. Instead, focus should be more on addressing structural and sustainable measures now.
To overcome the recent COVID-19 crisis speedily and respond to the ‘new normal’ of lower revenues in the mid-term, most firms will need to deploy structural performance improvement programs. For these programs, leaders will first have to chart a clear target picture for the firm in three to five years. This should involve the future core business model and operating model, but also define profitability targets and profit and loss goals.
Based on the target, the performance program will deploy levers such as value sourcing, production footprint optimization, and overhead cost reduction, but also top-line levers like introducing new pricing structure. An integrated governance model will guarantee laser-focused delivery of such a holistic program. Using the crisis as a catalyst for change, strong and forward-looking firms should also consider transformation programs to adjust business fundamentals through portfolio optimization, merger and acquisition activities, and re-organization. These transformational activities should be in close sync with the structural performance improvement program and be focused towards the target.
Few tips for Business leaders should be ensuing on heading into Q3 and Q4
All around the world, life is getting back to normal. After months of isolation and tragedy, towns and cities are starting to come alive. Businesses are opening their doors, consumers are starting to make purchases, and employees are getting back to work. The news is filled with hopefulness that predicts a return to life before coronavirus. In the face of all of this optimism, there is a counterargument: Life is not going to go back to the way it was before ever. Even if the virus were completely eradicated tomorrow, too much has changed for us to simply go back to the way things were.
All businesses should prepare themselves to adapt to the new world we are entering, not the old world that we all miss. The sooner we all shift our priorities and embrace the sea-change that has swept across the world these past few months, the sooner firms can revamp and grow their businesses. The world been never been more open to change than today. The post-COVID world offers the most exciting opportunity ever known.
The emotional aftermath of COVID
Businesses are made up of people, and every single person handles this experience differently. Some have been affected directly by the virus, many have dealt with the economic fallouts of lost income, and some even their house. As the worst of the pandemic passes, everyone is going to see two extremes: On one side will be those people who will be very protective of their health/Fitness. They will continue to live as we’ve lived these last few months — in strict self-quarantine, venturing out only when absolute necessary. And there will be who are first in line at their favorite restaurant when it reopens, ready to welcome a return to normalcy. At every level, one will have people on both ends of this spectrum.
Business leaders have the ability to influence their company’s response by the way they act as quarantines lift, but of course, they must take in consideration everyone’s comfort level. Business leaders must walk a thin line between empathy and true leadership. At the end of the day, work needs to get done. Do what you can to make your people feel supported, but be sure to convey the high expectations you maintain for everyone in the firm. This means to be flexible for people’s schedules and continuing to allow the freedom to work from home, while also expecting that all employees bring their best selves to work each day so they can perform their best.
Getting ready for the months ahead
Business leaders need to prepare for best and worst case scenarios, taking all the facts and figures they have and constantly revising and updating their plans. In two months, we might regain some economic normalcy. Or, there could be a backlash, a second wave, and a return to full quarantine or complete isolation. The federal government may approve additional stimulus funding, or they may even cut off any further assistance. Businesses need to know that anything can happen and nothing can be predicted, so they should build a model for both extremes.
When the pandemic first hit, businesses went into safe mode. They cut expenses, cut staff, cut marketing budgets — all in trying to hold on to as much cash as possible which was the defense. Then businesses move into the stabilize stage, when communication (both internal and external) becomes the focus. Frequent meetings help you take stock and align the priorities. Then, when they feel they found some stability, one enters the reset stage. One has doused the fires and only then is they ready to begin moving forward. The reset stage is a crucial time of planning — both revising old strategies and crafting new ones. This is when one strategizes pivots to seize new opportunities. Finally, one moves into offense. You put your plans in action and begin to execute. Be smart, but also be prepared to pivot and move forward, should the chance present itself.
Hiring in the post-COVID era
Increasingly, there are many companies willing to take on remote workers — even if they didn’t have a remote culture before. COVID-19 has taught many industries that remote work is possible, that collaboration and efficiency are not significantly disturbed by physical distance. There will be a glut of workers looking to make a change from one industry to another. When a major crisis shakes up the economy, people start reassessing their career goals and future plans. One will see professionals willing to start at the bottom in a new field, eager to learn.
For employers, now’s a time to really focus on the way you read resumes and the way you evaluate experience of the job seekers. If a person brings the right mentality, the right ethos to a job, if they’re willing to learn, they might be the right hire, even if they don’t have industry experience.
Lasting effects of COVID-19
The most significant and lasting effect of COVID-19 on the world economy, has been the fast-paced adoption of remote work. Jobs, companies, and whole industries have welcomed remote work culture, virtual sales appointments, video demos, webinars, virtual events, and more. People often tend to avoid change until something it is forced on to them to embrace it.
How many companies will fly their workers across the country or around the globe for a meeting in today’s time?
The reality is that business travel will never be the same again. Although in-person collaboration will still play a role in the future workplace, virtual tools offer too many benefits that can’t be ignored. Smart businesses will continue to embrace technology as a means of connection that enhances their humanity as well as the output.
Choosing change over comfort
The COVID-19 crisis has impacted mankind to an extent not seen in generations. Millions have lost their lives. Hundreds of thousands more have lost loved ones, lost jobs, or lost financial security. In the midst of such devastation, it is appropriate to grieve, to feel melancholy, to ask big questions about your life and worldview. But every tragedy brings forth change, as painful as it may be. As the virus raged for these past months, it became more clearly to that change was here to stay.
Step boldly forward into the new world that awaits us. During this pandemic, it’s time for everyone to put their best work to steer through the storm. The need for excellence continues but now is when the real hard work starts.
Focus On the Long-Term Game Plan
Short-term COVID-19 measures like supply chain continuity, liquidity assurance; furlough programs and first cost containment have been implemented. They should be continuously monitored and revaluated where needed.
Company leaders who want to emerge from this major crisis more profitably need to start working on structural performance improvement or even transformational programs now. To avoid that the urgent constantly overrules the important, this requires dedicated teams for the short-term cure and the structural, sustainable solution. This way firms will begin to experience the positive effects more quickly and gain a tactical advantage over their competition.
References:
https://www.impactbnd.com/blog/business-leadership-post-covid
https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business
https://www.oliverwyman.com/our-expertise/insights/2020/apr/managing-costs-in-times-of-covid-19.html
