Business leaders are now switching their efforts from lockdown mode to getting back to business. Much has changed since COVID-19 struck, from where employees are located to how they integrate and collaborate. This re-opening requires careful planning and agility to operate successfully in the uncertain times in which we now live.
The pressure is on business leaders to operate simultaneously in three time horizons: navigating the current crisis, planning for recovery, and creating goals that are readily attainable in the new normal. This requires a carefully thought-out strategy based on organizational priorities to quickly capture revenue for a recovery. A rethink will be necessary to cope with four key areas: touchless economy, supply chain resilience, cost control and widespread telecommuting.
Kevin Sneader, Global Managing Partner at McKinsey
In crisis mode, flatter decision-making structures have proved to be faster and more agile than traditional ones, for example. This agility is partly dependent on data insights. “Companies need to create and accelerate their analytics capabilities to provide the basis for answers – and perhaps as important – allow them to ask the right questions,” explains Shubham Singhal, Senior Partner at McKinsey.
Here, enterprises may need to reskill knowledge workers in big data and analytics to get the valuable and predictive business insight they need. This will help them to address changes in customer behaviors and purchasing habits during a forecast post-coronavirus economic downturn and cope with the challenges it throws up. Building on the change in the customer journey
The pandemic has dramatically changed the customer journey. Some will see the need to retire certain activities such as closing bricks and mortar stores and upscale others, such as increasing e-commerce channels. There will be those that have re-invented themselves, for instance, restaurants that have started producing artisan-made deli items for sale online.
“Dexterous resets build organizational resilience. As you weed out the weaknesses in your business and operating models, you are better positioned to weather the next disruption,” explains Chris Howard, Gartner Chief of Research.
Howard recommends that business leaders first audit the company and find out exactly how and where the crisis has impacted existing models to spot where there are both risks and opportunities.
The importance of accelerated digitization
Brands are repositioning themselves and shifting products and services to engage and retain existing customers and pick up new business. If digital wasn’t part of a brand’s make-up before the pandemic, it is a vital part of its sales and marketing strategy now.
Customer behaviors and preferred interactions have changed dramatically since lockdown, for example. On the B2B side, recent customer-behavior research by McKinsey highlighted the fact that digital interaction with B2B customers is now two times more important than traditional channels – leaping 30% since before the coronavirus crisis hit. Business leaders need to benchmark their digital channels against the competition to ensure their performance.
Enterprises leading in digital transformation are significantly less vulnerable to the epidemic, according to IDC. Those leading in resource transformation have also had a better ability for long-distance coordination and higher overall work efficiency. This has been a wake-up call for some. It is little surprise, therefore, that IDC forecasts that spending on digital transformation technologies and services will grow 10.4% this year to $1.3 trillion. It remains one of the few bright spots in a year the analyst firm believes will see significant reductions in overall IT spend. Healthcare and construction are expected to be the least hit sectors in terms of IT spending, while transport and hospitality the most impacted.
Speeding up digital transformation, however, isn’t a case of simply putting a foot on the gas. It demands that business leaders take a step back and carefully assess their roadmaps and look at both the business value and feasibility of change in various areas of the enterprise, according to McKinsey. This will involve analyzing changes in customer behaviors, supplier dynamics, supply chains, governance and regulations.
The shift to homeworking
Business leaders will also need to factor in the trend towards homeworking in their recovery strategy. A recent Gartner survey revealed that 74% of CFOs intend to shift some employees to homeworking permanently.
“Most CFOs recognize that technology and society have evolved to make remote work more viable for a wider variety of positions than ever before,” says Alexander Bant, Practice Vice President, Research for the Gartner Finance Practice. CFOs are keen to make the most of cost benefits related to homeworking, such as reduced office space requirements.
Enterprises will need to rethink their IT infrastructures and operating models alongside digital transformation to boost their business agility through flexible homeworking. Connectivity, security, and effective collaboration, for example, are all areas that will need to be addressed. Workplace transformation will not only require new technologies but also changes in the corporate culture.
In terms of returning to offices, IoT, data analytics, cloud and SD-LAN will be key enablers in reducing touchpoints in the office and enabling social distancing. People flow management and workspace occupancy solutions, for example, will help to keep employees and visitors safe.
The big digital picture
Putting up a virtual “open for business again” sign isn’t enough. Business leaders must rapidly re-assess their digital agendas to meet the new needs of both employees and customers if they are to succeed in the brave, new, touchless economy.
Watch our webinar on How COVID-19 is accelerating the rate of technology adoption.