Author: Sethu Janardhanan
The novel coronavirus has affected human life so fundamentally that future historians may well study the Before COVID-19 (BC) and After COVID-19 (AC) eras. Many of these changes aren’t just about safety, they’re also about convenience. There’s almost certainly no going back to ‘the way things were.’ As a CXO, here are the critical dynamics facing your company:
Buyer behavior has changed drastically. Adapt quickly or fade.
Companies that are slow to adapt to changed buyer behavior will perish. For example, people are ordering in rather than eating out. if your company operates a restaurant or chain without home delivery service, partner with a last-mile delivery provider, set up your own delivery team, or lose customers.
Changing buyer behavior is also creating opportunities. Quick Service Restaurants that improved their app experience to make ordering easier, simplified curb-side pick-up, and added deals on family meals have benefited most from altered demand and consumption dynamics.
New business models are arising out of the pandemic. Internet-based wellness services are thriving like never before. The scope of telemedicine has exploded with everything from consultations to check-ups to diagnosis, prescription, and medicine purchases happening seamlessly online.
Pre- and post-pandemic supply chains will differ significantly.
Pandemic shock is permeating the whole supply chain. Suppliers and sellers struggle with the same challenges: geopolitical uncertainty; public health regulations; freight availability; production and transportation constraints; rising costs; and material scarcity.
Companies are altering their product mixes in response to changing buyer preferences. To continue the Quick Service Restaurant example, family meals are outselling individual meals as consumers order online more than they dine in. In response, inventory mixes and restocking orders have altered. Restaurants must find ways to maintain their service quality. Suppliers must accommodate ever-changing order quantities and lead times. Coordination amongst the supply chain participants must be significantly improved just to maintain the same level of quality.
A lean, cost-minimized, Just-In-Time supply chain may have to be jettisoned for one that’s resilient: adaptable, flexible, agile and above all, reliable.
Digital technology and Artificial Intelligence are now operational imperatives.
Embracing digital technology is the only way for companies to weather the challenges of remote work, employee and customer safety, cost management, and operational efficiency.
The Industrial Internet of Things has been employed in heavy industry for years. Digital Twins already provide remote diagnostics and maintenance for large industrial equipment. Both can be extended to products and services of all kinds. AI enables effective planning for extreme scenarios, an essential part of any company’s arsenal amidst so much uncertainty.
Having reliable, up-to-date and easily accessible data and a digital mindset are essential to keep ahead of pandemic-driven externalities that change at a dazzling pace. Post-pandemic, companies will have to race just to keep their position.
Leaving digital transformation to the Information Technology organization will no longer suffice. The IT and Business Intelligence or Analytics leaders must be closely aligned. Your company needs to be a digital native with technology and trustworthy data at its heart.
Managing your money will be tougher. Much tougher.
Companies of all sizes are struggling for survival amid plummeting earnings. Governmental support schemes have rigorous qualifying criteria. Fund availability is limited. Disbursements are delayed. Private lenders are increasingly risk-averse as the pandemic drags on with no end in sight. Sources of rolling credit are drying up.
Concerned about companies’ inability to service existing debt, many countries have temporarily halted repayments and penalties. This may afford some relief to stressed businesses, but there’s a self-defeating side-effect: with credit risk assessments frozen at pre-pandemic levels, banks and other financial institutions can’t assess their current exposure. To protect themselves, they have suspended lending.
Post-pandemic, there will be a fundamental shift in the way markets and lenders view corporate debt and leverage. Risk tolerances will remain low. The majority of companies with high valuations on paper with nonetheless be scrutinized on self-sufficiency in working capital and cash reserves, making capital management even more challenging than before.
Your company’s culture and employees need a fresh approach.
Remote work has brought your company savings and improved productivity, but not without a cost. The line between personal and professional has all but disappeared in nearly every industry. Employees are burning out in ever-larger numbers as they work longer hours. Disengagement is more frequent. The company culture is diluted.
Studies show that prolonged physical isolation adversely affects people’s ability to form relationships, collaborate, and empathize – all behaviors critical to your company’s success in this knowledge-based, fast-moving, Internet-driven world.
You and your people leadership team have the unenviable challenge of uniting your dispersed workforce; making new hires feel welcome; meeting employees’ expectations for career growth, learning, rewards, and recognitions; and in general, transforming your corporate culture for the new age of remote work.
These are formidable challenges, to be sure, but COVID-19 has created the perfect opportunity to experiment with new business ideas; explore new revenue streams; develop new business models; and transform the way your company operates and engages with its customers, suppliers, employees, and stakeholders.
Companies that think through these transformational dynamics and pursue a clear path through the pandemic will gain a head start on their competition. The novel coronavirus has accelerated the pace of change. Does your company have the agility, creativity, technological tools, and motivation to stay ahead of the curve?Tags: Adapting to COVID-19 Coronavirus COVID-19