By Dr Rufaro Mucheka (PhD), Head of Strategy, Nedbank Financial Planning
As the coronavirus has swept across countries, communities and families, lives have effectively been put on hold and the world has ground to a halt in a desperate attempt to avoid catastrophic loss of lives. As a result, the economic toll of Covid-19 is mounting, and businesses are quickly realising that it cannot, and will not, be ‘business as usual’ in the coming 'business unusual' times. Put simply, if businesses are to survive in the so-called 'new normal', strategies will have to change and new ways of doing business need to be crafted.
Those in leadership positions do not have the luxury of time to consider the long-term sustainability of their businesses, as the implications of the pandemic are unknown given the ongoing exponential increase of confirmed cases on a global scale. Leaders are thus being forced to make drastic operational and organisational decisions that will have profound, long-term implications. The decisions that these leaders make today regarding their staff and business strategies will define their new business trajectories, and in some cases their broader industries, for years to come.
At the very least, the ability of any business to not only survive the pandemic, but to come out the other side in a sustainably profitable position, its response to a fast-emerging, highly infectious agent like Covid-19 must include strong collaboration, the use of new technologies, and above all, the agility to stay ahead of the competition. In a country like South Africa, where a five-stage, risk-adjusted strategy is being used as a framework to gradually open up the economy, such agility and technology will need to be the cornerstones for any business to remain operational and viable. Not only that, these vital enablers will form the foundation of most business operations in the post-Covid world, as social distancing and remote working and client engagement arrangements continue to be the norm.
The challenge, of course, is that when companies typically pilot new digital initiatives, they are able to test one dimension at a time. In the current crisis response mode, few businesses have this luxury. Lockdown effectively threw all South African businesses into the same remote-work deep end, and the result has been significant pressure on systems, technologies and most of all, people. But while working from home can complicate the provision of services to clients, for businesses that want to maintain and increase their reach, ensuring they have the capacity and infrastructure to digitally connect and meaningfully engage with their clients is vital. Strategists therefore urgently need to recraft their companies’ digital strategies and rebalance their product road maps.
These business strategies should be based on scenarios that detail anticipated customer behaviour shifts, business model opportunities and implications for digital and technology choices. These can help determine where potential sources of value, such as data, ecosystem collaborations and platforms, can be found. In line with these strategies, business models must be developed to capture that full value. Given the likely changes to the way the world works going forward, these models will need to address the following at the very least:
- Effectively engaging with and serving customers in a manner that safeguards their health.
- Digitising interactions to make it easy to do business outside the traditional world of ‘brick and mortar’.
- Transitioning customers from offline to online channels.
- Automating back-office tasks that support staff working from home.
In the current environment, it is critically important to have a clear view of your customers’ changing habits and behaviours, as well as to understand the implications of these for your business. Customer perspectives and preferences should be at the heart of your emerging business strategy; it is not about how business used to be done, but about how your customer, who is in lockdown and has started exploring technology, wants to be engaged. The best strategy is one that listens to the voice of your customer and ensures that they are at the heart of all your decisions.
Ultimately, those who wish to come out the other side of Covid-19 as victors need to have an exponential mindset, and must create digital business models that generate accelerated returns and exponential value. Such an exponential mindset is predicated on generating alignment, consistency and empowerment. The primary challenge, however, is to unlearn one’s linear way of thinking and embrace the unfamiliar in order to create opportunities for real innovation.
The disruption brought about by Covid-19 has illuminated the crucial role that leadership and technology play, both in supporting remote workers and in scaling a business to meet the demand for the surge in digital customers, which was always coming, but has now been accelerated. And strategies are urgently needed to address the associated risks, while capitalising on the numerous opportunities, this new normal future presents.
Those companies that have delayed, or continue to delay, enacting such digital strategies should not be surprised if they find themselves unable to compete, or possibly even to keep their doors open, once the major impacts of Covid-19 have passed.