Business strategies in the 'new normal' - Beyond the Curve

For most companies, building resilience in their strategy is now a priority given the adverse effects faced due to the COVID–19 pandemic. Some companies had a long-term strategy to grow and expand their business before the COVID–19 pandemic outbreak. These strategies may need to be revised and, in some sectors, discarded and start afresh to incorporate the various changes that have happened affecting vendors, customers, human resources, and supply chain. People, systems, processes, and resources that support the delivery of the strategy have been significantly affected – hence the organisational strategy may need to change too. Organisational leaders will need to analyse both past and present trends and forecast future trends on the labour market, supply chain, customer tastes and environmental sustainability. The future scenarios should be mapped to the business to develop a strategy with plans that respond to the future business environment – how will future health and technology changes affect your suppliers and customers, and how does the business position itself to meet these everchanging needs?

There was a great emphasis on business and process efficiency in the past to maintain and increase profits - for some companies the question of sustainable profits was seldom asked, this is now going to be a big focus. There is an increased need to have a right balance between efficiency and resilience for it would not help any business to be efficient and fail to survive in the medium to long term. For example, while it appeared cost-effective and efficient to have a lower cost foreign supplier, questions on the sustainability of the supply in the event of a pandemic were not asked - “what if” questions will now need to be asked more often on any decisions at every level of the organisation.

Building a resilient strategy requires foresight, i.e. the ability to see what is ahead of the Curve. Many companies will employ scenario modelling to predict and simulate what could go wrong in the delivery of the organisational goals. Some of the key areas to be considered as part of building a resilient strategy are as follows:

• What were the drivers of outperformance in your industry sector during the last recession or any other challenging year?
• What will be the next frontier of value in your industry sector?
• What are the external threats facing your industry?
• What new customer needs will you need to address?
• What changes within the global supply chain of your suppliers do you need to consider?
• Can you achieve a competitive advantage through differentiation?
• Are there any technology or business model disruptions in other industries that could have consequences or signal similar disruption in your industry?
• Does your business model need to evolve? Any opportunities for digital transformation?
• What infrastructure changes will you need to support a shift in strategic direction?
• Do you have the right employees to deliver a resilient business strategy?

Evaluating and revising your strategy will enable you to focus on the key enablers, which will give you an advantage in the market. You will need to identify the quick wins which can push your productivity and margins up – focusing on the key clients that support the more significant part of your revenue using the 80/20 rule. Normally, 20% of your total clients bring in 80% of your total revenue. Focusing on these and identifying a value proposition create an advantage over your competitors. After this pandemic, most companies will be asking themselves whether they should continue with their existing suppliers or look for value elsewhere.

Some of the ways to differentiate your business are as follows:

• Develop unique new products or services that may not be popular or needed in the short term but in future.
• Customise products and services to client’s specification.
• Add additional new features to existing products to increase value.
• Revise your pricing model to suit the needs of your priority clients.
• Add additional distribution channels to your products – hybrid model of online sales and on-site sales.
• Invest in customer service excellence.

An agile workforce and systems support organisational agility. A company’s strategy needs to consider the agility of the workforce, systems and processes that will help in delivering the strategy. Below are some critical areas every organisation should focus on to prepare for future disruptions:

Agile workforce – An agile workforce is the most significant enabler to the successful delivery of the strategy in this dynamic world full of uncertainties. Most organisational leaders are concerned that their existing workforce may not be able to keep pace with the speed of technology changes. Agility, in several cases, may start with data analytics, the building of business intelligence and process reengineering, but it eventually ends with the workforce.

Culture of innovation – Embedding a culture of innovation is a sustainable way of maintaining agility in the organisation. Organisations that invest in innovation initiatives and upskilling programs to develop employees increase employee engagement and agility. Many organisations that collapsed during the pandemic traced the primary root cause for their failure was because they were unable to create a culture of innovation in the organisation. Many organisations are beginning to create safe environments for employees to experiment, try and succeed or fail to find better ways of executing tasks.

Agile processes and systems – Processes and systems should be designed in a way that allows flexibility to adapt to the everchanging business environment. Employees should be given the freedom to explore new ways of doing work. New tools within the digital transformation ecosystem should be explored to bring efficiencies in executing work. Customers will welcome innovative ways of serving them, which potentially maintains or reduces the cost of providing the service as well as increasing customer service.

To embrace agility, companies need to know the various tools to unlock agility. Below are some of the tools:

Enterprise data governance - focuses on ensuring enterprise data is available, accurate, and timely to make informed decisions to extract business intelligence in the current period as well as projecting into the future.

Integrated performance management - focuses on shortening the cycle between gaining insight/knowledge and action related to critical success factors and key performance indicators.

Dynamic forecasting - shifts the balance of management’s focus toward a more substantial weighting on the future, including scenario planning. Efficient performance reporting - reinforces alignment by staying focused on the KPIs that matter as well as monitoring their relevance with time.

The strength and resilience of an organisation rests in its employees, systems, and processes. It is essential to regularly undertake a health check of the agility of the employees and the supporting systems and processes to ensure organisation resilience in the long term.