Covid support measures are coming to an end, so it’s time to prepare for the future. We suggest that to come back stronger, companies should reimagine their business model. The moment is not to be lost: those who step up their game will be better off and far more ready to confront the future.
There are four strategic areas to focus on:
- Recovering revenue
- Rebuilding operations
- Accelerating the adoption of digital solutions
Rapidly recover revenue.
Speed matters: it will not be enough for companies to recover revenues gradually. They will need to rethink themselves for the long term and to get ahead of the competition. To do this companies must SHAPE up.
Start-up mindset. This favours action over research and testing over-analysis. Establish a brisk cadence to encourage agility and accountability: daily team check-ins, etc.
Human at the core. Companies will need to rethink their operating model based on how their people work best.
Acceleration of digital, tech, and analytics. It’s already a cliché: the COVID-19 crisis has accelerated the shift to digital. But the best companies are going further, by enhancing their digital channels.
Purpose-driven customer playbook. Companies need to develop new use cases and tailored experiences.
Ecosystems and adaptability. Changing the ecosystem and changing collaborations with partners up and down the supply chain.
Identify and prioritize revenue opportunities. What’s important is to identify the primary sources of revenue and, focus on them before the recovery fully starts.
This may include:
- launching targeted campaigns to win back loyal customers;
- developing customer experiences focused on increased health and safety
- adjusting pricing and promotions based on new data;
- reallocating spending to proven growth sources
- reskilling the sales force to support remote selling; creating flexible payment terms
- digitizing sales channels and automating processes to free up sales representatives to sell more.
Act with urgency. During the crisis, businesses have worked faster and better than they dreamed possible. Maintaining that sense of possibility will be an enduring source of competitive advantage.
Develop an agile operating model. In this sense, “agile” means putting in place a new operating model built around the customer and supported by the right processes.
The coronavirus pandemic has exposed points of fragility in supply chains and service networks. At the same time, it has been striking how fast many companies have adopted. Now leaders are asking themselves: How can we sustain this performance? As operations leaders seek to reinvent the way they work, five themes are emerging.
Building operations resilience. Successful companies will redesign their operations and supply chains to protect against a wider and more acute range of potential shocks.
Accelerating end-to-end value-chain digitization. In short, low-cost, high-flexibility operations are not only possible they are happening. Most companies were already digitizing their operations before the coronavirus hit. If they accelerate these efforts now, they will likely see significant benefits.
Rapidly increasing capital- and operating-expense transparency. To survive and thrive amid the economic fallout, companies can revamp their approach to spending. A full suite of technology-enabled methodologies is accelerating cost transparency. These digital approaches include procurement-spend analysis and clean-sheeting, end-to-end inventory rebalancing, and capital-spend diagnostics and portfolio rationalization.
Embracing the future of work. The future of work, defined by the use of more automation and technology, was always coming. COVID-19 has hastened the pace. This shift will call for substantial investment in workforce engagement and training in new skills.
Reimagining sustainable operations competitive advantage. Successful companies will reinvent the role of operations in their enterprises, creating new value through far greater responsiveness to their end customers.
Taking action. To keep up during COVID-19, companies have moved fast. To build on this progress, speed will continue to be of the essence. Companies that are willing to set new standards, will build a long-term strategic advantage.
Accelerate digital adoption to enable reimagination.
Over the past few months, there has been a transformation in the way we interact with everyone. These changes have accelerated the migration to digital technologies across every sector. Through the COVID-19 recovery, too, digital will play a defining role.
During the early recovery period, businesses will face some fundamental challenges. One is that consumer behaviour and demand patterns have changed significantly. Early signals of increased consumer demand will likely come suddenly and in clusters. Analyzing these demand signals in real-time will be essential for companies to recover.
To address these challenges, leaders will need to set an ambitious digital agenda and deliver it quickly. There are four elements to this agenda:
Refocus digital efforts to reflect changing customer expectations. To adapt, companies need to quickly rethink customer journeys and accelerate the development of digital solutions.
Use data, the Internet of Things, and AI to better manage operations. In parallel, companies need to incorporate new data and create new models to enable real-time decision making. This will involve rapidly validating models, creating new data sets, and enhancing modelling techniques. Getting this right will enable companies to successfully navigate demand forecasting, asset management, and coping with massive new volumes.
Accelerate tech modernization. Companies will also need to greatly improve their IT productivity to lower their cost base and fund rapid, flexible digital solution development.
First, this requires quickly reducing IT costs and making them variable wherever possible to match demand. This means figuring out what costs are flexible in the near-to-medium term.
Second, this involves defining a future IT-product platform, establishing the skills and roles needed to sustain it, mapping these skills onto the new organization model, and developing leaders who can train people to fill the new or adapted roles.
Third, the adoption of cloud and automation technologies will need to be speeded up, including bringing cloud operations on-premise and decommissioning legacy infrastructure.
Increase the speed and productivity of digital solutions. To deal with the crisis and its aftermath, companies not only need to develop digital solutions quickly but also to adapt their organizations to new operating models and deliver these solutions to customers and employees at scale. Solving this “last mile” challenge requires integrating businesses processes, incorporating data-driven decision making, and implementing change management.