These are challenging times. Businesses need to be prepared for the long haul given the uncertainties around and its socioeconomic impacts.
These are also the times to spot and leverage opportunities.
What that Next to Normal will be or when that will be is completely uncertain. But this could well be the period that determines the winners and the laggards: those who identified and bet on the right opportunities and those who continued on the same trajectory.
The bold risk-takers could achieve significant gains that may not have happened otherwise or could have taken significantly more time and effort.
As a recent report by the global consulting firm, Bain & Co., says, this is the time to leapfrog competitors by creating more resilient operations; deeper, digital customer relationships; and a refined set of strategic priorities tuned for a new world.
The global economic forecasts are getting darker each day. It could take years for the world economy to get back to the growth trajectory pre-Covid 19 periods.
Recent reports suggest that the global economy is expected to decline by 4% this year. This is about $3.4 trillion, which is roughly the size of combined economies of Brazil and Russia being erased.
A more recent global GDP forecast poll conducted by Reuters in July says that the world could contract by 6.5% in 2020. That’s like adding an economy the size of Italy to Brazil and Russia.
Recent data released has shown that the US economy declined by about 39% in the April to June quarter compared to the previous year and about 10% sequentially over the previous quarter. EU economies had similar declines. The International Monetary Fund (IMF), reported in June that the Indian economy is forecast to shrink by 4.5% in FY 21.
In this backdrop of gloom, some businesses have continued to perform well. Roughly speaking technology and connectivity based businesses have had a boost.
Recent results published by US tech giants show that Apple, Amazon, Alphabet, and Facebook earned a combined profit of $28 billion in the second quarter, a steep annual growth. Apple, for example, announced a 12% annual growth in profits, fuelled particularly by App Store.
Some of the recent Indian corporate results have been encouraging, notably in the telecom, and digital space. Business leaders in India, China, and Latin America are relatively more positive about the near term economic situation as revealed in a recent survey published by McKinsey & Co.
Arguably some businesses benefited from opportunities offered by the pandemics. So be it. It also is a choice of spotting the opportunities and responding early.
What are the leading priorities in these turbulent, uncertain times? Here are three that I would consider figures among the top.
Uncertainty makes it imperative for businesses to create, on a best effort basis, future business scenarios and make some sense of it.
The situation demands farsightedness.
The stakes are high. Decisions made now will have ramifications for years.
All have to build up resilience to defend against emerging gloomy megatrends, like the closure of businesses, and resultant insolvency. At the other end of the spectrum, they must aggressively pursue new prospects created by positive trends like digitalization and mobile connectivity.
Many leaders though may seek refuge in the more defensive and predictable strategic measures, emphasizing on the present at the expense of the future.
There is hardly a way to learn from experience here. This pandemic is practically unprecedented. The only way to tread at this time is to rely on strategic foresight and Sensemaking to imagine multiple scenarios and respond early.
This isn’t a one time exercise, but iterative based on rapid learning.
The closer the scenarios one envisages are to the actual Next Normal, the chances of emerging as a winner could be higher.
More is much better than less. Communication with the people and all stakeholders: investors, customers, suppliers, regulatory agencies, communities, and others.
Uncertain times, unfamiliar environment throw people off balance. Work from home gives now. And many have difficult personal situations to deal with. Yet people come together as teams across locations, and most have adopted reasonably quickly to new ways of working.
In this remote working scenario, transparent and frequent communication from the leadership provides all with updated information, creates an environment of assurance, and helps build trust. We will revisit the critical importance of trust a little later.
Further, lessons learned from previous crisis situations such as the 2008 financial crisis or 9/11 has demonstrated the power of communication
People are the key to resilience and growth.
However, the brutal reality is that the world has seen a large number of forced attrition. This is a painful experience for the companies and more so with those who bear the consequences. Lives get impacted beyond imagination; it is heart-wrenching indeed.
The top leadership needs to demonstrate empathy and make a bold choice of prioritizing people.
During this crisis, many have demonstrated commitment by minimizing layoffs, instead opting for furlough and executive pay reduction, securing government paycheck protection funds, and arranging other aid for employees.
Strange it may sound, but this is also the right time to acquire talent, though selectively.
The opportunities that the future offers often need a different set of talents. Industry boundaries have blurred, technology is a unifier.
Talent could come from adjacent industries, complementary businesses, and from completely unrelated areas. Due to the unfortunate situation of unemployment around us, getting the right talent may have been slightly easier now. It is imperative for bold leaders to spot the right talent and simply grab it.
Frequent communication, people-oriented initiatives, building resilience, and making bold moves based on anticipated scenarios are all enablers to build trust amongst people.
Research says trust has three principal drivers: authenticity, logic, and empathy: people tend to trust when they believe they are interacting with the real you (authenticity), when they have faith in your judgment (logic), and when they feel that you care about them (empathy).
What and when the Next Normal will be? That remains uncertain and unknown today.
But one thing seems certain: Recovery and Return to the Workplace will be far from switching on the lights, deep cleaning offices, handing over masks, and maintaining social distancing.
It is the Trust that people place on the leadership that is paramount.
Contributed by: Jaideep Ghosh, COO
This is intended for general information purposes only. The views and opinions expressed in this article are those of the author/authors and does not necessarily reflect the views of the firm.
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