Covid Means Business, But Businesses have other Ideas
The COVID-19 global pandemic thrust a sudden, new way of life upon the world, and we have been scrambling for practical ways to adapt ever since. Countries and states have been forced to shut down their borders, bringing daily life to a standstill, in a meek effort to flatten the curve.
The closure of non-essential businesses, has limited and, in some cases, eradicated the livelihoods of many business owners, most of whom are now struggling to even survive.
Digital to the Rescue!
Recent studies show that businesses across the world are adopting a digital approach to do their business at a much faster pace than before. Most businesses have pivoted to models that ensure survival in the short term and ensures growth and resilience in the long term. This change is quite evident in almost every sector. To help deal with the crisis and its aftermath, most companies were quick to develop digital solutions and also to adapt their organizations to new operating models and deliver these solutions to customers and employees at scale. Solving this “last mile” challenge required integrating business processes, incorporating data-driven decision making, and implementing change management. Banks, which were once notorious for their insistence on paper-based systems, now have remote sales and customer services and have digitized most of their services. Grocery stores have shifted to online ordering, payment, and delivery as their primary business. Schools in most parts of the world have adapted to a 100 percent online teaching model and digital classrooms. Hospitals are now exploring the potential of telemedicine and remote diagnostics.
However, across sectors, the results suggest that rates for developing digital products during the pandemic differ. Taking into account the time frames for making manufacturing changes, the differences are more visible between sectors with and without physical products than between B2B and B2C companies. For example, consumer packaged goods (CPG) and automotive and assembly report relatively low levels of change in their digital-product portfolios. The customer-facing elements of organizational operating models are not the only ones that have been affected. There has been similar accelerations in the digitization of their core internal operations (such as back-office, production, and R&D processes) and of interactions in their supply chains. Unlike customer-facing changes, the rate of adoption is consistent across regions.
Yet the speed with which companies have responded to a range of COVID-19-related changes is, remarkably, even greater than their digitization across the business.
Innovation helps Food Services and Hospitality Stay Afloat!
The pandemic brought the world of restaurants to its knees. Many restaurant owners were faced with bleak prospects, having to close their businesses for good. But some of them have embraced the challenge and have overcome the pandemic induced hurdle through some good old fashion, salt of the earth innovation. Simple changes in operations like focusing on the take-out business and converting parking spaces into makeshift drive-throughs have helped many restaurants survive and even thrive in the new normal. They have tweaked their menus based on their existing inventory and have introduced items that are delivery-friendly. This has opened up new revenue channels, which are viable even after things go back to normal.
Companies in the tourism and travel industry, which were hit hard, have responded by being nimble and agile.
Consider Airbnb, an online marketplace for lodging, primarily home-stays for vacation rentals, and tourism activities, based out of San Francisco. Faced by the sudden collapse in travel, Airbnb moved swiftly to help hosts financially and connect them with potential guests. Although the company was buoyed by the $1 billion lifeline it received from private equity firm Silver Lake, they slashed its marketing costs and reduced the salaries of its top executives by half. They went to great lengths to assess what their customers were feeling and to address their emotions. This resulted in the making of policies that allowed last-minute cancellations and full refunds. Apart from that, the company decided to shift focus to ancillary offerings. As the pandemic deepened, people were looking more at local stays — and this played to the advantage of Airbnb.
Being Robust helps Retail Recover
The pandemic has also caused large companies to pivot. With consumers focused on safety, access, and experience, brand loyalty became less of a factor. As demand for essential items and hygiene products increased, companies like Unilever and Procter and Gamble prioritized its packaged food, surface cleaners, and personal hygiene products over other products. Robust supply chains were instrumental in helping them meet customer demand. There’s no saying which of these changes are going to be permanent, thus causing a fluctuating repositioning. Apart from this, the companies can no longer rely on brand loyalty.
Because consumers are now more interested in safety, experience, and comfort as a result of the pandemic.
What’s important is to identify the primary sources of revenue and, on that basis, make the “now or never” moves that need to happen 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.
Once identified, these measures need to be rigorously prioritized to reflect their impact on earnings and the company’s ability to execute quickly.
The economic crisis triggered by the pandemic has resulted in a new normal, so companies who want to succeed in the digital-led recovery must quickly reset their digital agendas to meet new customer needs, shore up their decision-support systems, and tune their organizational models. Because business as usual will not be nearly enough: the game has changed too much. But by reimagining how they recover, operate, organize, and use technology, even as they return to work, companies can set the foundations for enduring success.
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