A New Start: Making The Most Of Opportunities & Reducing Risk After The Coronavirus Lockdown
Why businesses should think of the coronavirus lockdown as an opportunity, not an obstacle
The coronavirus pandemic is possibly the greatest Black Swan event of our lifetime. It has transformed both daily lives and the economy overnight, and inflicted a lot of misery and uncertainty for many businesses; and especially the B2C (business to customer) sector.
But there are reasons for optimism. Some analysts, including at the Bank of England, are expecting the economy to bounce back in a rapid ‘V’ shaped recovery. Vaccination efforts from independent labs over the world are showing remarkable progress. And as we learn more about the virus, it is slowly becoming less frightening and manageable.
Crucially, the lockdown has also provided a once in a lifetime opportunity for businesses to self-reflect on current practices and processes, and to change them if necessary, at a point when resistance to change is at its lowest. This opportunity is too good for most sensible businesses to miss, and indeed if managed and planned appropriately, the foundations can be placed for great returns at some later date.
But the same forces behind what created this window of opportunity are also what makes it a precarious moment in the existence of many businesses. Most will have their focus on getting back to where they were, pre-lockdown, as soon as possible. Many will try to do this in ambitious timescales — or without any real planning — and therefore open themselves up to unbounded risks. Though these can be managed with the right approach.
The importance of transforming, not transitioning
It is common to hear the news media refer to a transitional period between ending the lockdown and getting back to “normal”. But smart businesses looking to exploit the opportunities provided by the pandemic should be looking to transform their operations — to get to the “new normal” — and not just transition them potentially back to some status quo that is outdated or will become outdated in the near future.
As the lockdown restrictions begin to soften, businesses will shift focus from a ‘crisis response’ phase to a ‘business recovery’ phase. Immediately, the temptation will be to make up for lost time and to immediately resume core organisational duties. So there is no better time to use the current economic pause for some within and without self-reflection. This includes, but is not limited to, the reoccupation of work facilities, the readjustment of supply chains and other long-term restructuring to an organisation’s image; brand, and even the business’s place in the contemporary working and political climate.
Companies can do this by challenging and changing product and service offerings, current business strategies and practices, along with how they market, advertise and shape customer experience — and perhaps even how they change their core organisational behaviours.
For example, a business might use the lockdown “pause” to focus on a shift towards greater environmental sustainability.
It has been said that the SARS outbreak of 2002—4 was a dress rehearsal for the COVID-19 pandemic. In the same way, it has also been said that COVID-19 is a dress rehearsal for the coming impacts of climate change — which will obviously incur massive and probably permanent changes to the global ecosystem and economy.
So addressing climate change could indeed be a life-or-death issue for many businesses and the wider world. The risks related to climate change also come with massive opportunities to change to a green agenda and to profit from it.
In today’s hyper-connected, social media-fuelled world, business leaders are also more aware than ever of how important it is to stay relevant and even ‘morally good’ in the eyes of consumers.
Indeed, the research shows the ethical consumerism has reached an all time high. Meaning that customers are much more conscious of what it is they are purchasing, and protest with their wallets if they have suspicions their investments could be harming the planet.
The mission to go green might be innately more difficult for some businesses, but not impossible. For example, in October 2019 the fossil fuel giant Royal Dutch Shell attempted to win over some of their more eco-conscious consumers by offering an option to off-set their diesel and petrol purchases — to help with things such as forest and wildlife preservation.
A year before that, Iceland Foods caused a storm of controversy in their favour. By creating a political campaign about banishing palm oil from its products and masquerading it as a Christmas advert. The advert was banned from television but as per the Streisand effect this only made more people want to watch it.
Some industries have been severely impacted by the lockdown and may need a green agenda to survive.
For example, it could provide a crucial opportunity for the aviation industry to salvage its dwindling reputation by investing in greener engines and even electric-powered aircraft. Before the coronavirus grounded almost all tourism-based flights, climate activists such as Greta Thunburg and the Extinction Rebellion were already making their disdain for kerosene-guzzling aeroplanes loud and clear. The aviation industry has a guaranteed audience in that there will always be people willing and wanting to travel by plane. So why not use this downtime to streamline more and greater research into cleaner, greener technologies for the future?
It goes without saying that environmentally-friendly practices such as these, along with others (such as a reduced dependency on plastic, or the elimination of an unsustainable product or practice), will also help to open up new sections of the market that were previously unreachable.
At a government level, this is an opportunity to accelerate green infrastructure programmes such as electric car charging stations and replacing gas boilers with hydrogen power — to name just two. And the jobs created will also be welcome in such a time of economic and employment turmoil.
Resilience in supply-chains
Sustainability is a big issue, but not the only one. ‘Resilience’ is the new big topic at board-level. A review of supply chains is required, and especially in areas with strong industrial footprints where there is expected to be post-virus disruption (such as South Korea, Italy, and of course China). And even a review of company internal planning processes to maximise the use of inventory to prevent shortfalls in supply.
For many enterprises, it is also time to consider the location risk of clustering suppliers all into one region. A reassessment of location risk will not only be a necessary precaution against a second wave or reemergence of COVID-19, it will be increasingly important in a century that will likely be defined by climate change and other political disruptions.
Early visibility is a great benefit for companies looking to manage future supply disruptions, and investing in so-called ‘smart’ supply chains will provide a significant competitive advantage over companies that do not. Smart chains are supported by technologies such as artificial intelligence, 3D printing, 5G, and enhanced data analytics. They offer a much improved connectivity and visibility over the end-to-end chain, and can provide early warnings and instant feedback as a disruption approaches. In other words, then can help you to identify a risk before it morphs into an issue or a crisis.
A contentious subject is that of automation. Many British businesses are exploring the automation route, and the social distancing and infection anxieties of the coronavirus will only accelerate the process. McDonald’s is even trialling robot cooks and servers. The upside seems obvious, potential returns on efficiency and fewer wages to pay. But there is also the downside of having less human capital to draw on, and the potential negative coverage that automation has at the best of times, nevermind in a time of such high unemployment.
These are just a few examples. There will be many more lucrative and highly beneficial opportunities to take from the lockdown. However, given there has been no comparable aftermath to a pandemic of this scale, at least not in living memory, most businesses will lack a clear roadmap to reach them. And if they do not plan accordingly, there is the danger of overreach, or overambition, or just plain bad decision-making, which could be ruinous to a businesses projects if not executed properly.
It is crucial, therefore, that businesses put plans in place that are appropriate to help them reach their new ambitions. They cannot haphazardly move forward as they struggle to reinvent themselves, and shouldn’t. Nor should they set unrealistic goals. Setting unreachable goals will not only shatter morale, but faith in the business itself and (if applicable) a business’s share prices and other financial assets.
Planning your way out of the pandemic to the new normal
To make sure that unnecessary risks are avoided and significant opportunities are taken, robust plans will be required. These will need to be at both strategic and operational levels.
At the strategic level a clear and agreed statement of the new strategy will need to be formed, communicated and agreed upon — and then broken down into its constituent assumptions (i.e. “What are the key things that need to happen in order to achieve the new strategy?”). The assumptions then need to be assessed for risks in a strategic assumption analysis. Different strategic options can be assessed in this way so that the best options are selected to implement at an operational level.
At the operational level, concise change-projects will need to be defined that implement the strategy and define the schedule to achieve the new objectives. In a similar way to the strategic assumption analysis, the key assumptions will need to be captured and assessed for risk. However, it will also be appropriate to undertake a schedule risk assessment to ensure that the timescales are doable. A Strategic Target Analysis will provide a percentage chance of meeting the target milestone dates with a “roadmap” of assumptions that need to be managed in order to get from where you are predicted to be to where you want to be (e.g. from a low % confidence of achieving the end date to a high % confidence).
“A pessimist sees the difficulty in every opportunity. An optimist sees the opportunity in every difficulty” — Winston Churchill.
Never has this been more true. Organisations (and governments) that fail to evaluate the current global situation appropriately will blindly struggle to get back to “normal”. Then they will probably fail through a lack of planning or an inability to see the risks and opportunities in their plans. This will result in either taking much longer than expected to get back to normal; spending a lot of unnecessary money getting there, or compromising objectives just to achieve something.
But when they get back to “normal” they may find that that is not where they want to be anyway. Either the world has changed so much that the products or services are no longer so desirable or necessary, or they have missed the opportunity to exploit the change to serve the “new normal”.
Organisations must re-evaluate their strategies in light of the coronavirus and exit from the lockdown. This must flow-down to robust operational/project plans that must then be rigorously evaluated for risk and opportunity.
In this way, we can all navigate to the “new normal” quicker and safer.