In 2019, every industry was visioning to winning the 2020s, in basis of how competitive advantage was changing. The combination of technology advancement, and declining long-term growth rates and the rise of new learning technologies are for companies to compete on their rate of learning. But after COVID-19, it has made organizations conscious of the limits of their ability to learn fast in an extremely fast-moving environment. Today, 10 days of hesitation can lead to the multiplying of infections, and to a growth of business and societal disruption.
The pandemic has also brought a huge transitional challenge on world: the need to move from an unstable economy, to a path towards growth and prosperity. This journey involves three stages –fight, flatten and future. Organizations in many sectors will have to survive in a ruthless short term period in order to access long-term options. But while survival becomes priority of mind today, thriving in the future looks the long game. And this requires world business leaders as well as governments to respond to a new living environment, a new customer with health safety, and heightened societal expectations.
Five essentials for world leaders to leading in the new reality where addressing these vast short and medium-term priorities, we see five leadership necessities.
Sustainably Flatten the Curve
The only ways we have to slow the epidemic are quarantine and social distancing. These measures are sufficient to freezing the real economy and for which there are few historical instances. Until the world has medicines to effectively treat the virus or a vaccine to prevent it, companies and nations must seek to break the compromise by not only flattening the curve but also having sustainably for both lives and livelihoods.
Meanwhile, the world needs new approaches: testing in large-scale which include both infection and immunity; innovative models for risk stratification; new practices for rapid tracking, tracing and enforcement; and new strategies for where, when and how to open communities and the economy – and for when and how to react if infections reappear.
Get Back with the New Customer
As soon as the disease is taken under control, industries will need to start the journey to gain the new customer in the post-crisis world. The complex aspect of this situation will be distinguishing between crisis driven short-term changes and more permanent shifts, with companies spinning from a crisis management mind-set to a more creative and imaginative one.
With this backdrop, two trends are already clear. The first one is a massive acceleration of the shift to digital platforms and channels. The second is the biggest challenge for many parts of the economy to restore consumer trust.
Accelerate Digital Transformation
Before the pandemic, many businesses were following digital transformation programmes. But what was an optional, self-paced transformation has become a priority. The digital transformations need to be inclusive, focussed on value creation, and not mainly technology driven. Most of all, to compete dynamically on the rate of learning, companies will need to be reconceived to combine human ingenuity with machine learning. Also, companies must concentration on the human side of digital transformation as much as the technological side, including by incorporating new ways of working.
Before the crisis, businesses were pursuing digital transformation. But what was an optional, self-paced transformation has become an urgent priority. Businesses and consumers have an opportunity to try out and get used to digital shopping, collaboration, and working all at once. And the greater economics of digital channels will speed up the penetration of digital business models.
Create advantage through resilience
Companies have spent years to building effective, extended global supply chains that located production activities with low-cost locations and connected them with digital logistics. Their effectiveness has been measured in terms of cost efficiency, speed, and profitability. But the virus has shown that systems built mainly to maximize efficiency but tend to be breakable under stress, and many companies are now planning to restructure their supply chains in a more decentralized and resilient manner.
In addition to supply chain resilience, balance sheet adaptability is of heightened importance. This requires cost reduction, focus on cash, and government support as well.
Combine Common Interest
Before the crisis, many CEOs were engaging deeply in multi-stakeholder capitalism, corporate purpose, and sustainability in response to environment protection and other collective concerns. This agenda will definitely become more crucial and specific as a result of COVID-19.
As people and small businesses bear enormous hardship while governments also support major enterprises with unprecedented support, the world should expect intense inspection of the social relevance and contributions of corporations. It is also attention-grabbing, how companies act and interconnect in this extraordinary period and it will likely be remembered for many upcoming years.
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