What does it take to reimagine a business and bring it back successfully in this next normal? McKinsey & Company has taken a look at what corporate business leaders are thinking during the global Covid19 crisis and what are the key areas where companies should focus on post the crisis.
Well, it’s important to understand this is not just about returning a business to what it was. It’s about reimagining what it should be given the changes that this current pandemic has created.
In order to come back stronger, companies should reimagine their business model as they return to full speed. The moment is not to be lost: those who step up their game will be better off and far more ready to confront the challenges—and opportunities—of the next normal than those who do not.
As per McKinsey, there are four areas to focus on: recovering revenue, rebuilding operations, rethinking the organization, and accelerating the adoption of digital solutions.
1. Recovering Revenue
The first is to rapidly focus on revenue recovery. It means understanding your customers, looking hard at how they’ve been impacted, segmenting the customer base, and then focusing in on the segments where you have something to offer that is distinctive because that’s going to be especially required in this next normal.
Companies will need to SHAPE up their revenue game in order to recover from this crisis. They need to Start-up their mindset by establishing a brisk cadence to encourage accountability and agility.
Keep Human at the core and redesign their operating model based on how their people work best.
Accelerate digital and tech analytics by shifting towards a digital world and strengthening their links to customers.
Build Purpose-driven customer playbook. Companies need to understand what customers will value, post-COVID-19, and develop new use cases and tailored experiences based on those insights.
Ecosystems and adaptability is essential for companies for considering non-traditional collaborations with partners up and down the supply chain.
Rapid revenue response is the next normal for how organizations will have to operate.
2. Rebuilding Operations
Secondly, rebuild operations. Successful companies will redesign their operations and supply chains to protect against a wider and more acute range of potential shocks. The reinvention and regionalization of global value chains is likely to accelerate adoption of other levers to strengthen operational resilience, including increased use of external suppliers to supplement internal operations, greater workforce cross-training, and dual or even triple sourcing.
According to McKinsey, following trends will redesign operations in companies:
- Accelerating end-to-end value-chain digitization.
- Rapidly increasing capital- and operating-expense transparency.
- Embracing the future of work.
- Reimagining a sustainable operations competitive advantage.
- Taking action.
3. Rethinking the organization
Thirdly, the organization. The heat of COVID-19 crisis has forced organizations to work in new ways. Much of this progress comes from shifts in operating models. Clear goals, focused teams, and rapid decision making has replaced corporate bureaucracy. Now, as the world begins to move into the post-COVID-19 era, leaders must commit to not going back. The way in which they rethink their organizations will go a long way in determining their long-term competitive advantage.
Organizations must decide who they are, how to work, and how to grow.
In times of crisis, what matters becomes very clear and fast. Roles, ownership, orientation and leadership become much more supportive and demanding in this crisis situation. The social contract between the employee and employer is changing fundamentally. Leaders and employees are sharing a sense of purpose and a common performance culture; they know what the company stands for, beyond shareholder value, and how to get things done right.
When it comes to how organizations should work and what responsibilities leaders should take to boost the morale and performance of their teams, many leaders are reflecting on how small, nimble teams built in a hurry to deal with the COVID-19 emergency made important decisions faster and better. Organizations are restructuring their strategies to make decisions faster and with much less data and certainty than before. In a world where fast beats slow, companies that can institutionalize these forms of speedy and effective decentralization will jump ahead of the competition.
Post pandemic, organizations must address important questions regarding growth and scalability. Factors such as 1) ability to embed data and analytics in decision making; 2) creation of learning platforms that support both individual and institutional experimentation and learning at scale; 3) cultivation of an organizational culture that fosters value creation with other partners., will matter most in the growth of an organization post this crisis.
4. Accelerating digital adoption to enable reimagination
And fourth, digital adoption. Digitization will play a defining role in making organizations recover from the COVID-19. During the early recovery period, business leaders will face some basic challenges like 1) a significant change in consumer behavior and demand patterns and 2) how the economy lurches back to life will differ from country to country and even city to city.
In order to address these challenges, business leaders will need to set a digital agenda and deliver it quickly, on the order of two to three months, as opposed to the previous norm of a year or more.
It’s not just about return. It’s about reimagining, as you return.
Learn more here.