COVID-19 has changed economies, social systems, consumer behaviours and what customers value and demand. Regulators have stepped in, competitors will react, business partners will fail, employee motivations will change, politics will remain at the forefront and technology will continue to disrupt.
All of these forces are colliding at the same time, materially changing the system of business. The changes are also swift and their scale, unprecedented. When systemic change happens in, or to a business, business strategy needs to adapt.
While many small, medium and large businesses may not survive, every survivor will need to adapt. The future of business is not about resiliency, i.e., snapping back into form. It’s about renewal and adapting to the paradigm-shifting changes that are already unfolding.
Localise Supply Chains
In recent decades, businesses have focused on maximising efficiency. To cut costs, speed up production, and be more streamlined, manufacturers have concentrated their operations on suppliers in a few countries. These global supply chains created savings and boosted profits when all was running smoothly. But the disruption from the coronavirus pandemic has been immense.
China serves as the hub for global apparel manufacturing and exports; brands and retailers across the world have suffered from significant delays in manufacturing and distribution when the first wave of COVID-19 originated in China, where factories were forced to close for weeks.
Future markets will benefit from rebalancing their operations by bringing at least some of those that had previously been moved overseas nearer to home. Resilience will trump efficiency through a model where manufacturing is brought closer to places of consumption instead of relying entirely on global shipments.
via: The Fashion Law
Joe McDonnell, head of WGSN Insight, predicts a re-evaluation and shift in consumer priorities as a slowing down of spending and activity corresponds to forced acceleration of digital transformation.
People are being forced to work from home, but their whole life is being forced to adapt digitally. These behaviours will not disappear once the quarantine is over, it’s very likely that people who have been forced to adopt digital practices will continue these. Consumer appetite for delivery services is going to continue after the crisis is over and retailers [that] are unable to fulfil are unlikely to succeed, even in a post-COVID world.
The companies which are best placed to benefit from the situations are those which offer comfort, convenience or necessity for consumers. For brands there’s space to think about the digitisation of your product, not just the delivery.
By digitising processes businesses can harness the opportunities that come from economies of knowledge; hence, compensating for those lost in scale.
via: U.S. Chamber of Commerce
Instead of reverting back to business as usual in the wake of the coronavirus, companies should consider other potential crises in the future that could result from our continuous interference with ecosystems, or from climate change. A crisis is an opportunity to rethink things rather than patch up previous ways.
In the aftermath of the pandemic, growth might be relaunched by a decisive reinvention of our economies around green technology, renewable energy and natural infrastructure to develop more efficient and resilient low-carbon economies.
While the movement towards a multi-stakeholder approach to business has increased in recent years, the coronavirus pandemic creates an opportunity for a conscious mindset change. Responsible business leaders will recognise this moment as an opportunity to use a societal lens that contributes to stability and makes everyone better off in the long term.
via: The Fashion Law
Shift From Reactive to Proactive
Out of short-term necessity, organizational responsiveness to COVID-19 has been largely reactive. The following decision tree can help executives to more proactively and strategically think through their potential COVID-19 response options.
3 questions to ask
Can we offer a version of our products and/or services through an online channel?
Can we use our existing infrastructure to produce products and/or offer services that are in demand?
How can we rapidly increase our capacity to produce and distribute products and/or services?
Answering these questions and responding strategically to the current crisis requires a high degree of creativity, an openness to challenging assumptions, and a willingness to look beyond the obvious in addressing the threats — and embracing the new opportunities — created by COVID-19.