The need to transform your businesses to succeed in the post COVID-19 environment

“The principles of yesterday no longer apply… we must think in terms of tomorrow”- American Air Force General Henry Arnold

The world as we know it is changing. Different countries have instituted stringent containment measures to slow the spread of the COVID-19 pandemic. Human relationship is changing as we are advised to curb our desire for social contact by limiting group interaction and practicing social distancing. A recent study by Harvard University warns of the need to maintain social distancing measures into 2022 given the likelihood of seasonal variation in how the virus manifests unless interventions such as vaccines and/or drug therapies become available. The virus has revealed the risks most economies face from an overdependence on the global supply chain and its distribution networks.

The New York Times and the Peterson Institute for International Economics reports that the European Union and member countries have imposed emergency export restrictions on protective medical equipment to other countries who badly need them to fight the COVID-19 pandemic, citing supply shortages. Policy makers in North America and Europe are beginning to examine the deficiency in the diversity of suppliers- the point of failure of globalisation- and are leaning towards a greater national economic flexibility, or regional emphasis on production. The Bank of America reports that 80 percent of the multinational corporations investigated plan to re-shore part of their production. These measures are akin to an experiment to redefine globalisation.

Today the world over, we are seeing evolving customer expectations, growth in new marketing and sales channels, and fundamental shifts in technology and markets, triggered by new competition and the coronavirus pandemic. Business leaders are in uncharted waters and are facing greater pressure and even less time to digest these rapid, and dynamic changes wherein a move in the wrong direction can be quickly overwhelming. Most are in problem solving mode to realign their strategies which have been upended by today’s issues.

These businesses must brace up to the knowledge that today’s competitive advantage can and is becoming obsolete. This is not the time to simply pursue an agenda that is focused on downsizing, portfolio rationalisation, and process redesign. As important as these activities are, they are limited in driving any business to the pinnacle of the industry. The businesses that will survive are those who seek and exploit the opportunities within this crisis, with quick, robust initiatives that are perfectly executed to get it to the future.

This future is not years away, separated from the present by a line. Competing for the future goes beyond outrunning opponents to a prize. Today, businesses are forced to contend with “non-traditional” competitors who, not bugged down by convention, develop more innovative ways to solve problems. Does this mean turning our backs on today’s systems and processes? Of course not. The linkage between the present and the future assures that tomorrow is built on the realities and decisions of today- resources, environment, people, and technology.

However, their disconnect suggests that tomorrow’s competitive advantages will be different. Therefore, businesses must go beyond benchmarking existing’s products and processes towards creating their own road map to the future, ensuring that their employees are adequately skilled, processes are properly engineered, product portfolio are correctly aligned, and resources are appropriately allocated. A failure to foresee and share in the opportunities of the future will have significant economic implications for businesses and nations.

This future is not years away, separated from the present by a line. Competing for the future goes beyond outrunning opponents to a prize. Today, businesses are forced to contend with non-traditional competitors who, not bugged down by convention, develop more innovative ways to solve problems

Globally, we stand on the verge of a revolution as profound as that which gave birth to modern industry. Industry structures are changing, and entirely new industries are been born. Opportunities that at first seem niche could prove to be pioneering for tomorrow’s mass market. The level of change across different industries- education, retail, healthcare, financial services, telecommunications, energy, manufacturing, and others- will vary significantly. Businesses must proactively invest resources in building new competencies to exploit the opportunities that will arise in their industries. The real issue is whether these investments happen- in crisis atmosphere – or stems from management’s opinion of the future.

A business that wants to control its own destiny must first understand how to control the destiny of its industry. As important as business level transformation is, it is a secondary challenge to industry transformation. Many businesses have lost industry leadership because they failed to invest in controlling the destiny of their industries. They are therefore playing catchup by adapting, using dimensions established by industry interlopers.

Therefore, to transform the industry and create new forms of competitive advantage, business leaders must fundamentally reshape industry boundaries and change the rules of engagement. The goal is to exploit the changes in the competitive environment to grow the market and make the competition irrelevant. However, new realities have seen a lot of uncertainty and significant changes, much widespread than expected which has created a structural challenge that requires new skills and competencies.

In recent years, the unprecedented advancement in technology has changed how we behave, how we learn and how businesses operate. Businesses are becoming virtual and employees come together only when needed, where it is needed and with what is needed via portable communication devices. Companies like Amazon, Google, IBM, and Microsoft are facilitating this new structure, having made significant investments in cloud-based services and tools to support the gradual changes that businesses were predicted to face. Business leaders can only take advantage of these changes and get to the future first if they: (1) understand the nature of competition for the future; (2) can perceive tomorrow’s opportunities; (3) have the resources to get to the future faster than the competition, without taking undue risks; and (4) can energise their team for the intellectually and emotionally challenging journey to the future.

Employees are watching to see if their leaders ‘have their back’ in navigating this crisis. They are used to hearing all the talk about the importance of human capital. However, they are torn between being the most valuable assets and the most expendable assets. Therefore, business leaders must manage information around change properly because invariably, bad news known is better than worse news imagined.

A Nigerian financial institution attempted to take advantage of the recent containment measures and economic crises to drive its transformation plans towards a more digital institution. In the operational sense, it made perfect sense. However, emotionally it could undermine efforts to promote loyalty among those remaining as the most talented people anticipate the massacre and flee for safety.

Most managers tasked with managing organisational transformation forget to ask, “Transform to what?”. “What is the future state of the business?”, “How do I balance the operational vs emotional arguments of the decision?”, “How do we know when we have started cutting muscle?”. They tend to simply focus on efforts that are more about catching up to the past than about leading the business to the future. To compete successfully for the future, managers must first understand that competing for the future is profoundly different from competing in the present. It is not enough to be efficient.

Businesses must be capable of fundamental rebirth, of regenerating its core strategies, and of recreating its industry- channels, processes, customers, performance metrics, and so on. Their transformation agenda must be driven by a position on the industry transformation: Where do we see this industry going in five or ten years? How do we ensure that we take maximum advantage of the industry evolution? What competencies should we have if we are to sit at the pinnacle of the industry? and how should we organise to take advantage of opportunities that may become available? Simply, any business that wants to survive today and tomorrow must be capable of not only doing things differently but also of doing different things.

Few businesses will survive in the long term if market and technological changes are faster than their strategic decision making. They must renew their strategy to innovate, adapt their structure, values, and skills, and test the industry boundaries to survive and thrive. The goal is a transformation process that is revolutionary in result, but evolutionary in execution. Business leaders can only take advantage of these changes if they understand how to compete for tomorrow’s opportunities and how to mobilise their resources to exploit these opportunities.

The COVID-19 pandemic brings significant opportunities to different industries. A failure to utilise the tacit knowledge within the business and invest in building new skills and competencies to exploit the opportunities will have significant economic implications. One thing is sure, the world that will emerge from the present situation will be significantly different from anything anyone imagines. In tomorrow’s world, winners will be those who have developed a culture of continuous transformation within their businesses.