With the extreme uncertainty that the past few months have brought, we’ve seen companies and business leaders focus on preparing for the future in a multitude of ways. From optimizing business practices to implementing innovative digital solutions, COVID-19 has forced many companies to rethink and reprioritize their goals to ensure success.
While many leaders primarily focus on their organization’s current crisis response strategies, it is also crucial now more than ever for them to look ahead and set their company up for long-term success while adapting to the present-day climate.
How to Win in the New Normal
To achieve success in what is now considered our new normal, companies should not only work toward winning the fight against the competition, but they should also be prepared to transform the business to win the future.
To win in the new reality brought on by the global pandemic, leaders must be future-focused and always ready to adapt to new business models and trends. As the situation changes, so do the needs of customers everywhere. These ever-changing needs of consumers have called for the need to determine new business models and trends, especially in the new normal.
Continue reading to learn more about five key areas that all leaders should focus on during an economic downturn while keeping long-term success at the top of their minds.
1. Mapping Out the Plan, Assembling the Team
To ensure long-term success, leaders must provide their teams with guidance and direction that is crystal-clear. Transparency and communication are important now more than ever, so leaders should always be sure to define their agenda, or what their overall plan or goals are for the company.
Even in times as unprecedented as these, CEOs should always look at least 12-24 months ahead. If possible, they should plan even more into the future, going as far as envisioning what the world will be like in the many years post-COVID-19.
As with all decisions, timing is imperative. For a CEO to reach success, they must stay ahead of the competition and remain up-to-date on the latest trends in the current climate. Here are a few ways to begin defining an agenda both in the near and far future.
Transforming Business Through Crisis Management
Even for the most experienced PR experts, crisis-management is never a piece of cake. This is why most companies have implemented a rapid response team to tackle all crisis-management efforts.
When forming this team, leaders should be sure to keep inclusivity at the forefront. They can do this by extending membership to a wide range of employees and including people from all functional areas.
Setting Up a Rapid Response Team
What does success look like for an organization’s rapid response team? For many in this role, success means driving quick and innovative actions, solutions, and change for the next one to two years.
Whether it’s through quick wins or long-term projects, the team should be focused on optimizing business by prioritizing opportunity areas and appointing the appropriate subject matter expert as the lead.
A company should also stand behind its rapid response team, supporting the team’s efforts through projects and initiatives. They can help the team by solidifying a streamlined and robust process to establish governance, processes, and reporting. To ensure buy-in and maintain this process, a leadership sign-off is a must for all initiatives.
2. Protecting People’s Long-Term Success
In preparing for the future, leaders should keep the needs of their team at the forefront. Doing so will play a major role in achieving long-term success.
Preparing for the Future through New Work Practices
Throughout the pandemic, we’ve seen many new work practices come into play, especially the notion of working from home. And the truth of the matter is, many of these new practices show no signs of going away. We are currently living in a unique moment in time in which we have the opportunity to redefine the future of work.
In the current climate, we’ve deviated from tradition and have implemented new tactics, such as remote work, which was previously looked down upon and deemed inefficient. Today, however, we know this is untrue as many employees have reported higher rates of productivity and efficiency while working from home. Additionally, adopting the work-from-home trend as a new business practice has helped companies optimize business by increasing employee satisfaction, engagement, and efficiency.
Prioritizing Health and Safety
The pandemic has also emphasized the importance of health and wellness among employees in their personal and professional lives. As a result, many companies have elevated their standards for health and hygiene in the workplace. These new health protocols will likely be in use not only today but in the years to come.
To keep employees safe in the workplace while better managing business continuity and risk, companies will need to employ virus-monitoring systems. This tool will help business leaders be more transparent and consistent in their communications by tracking employee health, keeping better contact tracing records, and monitoring safe workplace practices. This will, in turn, help identify and break infection chains before they spread while encouraging employees to maintain social distancing and more hygienic habits in the workplace.
Keeping the team’s safety and needs at the forefront will help business leaders ensure a safe and motivated team, even during the most challenging times.
3. Maintaining Economic Efficiency and Stability
To achieve success, many business leaders want to make sure that their current operating model is efficient and impactful. While it is essential to ascertain that the organization is doing fine in the short-term, it is even more critical for business leaders to prioritize long-term success. They should ensure that the current operating model and cost structure is efficient enough to support the company for the next 12-24 months.
In doing so, CEOs should also reduce costs across the company while effectively managing liquidity and net working capital.
Managing Liquidity and Net Working Capital
In handling the company’s finances, leaders should be sure to leave enough financial room to help the company navigate any unexpected challenges that may present itself.
Managing finance efforts should be led by a cash management office that has experience in doing so. They will be tasked with managing short-term liquidity, creating liquidity plans, launching measures to save and preserve finances, and predicting cash flow and developments in liquidity. This team will support the company by ensuring they are financially on the right foot in the months and years to come.
At the end of the day, companies need to increase liquidity and reduce all non-essential spending. This will help significantly in ensuring support for the next two years.
Cutting Company Costs
When cutting costs, companies should remember to consider both personnel and non-personnel costs.
Adjusting non-personnel costs will help generate a quick impact without disrupting the company’s current workforce. In this case, one area to reduce costs would be in the supply chain. The company would do so by improving supplier management and logistics operations.
Another opportunity in reducing non-personnel costs would be to cut technology spending by restructuring the pipeline of current technology and information technology projects toward more high-value and strategic-focused projects. By focusing on these future-oriented platforms and new ways of working, leaders are essentially making room for remote working and digital collaboration, which is undoubtedly more cost-efficient.
When it comes to personnel costs, a company may need to consider preparing for the future by introducing more flexible work models or resizing the workforce in frontline and support functions. By optimizing business in this way, organizations may reduce operating costs by over 10%.
However, when reducing costs, it is important to take a deep dive and see where the company would benefit most. Leaders should review their product portfolios and take some time to analyze a variety of cost-saving opportunities.
Managing the Top Line
As a result of the pandemic, the majority of companies have had to move their operations online, focusing on digital sales channels instead of other channels they may be used to. In this new phase, e-commerce has been a helpful tool in maintaining customer engagement and generating additional sales.
In these trying times, customer needs and behaviors have shifted greatly. It’s critical for businesses to keep up with the competition by implementing innovative solutions to benefit customers.
4. Transforming the Business to Win the Future
While it is important to make sure that the business is doing everything needed to ensure success in the present, it is especially important to look ahead always and note what needs to be done to win the future.
To ensure long-term success, leaders need to start implementing positive change in the present. Here are three they can do to transform the business and ensure CEO success.
Reimagining the Business Model
Even if the organization has a successful way to operate, leaders should always make room to adapt their business model to meet the fluctuating demands and preferences of customers.
This is the prime time for companies to put their most innovative solutions into play. Even during a recession, these inventive solutions can put companies at a significant advantage among the competition.
Increasing the Company’s Supply Chain Resilience
At the onset of the COVID-19 pandemic, one key revelation was made regarding the global supply chain: It operated efficiently in a steady environment but was impacted greatly by external shocks.
This revelation became an evident weak spot for many companies. In fact, disruptions to the supply chain became the main reason many companies were forced to shut down or slow down production even before the pandemic hit full-force.
When transforming to win the future, leaders must prioritize increasing the resilience of their end-to-end supply chain and internal operations. To do so, leaders must first work on optimizing business by reviewing their current business model and making tweaks based on the footprint of its supplier network and production network.
When going this route, leaders can explore implementing many innovative solutions for long-term success. This includes the use of modern digital tools — such as a supply chain control tower or a digital twin solution — that can improve transparency and stability while increasing productivity.
Identifying Potential Mergers and Acquisitions (M&A)
Leaders should begin by reviewing their business portfolios to identify potential opportunities for divestitures, as well as mergers and acquisitions (M&A). The majority of opportunities may come through as the economy weakens. In fact, research shows that the relative total shareholder return of deals completed in a weak economy exceeded deals completed in a strong economy by 10 percentage points.
Pursuing the right deals will give a company an upper hand among the competition by creating sustainable value. To achieve long-term success, companies need to have a clear idea of their M&A strategy. Sticking to their well-defined strategic vision will allow companies to continuously grow and adapt to the increased uncertainty we are faced with in this new normal.
5. Optimizing Business through Digital Tools
In recent years, many companies have made it a priority to develop their strategic roadmap by turning to digital resources that allow them to keep up with emerging technology, such as artificial intelligence (AI).
The response to the global pandemic has brought on an even greater demand for implementing innovative and digital solutions to enable remote work and improve the online customer experience. A recent survey revealed that 80% of business leaders agree that digital transformation has become more urgent during this crisis.
Take Advantage of the Current Climate
To ensure success, leaders should leverage the current momentum to win the fight and win the future. In doing so, CEOs should also remember to create business value as they adopt new trends and ways of working in the new normal. This will also help ensure that all digital initiatives will pay off both in the short- and long-term.
Preparing for the Future through Technology
Using digital technologies, such as AI, can help leaders optimize business by significantly reducing costs. For example, in the supply chain and manufacturing, costs can be reduced anywhere from 10%-30% by leveraging emerging tech. Furthermore, procurement spending can be reduced by 10%-20% and shared services anywhere from 20% up to 40%.
The impacts are so great mainly because digital solutions in these fields play a major role in streamlining processes that may normally take a long time. A few examples:
- Robotic process automation can increase the efficiency of back-office processes.
- Advanced data analytics helps in optimizing business practices and processes.
- Digital automation technologies allow employee productivity to skyrocket.
As commonly known, technology is always evolving. Each day often brings new advances and evolutions. Bionic supply chain, for example, is a new method that aims to create a seamless connection and communication between humans and digital systems to make for a more comfortable and personalized experience.
Successfully implementing these digital methods, however, is not always easy. To be successful here, leaders must push their organizations to strengthen their technology and information technology functions to accelerate digitization while keeping up-to-date on the latest trends.
Working Toward Transforming Business and Winning the Future
If leaders stick with these five points, they will be positioning the company at a strong advantage to win the fight in the next one to two years. This, in turn, can lead to long-term success by putting many CEOs in a prime position to win the future of their companies.
Going into the global pandemic has been tough for many, as many companies have had to adapt to several workplace changes. But those companies that emerge from this crisis will come out stronger than ever as experts in agile decision-making and taking rapid action in the present and future. The actions leaders take today will have a significant impact on the business’s future — so they must choose wisely.
Adapting to the new normal has not been easy. We know that adapting post-COVID may also come with its share of new challenges as companies everywhere will have to rethink more efficient ways of prioritizing and doing business.
Here at Infinity Consulting Solutions (ICS), we are committed to providing our clients and candidates with the guidance and solutions they need in their journeys. If you have any questions about leadership and decision making post-COVID-19, please do not hesitate to contact us. We are always here to help employers and candidates through these unprecedented times.