Experts identify five questions that will help managers prepare their business to overcome the coronary crisis
The coronavirus epidemic is a crisis that tragically affects people’s lives. This thing can not be denied that it act as a catalyst for change – were on a scale not seen since economic, after the social, personal and corporate – war. The number of changes and the speed that accompanies them is demonstrated by the fact that companies have to face changes that occur once in a generation. And despite all the uncertainty of the situation, it is already clear that a digital future awaits us.
Complex economic prospects and ongoing uncertainty require CEOs to make difficult decisions. Some are focused on downsizing and surviving the storm. Others are taking decisive action so that at the end of the crisis, their companies are stronger than they are today.
In a new study by a consulting company McKinsey It has been reported that the COVID-19 crisis can accelerate changes in digital technology and significantly change the business landscape. Even before the global epidemic, 92% of companies believed that their business model needed to be changed through digitization. And the crisis only accelerated these changes. Digital conversion means, first, the transition from experiments to active scale-up. These measures should be in two directions: within the company business through the development of new lines. Successful digital companies use this approach.
McKinsey experts recognize the top 5 questions that will help managers prepare their business for recovery from a coronary crisis.
1. Do you have a clear idea of the outcome and a plan to overcome the crisis?
Despite some successes in adapting to how new living conditions gradually changed their work model, many business executives were disappointed: customers who switched from servicing the digital channel to scaling internal operations. One of the main reasons for the difficulties is that, although companies have implemented several digital initiatives, they have not created a holistic and integrated digital mechanism to promote business.
Accelerating digital transformation requires managers to take a step back and analyze potential action plans, as well as assumptions about cost and feasibility. These assumptions should be based on the new behavior of customers, suppliers and regulatory changes.
For example, new consumer groups are now appearing for the first time trying digital products and services. In the United States, approximately 35% of Generation Z representatives were using video chat for the first time during quarantine (among representatives of the Baby Boomer generation, 6%). And 54% of households with incomes over $ 100,000 first tried online streaming (compared to 35% of families with incomes below 50 thousand).
B 2 B segment B digital interactions with B2B clients now doubled compared to traditional channels – from the beginning of coronary trouble, jumped nearly 30%. In the remote, regulation, licensing sector, all the questions that previously hindered the digital development of these industries were dismissed.
One of the most important tasks in the implementation of a roadmap (action plan) is the coordination of all phases between management and team leaders, as well as providing the necessary resources to complete the tasks. However, coordination during quarantine and remote work is a little complicated – during a video conference or phone call, the CEO should openly discuss the work plan, discuss the allocation of responsibilities and availability of resources.
2. How can business development contribute to faster entry into new markets and reach new customers?
Many companies can match the pace of the crisis and change in customer behavior only by creating something outside the main company. However, the problem is that less than 10% of business projects are successful. The success rate increases to 67% when enterprises adopt a more structured approach – including a clear strategy, entrepreneurial talent, and the right balance between corporate support and operational independence. Corporate support is particularly important now.
A recent study in the B2B segment shows that large companies remain more stable, with around 50% planning to increase or maintain their costs in the short and long term.
Experts say there are many opportunities to build a post-crisis business. And will play an important role in promoting the expansion of CEO and business.
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3. To accelerate changes in your business to focus on a more flexible operating model?
Once the agile approach was a specialized field of information technology, and now almost all areas of business have entered. Companies are forced to move and function at an unprecedented pace – and all of it from afar. For example, a large bank faced a 20-fold increase in lending under the lending program to support small businesses. He approached a multidisciplinary team of artists to solve this problem – from communication with customers to underwriting, product development and employee training. And all of this is far from complete. The bank was successful with using this Agile approach.
The nature of the crisis has forced teams to act rapidly in a state of uncertainty, make decisions with limited control, and respond to rapidly changing situations. As a rule, 50 people make up to 80% of decisions.
Some new ways of working are more likely an answer to the current situation. But for CEOs, it does a good job is important to protect. Centralization can be useful for crisis management, but should not be confused with a model of development. It is about harnessing the vitality and effectiveness of advanced flexible teams working on goals, not just tasks.
Video conferencing can be an effective way of verifying the completion of tasks. But in-person meetings will also be necessary – previous studies have shown that productivity decreases as the number of employees decreases. Most likely, some hybrid models will be used that take advantage of remote and personal communication. The “quarantine” experience has shown that the ideal effective team size is 5 to 9 people. The Zoom meeting, which attracts 20 people, but only nine of them appear on screen, is often a disappointment. Leaders must be able to see how many people in the team form the backbone of it and how much they can do if they provide the right tools and support.
To learn and to adapt: the need to solve problems immediately identified some more important capabilities.
4. How should the strategy change in relation to employees?
As the crisis affects the economy, cuts will increase the need of cost. Leaders will face difficult staff decisions. Nevertheless, one must keep in mind the importance of talent in the process of recovery and growth of the company after a crisis. It is also important to develop the skills of people who already work in the company.
Managers should build this strategy based on the type of activity of the company. For example, in technology, it is necessary to focus on building your base of leading engineers who are ten times more productive than less experienced developers.
It is worth noting the training of employees. Before the world faced COVID-19, most companies tried to train employees online. Now people are already addicted to devices for remote work. This enables teams to quickly acquire the new knowledge needed during a crisis.
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5. What investments are necessary to create a technological environment that will allow the company to grow?
Mounting customers ranging from support remote work in grayscale digital channels Koronovayrs interruptions underlined the important role of technology. During this period, many failures showed systemic flaws. This should not be a big surprise, as 79% of organizations that were engaged in digitization are still in the early stages of their technological transformation. More importantly, he highlighted a point that can no longer be ignored: technology is an important value factor, not just a support function. This understanding plays an important role, because all too often the main factor when it comes to technology is cost. Flexibility, cyber security and resilience must also be considered nowadays.
To achieve this goal, CEOs will need to work with their Chief Information Technology (CIO) experts or CTOs to invest in technology, modernize legacy systems, and develop micro service architectures . Direct participation of CIOs contributed to the rapid progress in shaping a business strategy in achieving the company’s digital goals.
Emphasis is also placed on data analysis and advanced analysis. The need for accurate and topical data has never been so intense. It showed South Korean government has worked to launch COVID-19 data platform with the companies. The latter allowed shortening of time to track contacts from less than 10 minutes on 26 March to the first 24 hours of February. For this, a digital surveillance system was developed that brings together information from 27 public and private organizations.
Additional initiatives may include upgrading the data architecture or moving to the cloud. In order to get the full value of the data in the future, it will be important to update the algorithm based on new realities. At the same time, company directors will have to work with their risk experts to ensure that data is used in accordance with strict privacy and cyber security regulations.
The growth of digitalization has also highlighted the increasing importance of ecosystems. For example, in response to customer needs during a crisis, some banks have integrated medical advice, doctor services and car services for their customers. Protocols and standards In general this rapid integration, the Chief Executive Officer should determine which is most beneficial for ecosystems business.
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