Stop Planning for a “New Normal”: Chose Resilient Reinvention™ Instead
Like many executives and business owners I’ve been thinking about strategic planning, the next phase of this COVID-19 global pandemic and the focus on a “New Normal.” Not to be contrarian, but I think that approach reads the situation entirely wrong. There won’t be a “New Normal” for a long time, likely years, so we need to plan accordingly. Instead, we need a new approach, based on a willingness to make continual adjustments coupled with the agility to make changes, or “Resilient Reinvention™”.
According to Dictionary.com the definition of “normal” is “conforming to a standard; usual, typical, or expected,” while a “new normal” is “a previously unfamiliar or atypical situation that has become standard, usual, or expected.” The situation we are in with this novel coronavirus means that we have no standard to measure against, and very little usual or typical that we can fall back on. We don’t have a standard approach on how to restart our businesses, bring back employees and don’t know how or when consumers and businesses will resume business activities at previous levels. It’s highly likely that we will start resuming our personal and professional lives, then there will be an outbreak, or a resurgence of the disease and we will pull back again creating a pattern of fits and starts for many businesses in a variety of regions. Complicating this is the differing approaches each state in the US and each country will be taking, resulting in different phases of greater and lesser normalcy. Global business and supply chains will continue to be inconsistent and erratic. It will be impossible to predict with any reliability what will change and to what degree for the next few years. So rather than plan for a “new normal” that may not occur for several years, I recommend businesses plan for continued change and erratic phases in this post COVID-19 world and build in the resilience needed to better enable adjustments.
We are all thinking differently about our businesses, with evolving strategy demands and changing planning processes required right now. We should consider a new model. Our business strategy and plans are like LEGO® blocks, with components we create and recombine into new products and services that form variations which can more effectively evolve and transform over time. Think of it like CEOs and business owners willingly becoming LEGO® Master Builders with the company’s assets and components as elements that can be assembled and reassembled in different combinations to meet the continual changing needs and conditions we will be finding ourselves in for the next several years. I call this approach of continually building, adjusting, and rebuilding Resilient Reinvention™.
What are the characteristics of Resilient Reinvention™? Businesses that adopt this approach will focus on how to thrive in times of evolutionary (incremental) change while simultaneously preparing for survival and rapid response to revolutionary (transformational) change, like we are seeing currently. CEOs and business owners may make choices that are less optimal in the current world to allow more flexibility and responsiveness should the need arise. Adopting this approach impacts business strategy, planning and operations in multiple ways. Here are five areas for businesses to focus on so they can reinvent themselves to build more resilience and better adapt in a world with a more rapid pace of change.
Rebuilding Organizational Structures and Emphasizing Employee Resilience
There will be far reaching changes as a result of COVID-19 in the relationship between employers and employees. Increased distance working or telecommuting is inevitable. Beyond that, businesses need to focus on intentionally embedding more resilience and flexibility in the organization’s structure and its employees. That means assessing employees’ responsibilities and capabilities, their ability to absorb more functions as needed, cross training more and identifying how critical each person is to the functioning of the company. Every employee will have to adapt, whether slowly or quickly, and understanding their attitude, aptitudes, and skills is critical. With the right attitude and the aptitude needed to gain new expertise, the skills the employees start with will be less relevant. Everyone must have the ability to grow and adapt, with a strong tolerance for change and hiring should reflect that priority. Businesses should also develop scenarios with differing numbers of employees and structures based on changing business needs to support evolving go-to-market strategies. Keeping knowledgeable, top-performing employees engaged to help a business navigate through this constantly changing world will be critical and could require companies to come up with creative pay and benefit solutions that are regularly adjusted.
Creating Resilience in Go-to-Market Strategies and Product Offerings
Go-to-market strategies should also be revised for more built-in resilience. If you sell through a retail storefront that wasn’t declared an “essential” business” during COVID-19, you have already been scrambling to come up with alternative go-to-market strategies, and that has likely been a time-consuming, expensive and painful process. Businesses need to proactively evaluate their product and services solutions (existing and future), considering what could be offered and how it would be sold, also weighing options if services are unavailable or products can’t be produced or distributed through typical sales channels. Rethinking which products could be sold, how and to which audiences could provide invaluable insights. Understanding the sales risks of a single channel and taking a closer look at multi-channel options could be an important step in gaining flexibility. Mitigating risks of revenue loss from major customers/industry sectors or the potential loss of key suppliers and the resulting contingency planning is also an important strategic planning effort. Understanding how to shift marketing’s focus and being able to quickly pivot in the face of unexpected challenges positions a business to take advantage of changing revenue opportunities and gain market share while other businesses are desperately trying to adjust.
Developing Deeper Financial Resilience
As the world and businesses adjusted to widespread shutdowns and social distancing requirements caused by COVID-19, many companies gained a reinforced understanding that cash is king. In hindsight, there are many things that businesses might rethink. Building a more resilient business model and capital structure is another critical part of the Resilience Reinvention™ mindset. Cash flow, debt structure, lines of credit, Accounts Payable length, equipment leasing, rent or mortgage terms and payroll costs are among the financial aspects that need to be evaluated and scenarios developed for increased resiliency. Determining financial maneuvering room in advance to identify what changes could and should be made proactively helps executives understand which levers might need to be pulled and their impact. Advance modeling of potentially negative scenarios such as when pay and benefit cuts or suspensions would need to be made could be helpful. Also evaluating what would be needed if it were possible to unexpectedly acquire a slow-moving large competitor, buy a new product or opportunistically expand into a new sales distribution channel or new market, and the trade offs required would enable quicker execution on unexpected opportunities and help a business overtake companies that were slower to reinvent themselves.
Strengthening Corporate Systems for Improved Resilience and Responsiveness
Fundamental to embedding more resilience into a company is the requirement for effective and timely systems that provide accurate data enabling the early uncovering of trends or warning signs acting as an alert to the need to make strategic shifts. Delivering metrics and key performance indicators to executives and managers consistently is crucial. Some companies may need to overhaul their systems, integrate disparate systems, and prioritize data hygiene but that effort will be well worth it. If your company is one that relies on products that move through an offshore supply chain, understanding quickly if it becomes clogged or breaks down is critical. Your business might need to change a product offering, pivot to nearshoring or onshoring which would result in other major strategy shifts that had to be made. It isn’t just data systems than need to be strengthened, having effective communication systems with up-to-date contact information, to reach employees and contractors as well as customers and vendors is an on-going challenge that must also be prioritized.
Planning for Business Disaster Resilience
If there is one lesson COVID-19 has reinforced it is that as part of strategic planning sessions, companies should adopt specific disaster planning scenarios and develop robust playbooks on how to respond to potential rapid shifts. This type of planning goes way beyond succession planning. Disasters such as cyber hacking for ransom, a massive earthquake at the headquarters, manufacturing facilities or distribution centers, global contagion, terrorist attack, mass shooting, and simultaneous death or disability of multiple executives (particularly in the case of family-owned businesses) are just some examples of disasters that could cause profound impacts with business-ending results. Preemptively discussing and aligning on mitigation scenarios in advance could make all the difference to a company’s survival.
With the spread of COVID-19 and the global pandemic we are in the midst of, businesses can’t reply on the return of a “New Normal” anytime soon and must instead fundamentally change how their businesses are structured and managed to adapt to a world that will see continued periodic disruptions for at least the next couple of years. Companies should take this opportunity to build more flexibility into their business as they work to refine and rework their business, product offerings and go-to-market strategies. By using the Resilience Reinvention™ approach to build in the assumption of continuing change and consider in advance how to overcome, mitigate, as well as take advantage of new opportunities and market changes, businesses will become more nimble, respond more quickly with coordinated plans and not just survive, but thrive.
Additional Resources
If you are interested in reading another article about changes expected as a result of the COVID-19 global pandemic here is some additional information:
Fast Company: "All the things COVID-19 will change forever, according to 30 top experts"