How to create a strategy for the new normal

Building resilience and developing a post-crisis strategy to seize emerging opportunities for a successful future

The number of COVID-19 patients in Belgian hospitals is going down, shops and restaurants have reopened, and employees are gradually returning to the workplace. The coronavirus crisis seems under control and many businesses are trying to overcome the economic shock of the pandemic. Building resilience over the next months is key. It’s equally important to create a strategy that looks beyond the crisis and positions your company to win in the new normal that is gradually taking shape.

Though the peak of COVID-19 infections in Belgium is probably behind us, the pandemic will continue to impact world economies and supply chains. The economic outlook is uncertain. Most businesses have reopened, but many are still operating below capacity. Companies will struggle to recover from the losses caused by the lockdown. Undoubtedly, we will see more bankruptcies in the months to come. A lot of companies will also announce disappointing quarterly results, causing more turmoil on the stock market.

What makes this crisis so unique is that the impact varies across sectors and even within industries, increasing the level of economic turbulence and unpredictability. For businesses the first shock may be over, but the actual economic crisis is only beginning.

Most companies are now focussing on the next twelve to eighteen months to deal with the uncertain economic environment, but business leaders aren’t always thinking about the strategic direction for what comes after. It’s important to make a distinction between:

• Building a resilient enterprise to navigate through the upcoming crisis.
• Taking a long-term perspective and getting ready for the fundamental changes that lie ahead by reframing and transforming your organisation.

Companies need to focus on both. And although there may be some overlaps between these two focus areas, each requires a different and very specific approach. 

1. Overcoming the crisis by building a resilient enterprise

During the first shockwaves of the crisis a lot of companies came up with creative solutions to generate some revenue and manage costs. But these measures don’t built resilient organisations. Resilience is the capability to withstand additional shocks to your business and thrive at the same time. For the next twelve to eighteen months organisations will need to lead through the ongoing business disruptions by ensuring they are financially healthy, are taking good care of their customers and can maintain a strong market presence.

Become resilient by following these three steps:

1. Pressure-test your business functions and assess your vulnerabilities.
   
   
2. Identify opportunities by looking at five focus areas:
   • Which classic recipes can you apply?
   • How can you be genuinely agile?
   • How can you leverage state aid?
   • How can you develop innovative collaborations and partnerships?
   • Are you always acting ethically and are your business projects socially responsible?
     
     
3. Prioritise, implement and monitor measures. 

Staying close to your customers

Consumer segments are shifting and companies need to adapt accordingly. The latest EY Future Consumer Index revealed that underlying changes in consumer behaviour and attitudes are already emerging. Quantifying these behaviours via data analytics and following up on them is crucial. As a company you need to get even closer to your customers and understand how they are evolving.

Translating trends and industry effects in your strategy

How can companies ensure their new strategy reflects changing trends and the impact on both their industry and organisation? Traditional approaches are still relevant to shape your strategy plan, but in the current volatile environment the emphasis will lay much more on the first step.

Structure your strategy approach by:

1. Understanding the new normal: what trends and opportunities do you observe?
   
   
2. Translating the gathered information from step one into key challenges and emerging opportunities.
   
   
3. Defining the strategic consequences and implications based on the findings of step two.
   
   
4. Translating the strategic consequences into an implementation and transformation plan.
   
   

It’s clear that the world around us is changing. Business leaders who embrace that change by building a resilient enterprise while preparing a strategy to grasp emerging opportunities will undoubtedly be tomorrow’s winners in the new normal.

Helping business leaders grow in a transformative age

Connected Capital Solutions help clients drive inclusive growth by focusing on their capital and (transaction) strategy through to execution to drive fast-track value creation.

EY supports business leaders achieve maximum value for their organisation. EY Parthenon experts challenge assumptions and help create strategies that help clients grow, optimise their portfolios and improve profitability.