How can you reframe your future during the chaos of today?

By

Andy Baldwin

EY Global Managing Partner – Client Service

Passionate about innovation, FinTech, inclusive growth and geopolitics. Leading media commentator on financial services, economics and investment trends. Keen cyclist.

6 minute read 4 Aug 2020
Related topics COVID-19

Even as they deal with the immediate impact of COVID-19, organizations should be thinking about how they’ll thrive in a post-pandemic world.

Business leaders today are rightly focused on the huge business continuity challenges posed by COVID-19. First and foremost is ensuring that employees are as safe as possible, securing financial sustainability, assessing the resilience of supply chains and reinforcing crucial systems to support unprecedented levels of remote working and online trading – while withstanding an upsurge in cyberattacks.

Unsurprisingly, the organizations that were furthest down the digital transformation journey before COVID-19 struck are tending to adapt to the crisis better than their peers. Their business models and working processes meant that they were able to pivot more rapidly or accelerate changes already underway. The businesses that lack a robust digital backbone or an online presence have struggled, as have those exposed to bricks-and-mortar retail, transportation, energy and tourism sectors. Meanwhile, software companies providing collaboration tools, software as a service and cloud capacity are seeing unprecedented level of demand to meet rapidly changing customer and business demand.

However, businesses, no matter how digitalized, need to try and look beyond the immediate business continuity or liquidity issues caused by the pandemic. As more focus turns to the loosening of restrictions in place by governments, we think businesses should be reframing what the future may look like.

What lessons should we take from this unprecedented pandemic to prepare for the “new normal” following COVID-19? How can we enable our organizations to thrive in a post-crisis world? Perhaps we can start by thinking about these four things:

1. Devise a lockdown exit strategy

Many national economies are experiencing unprecedented drops in GDP. Hence, governments are thinking seriously about “lockdown exit strategies” that will allow them to reboot economies while minimizing the threat to human lives. Similarly, businesses will need to figure out how they restart their operations while continuing to prioritize the well-being of their staff and dealing with the aftermath of lockdown and its immediate implications. This will require them to consider if and how staff return to offices or visit customer sites – while maintaining social distancing protocols.

Few businesses, if any, will return to the same working and customer service practices they enjoyed only six months ago, with short-term impacts to productivity, costs and employee morale. They may need to introduce greater agility and flexibility into their supply chain so that they can switch to new suppliers if necessary.

2. Consider the changing role of the state

The crisis has had the effect of dramatically expanding the state in many markets as governments have implemented strict rules to save lives and unveiled massive stimulus packages to save jobs and businesses. These measures have come at a huge economic and social cost, which is why many governments will be focused on ensuring that their countries won’t have to shut down to the same extent should another pandemic strike again in future. Following the financial crisis 10 years ago, governments around the world introduced more than 15,000 pieces of new legislation to strengthen the global financial system. You need to think about how new regulation may impact your organization’s business model and factor that into your strategy going forward.

Rather than invite a coordinated global response, the common threat of the pandemic has created more division and, in some cases, intensified competition. Going forward, we are likely to see greater regulation – potentially in areas such as employment rights, accessibility of data and the cash and liquidity buffers held by large businesses. We will likely see a rapid acceleration toward “e-government,” the digitization of health care and role of the state in its universal provision. 

Following the financial crisis 10 years ago, governments around the world introduced more than 15,000 pieces of new legislation in response. Think about how new regulation may impact your organization and factor that into your strategy.

With the dramatic fiscal intervention by the state in supporting impacted workers and businesses, it seems inevitable that we will see short-term nationalization in some industries as well as direct state intervention in newly designated industries of strategic importance. We should also prepare for changes to the taxation system as governments look to recoup some of their recent outlay and rebalance the books in the medium term.

3. Use technology to augment, not replace, people

Technology is making history during this crisis by enabling us to rethink the ways in which we perform fundamental activities. Stock exchanges are still operating even though their physical trading floors are closed. The UK is on its way to establishing a virtual Parliament. Contact centers around the world are switching to remote ways of working, with some making use of artificial intelligence to maintain expected levels of customer service. While we have long had a strong culture at flexibility and remote working at EY, we flexed further and have over 300,000 people across 150 countries working from home.

All these developments are impressive, but many of the technologies and tools in which are all having a crash course in – such as Microsoft Teams or Zoom – all have the ability to enable us to do far more. Many businesses’ default positions are to use technology to replace, rather than to integrate with the workforce. This period is an opportunity for business leaders to explore how we can make greater use of technology to augment people so that we achieve productivity gains, improve the working lives of our employees, deliver better products and services to our customers and help drive higher economic growth.

4. Embrace the cultural and behavioral shifts COVID-19 introduced

For many, the global pandemic exposed weaknesses and rendered many traditional strengths irrelevant. Technology has been the common denominator to most organizations’ resilience amid the crisis. It has also helped drive significant cultural shifts – such as people working from home and connecting with colleagues via videoconferencing platforms and collaboration tools.

While online sales and services were already growing rapidly in many countries, the pandemic has catapulted online retail into overdrive. More than just food and home remedies, demand for services ranging from training courses and entertainment have all increased. Organizations have a valuable opportunity to capitalize on the significant behavioral and cultural shifts of the past few weeks so that they carry across into a non-COVID world.

This might mean developing omni-channel business models that combine digital and face-to-face offerings. The move to shift infrastructure from traditional data centers to cloud and hybrid cloud is already showing signs of acceleration. Many businesses are already re-thinking how to introduce greater virtualization into many aspects of the business, such as learning, while also modeling a far higher levels of remote working than before with the knock-on impact on the real estate and carbon footprint of the business.

Getting ready for what comes next

Although the majority of countries and businesses are still very much in the crisis management phase of COVID-19, some businesses are already exploring how they can set themselves up on the right trajectory for growth as they come out the other side. While prioritizing the well-being of staff and business continuity, they are reviewing whether their strategies remain fit for purpose. This entails considering which course corrections they need to make given technological advances, evolving customer and employee behaviors, the need for organizational agility and supply chain resilience, and the expanded role of the state.

The world is still in chaos right now. What’s more, this chaos has sparked a major social, economic and technological transformation that is playing out before our eyes. Clearly, we won’t revert back to our old ways of living, working or doing business once the worst of the crisis has passed. Tomorrow is certain to be very different – which is why we must start reframing the future today.

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Summary

Organizations have naturally been focused on what they need to do to withstand the current crisis. But sooner or later, the outbreak will end. Organizations can prepare for the post-pandemic future now by devising a lockdown exit strategy; accounting for the changing role of the state; using technology to replace, not augment, people; and embracing the cultural and behavioral shifts induced by COVID-19.

About this article

By

Andy Baldwin

EY Global Managing Partner – Client Service

Passionate about innovation, FinTech, inclusive growth and geopolitics. Leading media commentator on financial services, economics and investment trends. Keen cyclist.

Related topics COVID-19