Business reinvention activation:
Embrace new value drivers to unlock post-pandemic growth
The changes organizations have experienced in the last year are permanent. That includes the value drivers that will empower businesses to cultivate a sustainable competitive advantage in a post-pandemic market. The good news is if you’ve already set the wheels in motion to revitalize your business through a focus on transformation, innovation and agility, you may already be ahead of the game on this front.
Why? Even though most companies are now ready — and willing — to transform, the vast majority weren’t prepared for the sheer magnitude and speed of pandemic disruption that defined the last 15 months. Consider examples like the rapid shift away from business attire, which caused even the most established retailers to falter. We’re now living in a market where the inability to pivot quickly can limit a business’s ability to operate at all, let alone survive.
When you understand what’s driving value for your organization, you can take an enterprise-wide approach to creating innovative value propositions and business models, and establish engrained resilience. That generates agile capabilities that enable you to transform, pivot and succeed — no matter what disruptive forces emerge next.
How are value drivers changing because of the pandemic?
Historic drivers like scope (e.g., diversifying a company’s product portfolio), scale (e.g., expanding your production capacity into a new region) and efficiency (e.g., executing work at a lower cost) are now being replaced by a new set of transformative forces. These drivers are radically different from those we’ve relied on in the past, and are essential to creating a competitive edge in the future. They require organizations to be inherently innovative and to take action quickly as disruption is anticipated or occurs. Using the right business framework makes it easier to do that.
Bridging scenario planning — grounded in collective intelligence with focused, actionable and measurable execution plans — begins to cultivate the engrained flexibility you’ll need to adapt as drivers shift. On paper, we call this framework Business Reinvention Activation. In reality, it’s a transformational journey that centres on long-term resilience and adaptable business models that can evolve in line with market changes.
Which key value drivers should businesses embrace now?
- Humans at the centre. Developing your strategies and solutions around customers, employees and communities has never mattered more. What you do must align to the way reality is changing for real people in real time. Connecting the two allows you to deepen customer relationships by showing you understand their needs and can engage authentically on a personalized level. This will enable your brand to differentiate itself from the competition. For one business, that could mean living up to its purpose by designing sustainable products, or sourcing a broader range of ethically made materials. For another, it could mean creating organizational structures that are more inclusive and responsive to different employees’ unique needs. The most important thing is that everything you develop must put people first. This will help you cultivate long-term relationships and brand loyalty to set your organization apart in different economic climates.
- Technology at speed. Major changes used to occur gradually over time. Now, they happen at the same time and with greater speed. Case in point: consider the sudden uptick in e-commerce that ballooned at the start of the pandemic while supply chains were being interrupted locally and globally. You must now be capable of listening to your customers continuously, rolling new technologies out quickly, as well as instantly spotting — and responding to — trends. When you employ technology at speed to achieve this, your organization becomes more capable of effectively seizing market opportunities, like a sudden spike in demand for a certain product category, and enabling the various functions — from supply chain to shipping — to act accordingly. Taking technology out of its silo and embedding it right in the organizational DNA is critical.
- Innovation at scale. Innovation cannot happen in a silo. It must involve cross-functional collaboration that stretches across teams and strategic partnerships. Because when innovation shifts from being a thing you do to a way of operating, you can ideate, test, learn and iterate all the time. That ability enables organizations to respond to relevant market opportunities with agility and speed.
How do you bring this to life? Plan with the end in mind. Where do you want to be? How must you transform internally to position people with the space and permission they need to bring forward ideas, experiment, fail fast, learn from failures and try again? For one team, that might mean employing advanced data analytics to create new products or services for customers. For another, it could look like restructuring the supply chain to make it more resilient should a disruption appear from nowhere. Getting this piece right could mark the difference between chasing the next growth S-curve and leading it.
Keep in mind, not every innovation should be about reinvention. The best innovation strategies are the ones that leverage a portfolio approach using three tiers of initiatives to balance the risks and rewards:
- Protect: Seventy percent of the portfolio should centre on sustaining the value of the core market and protecting the enterprise. Build on your strengths so that you continue to serve your core customers the right way.
- Grow and optimize: Twenty percent of the portfolio should extend existing priorities to new customer segments or markets. Other initiatives can focus on continuously improving what you already do really well by doing it faster, cheaper and better (e.g., introducing automation or advanced analytics to enhance employee experiences).
- Reinvent: Ten percent of the portfolio should be dedicated to thinking well into the future to capture signals of change, reimagine the industry and the role you play, create new markets and launch new value propositions and business models (e.g., transitioning from being a fitness apparel company to becoming a health care business that uses data to help customers lead a healthy lifestyle).
Decision-makers who want to be ready for the next wave of growth need to adopt a transformative mindset and start thinking about value drivers in this new light to come out of the gate swinging. Combining that mindset with a portfolio-driven approach to innovation can help you build on prior success to elevate organizational capabilities and propel growth through the next S-curve and beyond.