As COVID hit earlier this year companies in India and around the world swung into crisis management mode. They took immediate actions to protect employees, support customers, ensure business continuity, and stabilise cash flows. As the lockdown eased but cases continued to grow, companies focused on safe reopening for customers and employees wherever possible, while managing continued work from home for most.
Today, with COVID-19 showing little sign of abating and a potential vaccine still some way off, leaders have entered a second phase of adapting their day-to-day business operations to the reality of the virus at the same time as trying to figure out changing customer needs. While every business needs to take these necessary steps to cross the chasm created by COVID, leaders must recognise that short-term fixes are not sufficient to advance in the longer-term.
In our conversations with CEOs, this is a challenge that is widely recognised. However, the dilemma of many leaders is how to dedicate the necessary time and resources to areas which they know will determine future leadership position in their industry, without taking their eye off the near-term requirements that will keep them afloat. This challenge is akin to scanning the horizon to find the next waypoint while also keeping your eye on the fuel gauge to ensure there is enough in the tank to get there.
Through our work with companies navigating this challenge, we have identified five imperatives that can help balance the needs of near-term survival with working on the game-changing moves that will define success or failure in the longer-run.
The dynamic nature of the current crisis acts as a constant pull on management attention and company resources to fight the latest fires. As a result, important longer-term thinking is usually sacrificed to urgent near-term actions. To create a more balanced outlook leaders need to become bifocal. This can be achieved by identifying both near term priorities and longer-term objectives and training the management muscles to constantly shift between the two. We define this far-sighted field of view as peripheral vision and leaders can strengthen it through identifying metrics that track emerging trends, closely monitoring them, and incorporating into decision-making.
As well as dedicating adequate management attention to both near and longer-term horizons, businesses must also ensure they align resource allocation appropriately - including financial and human resources. Companies have been able to achieve this by transitioning from crisis response teams to an appropriately staffed COVID-19 Steering Group. This provides a dedicated platform to frame critical issues confronting the business, model different scenarios, design roadmaps, and build progress tracking mechanisms to monitor during the crisis.
Track shifting dimensions of demand
Although change is certain, the dimensions of change are not. Therefore, businesses need to carefully track shifts in the shape and size of demand. The pandemic has triggered some dramatic short-term swings in demand for a variety of products and services such as surging need for personal protective equipment (PPE) and a collapse in air travel. However, the priority for businesses should now switch to evaluating which of these shifts will be permanent and which will revert to pre-crisis norms.
For example, face masks have become an almost universal accessory to daily life but consumer demand for face shields has gradually waned. Similarly, weddings in India have traditionally been a huge driver of consumption of everything from apparel to automotive, but the smaller gatherings required during the pandemic have seen expenditure shrink dramatically this year. Although increased demand for online matrimony services indicates there is no drop in the number of people looking to get married, companies that rely on such occasion-driven consumption will need to carefully track if this year's smaller and cheaper weddings are here to stay.
Monitor your industry's landscape
The consequences of the current crisis on the structure and competitive dynamics of many industries could be profound. Already, the failure of weaker players is creating opportunities for stronger firms to seize a greater share through mergers and acquisitions. For example, Reliance Industries has transformed the playing field in both retail and consumer products through its acquisition of Future Group, and a potential tie-up between TATA and Wal-Mart could further consolidate online-to-offline retail. Meanwhile, nimbler new entrants are making disruptive moves to transform the basis of competitive advantage - often by leveraging their digital-first status in areas like fintech, edtech, and healthtech. Even large Public Sector Undertakings (PSUs) like Indian Oil Corporation are preparing for major shifts in energy demand by seeing their retail forecourts as energy stations rather than petrol stations and looking to petrochemicals rather than oil to drive the bottom-line. Therefore, leaders need to closely monitor their industry landscape for shifts that may alter the key factors for success.
Make digital integral
The sudden boom in home working and the acceleration of online shopping brought about by the pandemic has led many companies to make rapid investment in digital capabilities such as e-commerce portals, video conferencing solutions, and cloud-based collaboration tools. However, long-term success will not be determined by ad-hoc adoption of digital technologies but, by well thought through transformation which considers all aspects of digital's impact on the business.
Leaders can make smarter decisions about digital by first looking at it through a business rather than a technology lens - which prompts questions such as how does digital create new opportunities and threats? And how should we adapt our business model to meet them?
Companies can then prioritise among the huge number of potential digital initiatives by both looking outside at the opportunities and threats while measuring their internal capabilities to identify where opportunities and strengths align. With a vision of what digital can achieve and a clear-eyed assessment of where they currently stand, leaders can develop a digital transformation roadmap that ensures sustained progress toward a new source of long-term competitive advantage.
Organise for the future
The dramatic changes brought about by large-scale remote working and digital collaboration have created an opportunity to turbocharge organisational transformation and build more resilient, agile, and performance-oriented teams. For many years the long-overdue need for cultural change at Indian corporates succumbed to the old ways of doing things. However, the current moment of flux gives leaders an opportunity to implement new ways of working before a new set of habits become ingrained.
In particular, it offers a chance to break the traditional hierarchical model by adopting the kind of fluid structures that have proved so much more effective at promoting collaboration and adaptation during the crisis. Furthermore, now is the ideal moment to move away from outdated annual performance reviews and adopt continuous appraisal and recognition that rewards and elevates according to performance rather than tenure.
By balancing focus between the long and short-term, acting on changes in the dimensions of demand, closely monitoring shifts in the industry landscape, making digital transformation a priority, and seizing the opportunity to organise for the future, leaders can act to ensure short-term survival while advancing toward a winning position in the post-COVID world.