The COVID-19 crisis has impacted businesses worldwide. Globally, governments have put economies on pause, and businesses have shuttered their doors to try and limit the virus’ spread. Factories have idled, and customers have sheltered in place as the world weathers the storm. Whether or not this strict response was necessary, or an overreaction, is a side debate – it happened. As we move from the frenetic pace of survival into recovery, businesses now need to seize the opportunity that has been presented.
Deloitte Canada’s recent September 2020 Economic Outlook noted that Canada’s economic activity is not expected to fully recover to pre-pandemic levels until the second half of 2021. Businesses still operating have withstood the immediate shock to revenues and survived the initial downturn; now they need to leverage this recovery period and set the foundations for future growth.
There are 5 key reasons outlined within this article as to why businesses need to invest now in refreshing their growth strategy:
- To convert crisis urgency into future momentum
- To gain first-mover advantage on emerging trends
- To adapt to a technology-focused market
- To take advantage of the robust talent pool
- To build resiliency into their strategy
By heeding to these reasons and acting to refresh growth strategy, businesses can position themselves for success in the recovery and post-pandemic world. They will better understand their customers’ problems and what they as a business can do to solve them, thus working towards increasing market share, entering new markets, and growing revenues.
Convert crisis urgency into future momentum
Take the momentum, energy, and urgency that was put into business survival during the pandemic, and use it to grow as we move forward out of the pandemic.
To date, businesses have focused on surviving. Temporary solutions and workarounds have been put in place, enabling businesses to operate and serve customers as best as possible. These changes range from building out remote working capabilities and increasing the capacity to serve customers digitally to offering socially distanced curbside pickup and do-it-yourself restaurant meals at home – all implemented to enable ongoing business operation.
While previously, companies may have held back on the spending required to push into further digitization, upgrade internal operations, expand their product offering, or move into new markets, the pandemic has forced companies to pivot and do just this to maintain revenues, decrease costs, and survive.
This pivot has now reached a crucial juncture, where firms can either fail, survive, or thrive. Some businesses will reduce momentum from the frenzied pace of change with which they scrambled to revamp operations in the early stages of the pandemic and return to a more normal ‘business as usual’ pace. Opportunities exist, however, for other businesses that choose instead to capitalize on the current changing landscape and internal momentum of change already in place.
One of the major issues with change is few people like it – staff are wary of it, and the effort involved is high for management. During this pandemic, however, everyone understands its necessity and major changes are already underway. This momentum is what businesses should continue not just to preserve but also build on, setting themselves up for future growth as they consider longer-lasting, structural reforms, investments, and changes to ways of working to better address growth in the post-pandemic world.
This decision is not one that can be made on the fly. It can potentially lead to significant investment requirements and major changes to operations. However, the upside is significant. Organizations can use this time, when the economy is still weak and most are focused on returning to normal, to continue pushing their evolution and adapting to better fit in the new post-pandemic marketplace. In so doing, they can potentially leapfrog competitors as they do so.
Gain first-mover advantage on emerging trends
The world has changed because of the pandemic. Be the first in your industry to recognize trends and capitalize on them.
The pandemic has altered society across the board, serving to speed up some trends, such as the uptake of new technology and digitization, and introduce other trends and themes, like the explosion in remote working. These trends present valuable opportunities to those organizations that can capitalize on them.
To take advantage of emerging trends, businesses must consider changes at a macro level and from a strategic, future-oriented point of view. Consider the fall in retail foot traffic, the increase in e-commerce, and the increase in remote working. Affected organizations must consider these behavioural changes and form an opinion on what changes and trends are temporary, what are permanent, and what will continue evolving as time progresses. A July 2020 McKinsey Global Survey of executives revealed 62% believe that the changing customer needs and expectations caused by the pandemic will remain into the future. Importantly, this does not mean that every single change brought on by the pandemic will remain. However, it highlights that an analysis needs to be conducted by organizations as they consider how they will operate in the future.
As an example, consider the impact of COVID-19 on the insurance industry. A survey of 2,500 insurance customers, commissioned recently by Ipsos, gives insight into this impact. It shows rising consumer interest in life and health insurance products, with access to virtual healthcare services seen as more important to consumers than cash payouts. This highlights consumers’ changing needs and the various ways insurance providers can pivot to meet these needs. Importantly, when viewed holistically with other trends, such as the increased demand for digital sales channels, it can guide decision-making by insurers on what products they offer and how they offer them. Insurers, and businesses more broadly, have an opportunity to capitalize on trends. However, if they wish to do so, they need to move early and move fast.
The pandemic has reset entire industries. The early bird gets the worm, or in this case, increased market share and associated profits. The loser continues treading water.
Adapt to a technology-focused market
Technology and increasing digitization were existing broad themes across the world economy. The pandemic has provided a surge in these trends, and businesses need to continue pushing in this area.
Technological advances over the past 20 – 30 – 40+ years have led to a continually evolving world. COVID-19 is only serving to speed up and reinforce these trends. Whether it is technology stocks pulling the stock market higher, consumers accelerating their switch to digital shopping channels, or staff needing to work from home as travel comes to a standstill, the signs of the technological revolution are everywhere. Comparisons of results from the July 2020 McKinsey survey with past years’ surveys showed that, on average, businesses have accelerated the digitization of most aspects of their organizations by 3-4 years. In North America, the average share of digital customer interactions has jumped to 65%, from 25% in May 2018. Organizations need to effectively address this trend, identifying how they can capture and exploit the benefits of technology to adapt and improve the way they do business. Whether it is insurance providers moving to digital policy offerings, or banks moving to scale technological offerings to substitute in-person branch visits, businesses need to consider how technology can help them grow.
According to BCG’s Digital Strategy Roadmap 2020 Global Study, prior to the pandemic, approximately 50% of companies were “prioritizing digital transformations.” However, the number currently sits at over 80% of companies indicating that “accelerating their digital transformation is a strategic necessity.” Technology is not an undiscovered opportunity; businesses need to act quickly to get the most significant benefit possible. Digitization can be the equalizer – levelling the playing field between competitors of varying sizes and opening new markets for organizations to capture. As leadership considers future growth, proper care and consideration needs to be given to ensuring businesses take advantage of technology as it becomes more and more the backbone of how businesses operate and serve their customers. Technology must enable strategy and provide a strong platform to support a digital workforce and customer base.
Take advantage of the robust talent pool
Due to pandemic job cuts, the number of highly skilled individuals looking for work is high. Organizations can capitalize on this, recruiting resources to upgrade their talent and build new internal capabilities.
The pandemic has led to job cuts across all industries. In Canada, according to Statistics Canada, the unemployment rate peaked at 13.7% in May 2020. It has been steadily falling back since then. While devastating, this situation does provide a silver lining. Businesses have an opportunity to recruit outstanding talent. The talent pool of those looking for work, if it can be thought of that way, has not been this high in more than four decades of recording comparable data.
As organizations consider how to move forward and how they pivot to growth, they should give thought to the capabilities and skillsets required. New areas of growth mean new capabilities are required within organizations, and the pandemic has provided an excellent opportunity to hire and build these internal capabilities. Now is when businesses can make bold decisions, informed by their refreshed, clearly defined growth strategy.
Build resiliency into your growth strategy
Businesses have seen how unexpected shocks can affect their industry and competitiveness. When they look to the future, they must put an agile strategy in place that allows them to pivot as unexpected situations arise.
If anything has been demonstrated by this pandemic, from an economic standpoint, it is the fragility of global supply chains. We saw this in the early-mid stages of the pandemic; China, the world’s manufacturing hub, shutdown and the effects were felt by business globally. While global supply chains do not impact every business, all companies must note the underlying message. Businesses cannot afford to become too reliant on any one supplier, customer, process, or third party technological software – anything that could fail through no fault of the business.
The key takeaway for businesses is that resiliency must be built into their strategic planning. Businesses cannot think of every eventuality and cannot always plan away every potential risk. However, it is important to think through the possible risks during strategic planning, enable better preparedness, and build agility into the growth strategy. Building agility into overall strategy enables a business to be flexible and pivot when it needs to, responding quickly to situations as they arise. A company’s ability to iterate, try something, measure results, and adjust, enables it to change operations rapidly when faced with sudden adverse conditions. During this pandemic, technology and the ability to scale and implement quickly was a saving grace for a number of businesses, such as office-based organizations. However, it was not able to save others such as event planners and hospitality-focused businesses. Businesses need to develop an agile strategy and the ability to pivot.
The time is now
Objectively, the world is still in the depths of the pandemic crisis. While some countries have reduced active case numbers, most of the world is still battling a second wave of the virus. Nevertheless, the initial panic and strict economic curbs have subsided, and governments are shifting towards a focus on how to combat the virus while keeping economies active. A new norm is forming that will likely continue for the next few years as we all learn to operate under COVID-19 shaped conditions. As such, now is a crucial time for businesses to assess and refresh their growth strategy. Strategy is an evolution; successful companies are constantly reviewing, evaluating, and tailoring it. Organizations need to capture the momentum they have used to survive and use it as a springboard for growth. By moving to a future growth focus, organizations can identify and capitalize on emerging trends, gaining first-mover advantage on trends such as the uptake of technology and digitization of business worldwide. To achieve this, organizations may be required to build-out existing internal capabilities and talent. The pandemic has gifted a silver lining: a full talent pool of candidates. Combining all this with a focus on resiliency and an ability to pivot and be agile with business strategy and operations, businesses could exit this pandemic in a stronger position than they entered, ready for growth in the year to come.