The Covid crisis is bad for most of us. How badly it turns out for you will depend entirely on what you have been doing over the past few years and what you do now.
The Covid crisis means big changes
There’s no doubt that the Covid crisis heralds the biggest change to our lives in recent decades. It will impact on every level and if you think you are immune then you are delusional. What’s more many of the changes it brings will be permanent. Things are not going to return to how they were pre-corona.
Because of this we need to reassess our personal philosophies, values, beliefs as well as our business models, the products and services we provide and the way we conduct business generally. And we need to do it quickly.
By and large, digital businesses will fare better in the crisis than businesses that haven’t transformed. There is no doubt there will be many business collapses and unemployment is likely to hit peaks unheard of in recent decades.
Markets won’t just kick-start once the pandemic has passed. The reality of the shut down will include vast sections of our community short of cash, suffering high levels of debt and with new and very different priorities, like keeping a roof over their heads and even maintaining a better work/life balance. People will have cashed their pensions in an effort to stay afloat, never to be able to recoup the losses and unable to support themselves in years to come. Everything changes from now.
The Covid crisis has accelerated digital disruption
Many of the changes brought about by the crisis would have come about anyway. The digital revolution would have seen to that. The problem we have is that the urgency of the situation has forced those businesses that are sufficiently agile to step up the pace. Businesses that have been slow to transform were already being left behind. Now their chances of survival are slim.
Experts and consultants who have been engaged in business transformation in recent times have, of course, been urging business leaders to get moving on their transformation. However, it’s a common complaint of advisers and a sad reflection of the inadequacy of so many senior executives that so little progress has been made.
Businesses have been taking action, but mostly the wrong action. We’ve seen the unbelievable failure of 75-90% of transformations and already many of the businesses concerned have folded as a result. In fact it’s estimated that a third of the businesses we know will disappear within the next two years and 75% of the S&C 500 will have gone in the next decade. All because business leaders have been stuck in a rut and in denial about the realities of digital disruption. Where else in life would performance like this be acceptable? Yet, despite this dismal record we’ve continued to repeat the same fundamentally flawed approach to transformation.
It’s time for a different approach
The stupidity of senior executives who continue to deny the need for transformation is now unquestionable. It’s time for these people to stand aside and allow people who know what they are doing to step up to the plate and take on the challenge of saving the businesses concerned.
Those who have tried and got it wrong so far need to own up, bury their pride and call in real experts. It’s the only way most of these businesses can be saved. As I have already said, it’s time for different approach.
All the experts agree on the reasons for transformation failure and with the corona crisis accelerating the pace of change we need, more than ever, to pay attention and learn from to the mistakes of the past. Here are ten business transformation lessons.
- Business leaders have to understand the difference between change and transformation. Change, or automating existing business models can actually speed up your demise.
- It’s essential for businesses to have a clear objective and maintain focus. Digitising for the sake of it isn’t the answer.
- Business leaders must understand that transformation is not an IT project. Treating it as such means certain failure.
- You must bear in mind that you won’t succeed without the engagement and support of all six of your stakeholder segments – employees, investors, suppliers, distributors, partners and customers. To do this you have to build and manage a brand community.
- Traditional management styles are inappropriate. In businesses that are successful in the digital economy managers and business leaders are facilitators not dictators.
- Businesses won’t succeed unless they are able to generate continuous innovation. This is only possible if you allow stakeholders on every level to contribute. Harness the power of your community.
- Risk-averse businesses don’t innovate and so won’t be able to compete. Success favours the brave.
- Success in the digital economy requires customer focus, but many businesses that think they have this, in reality, don’t. It’s important to deliver what customers really want across the entire experience and not guess or settle for the closest you can get.
- There are far too many specialist skills involved in transformation for any business to have them all in-house. You have to engage external consultant, advisors and technicians.
- You must focus on eliminating silos. Silos create inefficiencies, drain funds and slow progress. This is another reason for a contemporary management model.
Covid crisis first aid
So, what can you do right now to minimise the impact of the current crisis and prepare yourself for the new and very different marketplace that you’ll have to operate within when restrictions are lifted? Here are five thoughts.
- E-mail or message not only all your employees, but all your stakeholders regularly to maintain their engagement
- Get your IT folks to work on providing the technology that facilitates home working. You should have done this already, but it will become a new normal anyway and you need it during this period of isolation.
- Create an on-line forum for your stakeholders. You can produce content specific to each of your stakeholder segments.
- Use your new connectivity to get your management team started on developing the kick-start strategy that will give you a chance of success in the new, post-Corona marketplace. You should engage external advisors in on-line group sessions as soon as possible. They should be more used to on-line working than you are.
- The first step on that journey, as always, will be to create your brand model. This will give you focus and discipline, which is the key to successful transformation.
Share your concerns
If you need help to kick off your recovery I’m offering free on-line consultations over the next few weeks where business leaders can voice their concerns, bounce their ideas off me and generally just get a different, unbiased perspective on their business, their plans and their future.
March 26, 2020