The impact of COVID-19 on individual businesses is unprecedented, unpredictable, and to a large degree dependent on each company’s ability to handle the crisis. While there are a few businesses (such as manufacturers of respiratory equipment or providers of remote working technology) which are actually enjoying an upturn right now, most companies find themselves in full crisis mode.
Managing the short-term effects of the crisis is of course critically important. For example, companies need to ensure that their people are safe, that their supply chains remain relatively intact, and that they manage their financial liquidity in an efficient way. However, companies also need to start thinking about what the new normal is going to look like, and how they can position themselves to succeed over the long term. The goal should not just be to float with the tide, but to design a winning strategy. That strategy will in all probability need to undergo significant change, as it should reflect both the company’s resilience and the new market environment in the wake of the COVID-19 outbreak.
The new normal after COVID-19 will be very different from what we were familiar with before the crisis. Change for companies won’t simply entail replacing some business travel with continued virtual teamworking. In order to make businesses more competitive in the post-COVID world, many business models and strategies will need to be challenged and potentially overhauled. Companies should first consider the following questions:
The COVID-19 pandemic is going to accelerate some of the trends we have observed for some time, while changing the direction of travel in other areas. Understanding the new normal will mean breaking with many preconceived notions, and keeping an open mind in response to fresh ideas.
How can you prepare your company to be ready for the new normal? While every company’s situation is different and therefore demands a unique response, it is helpful to think of business archetypes. These archetypes are clusters of businesses that share common attributes and are expected to come through and recover from the crisis in largely similar ways. This structured thinking can give companies a good sense of what is required so that they can develop an appropriate strategy.
We have identified seven such archetypes. We have assessed how businesses in each archetype will fare at the peak of the crisis, how they are likely to progress during their industry’s recovery period, and what they may need to do to return to growth.
The key to being one step ahead of your competition – relevant for all business archetypes – is to take action that is countercyclical. Instead of slamming on all brakes, companies will need to strike a balance between restructuring and making selective investments with regard to management time, brainpower, or indeed, financial resources. The crisis may actually open up unforeseen opportunities to recruit new talent that is now flooding the job market, or acquire the technologies needed to thrive in the new normal. If companies get themselves ahead of the competition in preparing for the new normal, they will find themselves in a winning position once the overall economic picture starts to look brighter.
I would encourage you to invest this thinking time now. Assess where your business stands, which archetype it is most closely aligned with, and how it is likely to progress during the crisis and into the new normal. You can influence that progression, and your future in the post-crisis world, by defining and executing a strategy tailored to your unique situation.
Carina von Heimendahl has also contributed to this article.