The COVID-19 crisis has crippled many companies, but others are thriving as they adapt and innovate. Some examples of this innovation are obvious – mask and sanitizer producers along with the huge expansion in home delivery services. But how can the myriad other companies survive the crisis? Better yet, how can these businesses adapt to ensure both short- and long-term success?
Crisis breeds innovation and opportunity
Large-scale events such as recessions and pandemics have often changed our world. In the 1300s, the plague began the dismantling of Europe’s feudal system. In the 1600s, a recession caused by the Second Hundred Years War between England and France started a wave of innovation that transformed agricultural productivity 1 .
World War 2 saw many American manufacturing companies switch from their core business to completely new products – some of them building new factories from scratch and re-training their workers. Frigidaire switched from refrigerators to machine guns. Lingerie factories made camouflage materials and vacuum cleaner parts were turned into gas masks 2 . The war also ignited an age of invention that included computers, jet engines, the transistor and super glue 3 . More recently, the 9/11 terrorist attacks also changed society, creating permanently higher levels of airport screening and surveillance – annoying and some would say intrusive activities that we all now take for granted 4 .
The clear impact of COVID-19
It’s not surprising that the COVID-19 pandemic has quickly changed the way businesses are operating across the globe. Of course, some businesses are simply more prone to the devastating effects of the coronavirus, such as those in the performance and arts sectors. The hospitality and travel industries are also struggling to survive as people cancel their vacations, stop going to bars and restaurants, and simply stay at home 5 . The result? A staggering number of airlines, travel companies and restaurants are engaging in unprecedented furloughs and layoffs 6 .
As COVID-19 rages on, it is also leaving a recession in its wake, compounding the problem. But recessions haven’t always been bad for all businesses in the long term. In fact, they have resulted in some of the most well-known brands around. Without the Great Depression, we wouldn’t have GE, Disney or HP, all of which adapted – instead of halting – their marketing strategies. The Great Recession at the start of this century was also the beginning of our truly digital world, and saw the introduction of companies such as Airbnb and Uber, who filled new gaps in the market 7 . And the 2002-2004 SARS pandemic saw the rise of a little company we all know as Alibaba 1 .
Companies have already started to innovate
Innovation is often a response to an immediate and concrete problem. In the case of COVID-19, it quickly became clear that the world had developed an unprecedented need for materials such as ventilators and Personal Protection Equipment (PPE) as quickly as possible 2 . At the same time, there were countless examples of production facilities that stopped operating due to a sudden decrease in demand, leaving these companies and their employees at risk of furloughs or worse. So they quickly retrained employees to make materials such as PPE in their otherwise silent factories 3 .
Certain companies are thriving now
What types of companies are thriving in our COVID-19 world? Those that help people engage in social distancing and assist health care services, cleaning service companies, and home delivery and meal preparation services. And with home cooking on the rise, most supermarkets that engage in consistent social distancing measures are thriving. When restaurants are shuttered, many liquor and wine stores find it hard to keep up with demand 8 .
How can other companies survive?
But what about the million other types of companies? How are they to survive the crisis? The McKinsey group recently identified four strategic areas that all companies can focus on 9 . First, they must look for ways to recover revenue…fast. This can involve everything from targeted campaigns that win back loyal customers, to an increased focus on health and safety. This implies a start-up, action-oriented mindset. Second, they need to redesign their operations and supply chains to incorporate the increasing trend towards supply chain regionalization. Third, they need to refocus on their identity, with a true commitment to the social contract. Fourth, they need to adopt a truly agile digitalization structure that incorporates the Internet of Things and AI to react quickly to sudden and even regionally clustered changes. Companies also need to think in both the short- and long-term.
In the short term, there are a variety of actions companies can take 10 . Perhaps the most noticeable change is the increased need for doorstep delivery. Many businesses are creating their own online opportunities, by updating their website and social media presence and actually offering new services, such as a gym that now offers online workout tuition, or a retail store that offers webinars and tutorials. In China, where the outbreak started, the Hangzhou Intime department store quickly teamed up with the Alibaba Group for a social marketing livestream event that maintained sales levels 11 .
And even though we are in a global marketplace, local connections are key, as different areas and markets wax and wane according to shifting regulations and laws.
Long-term strategies for success
Companies who want to turn their short-term, pandemic-driven innovations into long-term profit should focus on four areas 3 . The first is obvious: Does the innovation actually solve a long-term problem? If a company has switched to making ventilators, the answer is probably no. If a company has come up with an amazing and vastly improved way to track health care, the answer is probably yes. Second, what is the long-term market, and is it customer-centered? In other words, are your potential customers likely to be passionate about your innovation, and will there be enough of them after the crisis has passed? If the answer to this is no, then the third step might be to pivot – adapt your service or product for another purpose or market. And fourth, you need to map your business model. During this crisis, many companies are delivering products or services at cost, or even at a cost. Ultimately, companies need a way to monetize their approach.
A changing approach toward employees
Businesses that thrive may also have to radically adjust the way they think about their employees 12 . Remote working has been possible for years, but it took COVID-19 for this approach to become ‘normal.’ The advantages are clear – less commuting time and lower office space costs – and easy to achieve. But there are still growing pains. For instance, too many managers are holding more meetings than ever in an attempt to make sure their people are still working. This ‘attendance’ model is likely outdated, and must move to an ‘output’ model that assesses employee effectiveness by their ability to get the job done. Companies must maintain motivation among their work-from-home employees and make it easy for them to telecommute 10 .
How can companies thrive post-coronavirus?
The types of companies most likely to thrive in a post-coronavirus world can perhaps be described as having six key traits 13 . First, they will provide their employees with schedule flexibility. Some employees work well in an office environment, while others can often be much more productive working from home. Second, they will have an expanded online presence with a clear digital marketing strategy. Third, they will take an approach to cash flow that accepts the need to cut costs but also the need to inject cash into new investments. Fourth, they will be alert for – and ready to capitalize on – new opportunities. For example, a retail outlet may incorporate fashionable face masks for sale during peak flu seasons. Many times, new opportunities can also come from previous projects that have been ignored. Fifth, they will have an agile business model with radically shortened marketing and sales cycles. And sixth, they will embrace digital transformation to remove impediments to remote working and collaboration, an online and social media presence, and customer interactions.
A new normal?
Across the globe, people are anticipating a return to a ‘new normal.’ But we may never go back to ‘normal’ at all. Companies who want to thrive in the post-COVID-19 world therefore need to remain responsive to change by meeting unpredictability head-on. They must invest in alternative approaches to working and create agile and adaptable business models to ensure that the markets they have now will remain viable in the years to come.
Stephen Johnston is a professional business writer who has decades of experience working with a variety of international clients across Europe and the Middle East. His expertise ranges through virtually all business areas, including consulting, banking, logistics and corporate journalism. He holds an MA in Psychology from Carleton and McGill University.
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