Business Strategy in the Time of the Coronavirus
by Betsy Burton
I have been thinking a lot about what we should be doing to ensure we are investing our time in the right activities during this pandemic. It is very understandable that many businesses, governments, and individuals are primarily focused on responding to immediate demands and threats as a result of the coronavirus. It is important that we respond to these immediate challenges, especially in terms of individuals’ health and wellbeing.
In addition, it is also critical that businesses, governments, and individuals step back and dedicate some time to assessing their longer-term goals, plans, and operations to ensure they are considering all the aspects that could affect their business and lives. Taking this time will also ensure that actions being taken today contribute to—or at least don’t damage—their ability to support their business, customers, and partners in the future.
To help guide organizations in this effort, we have recently released a note that discusses six key strategic planning activities people, businesses, and governments must all engage in over the next few days and weeks in order to prepare for this new normal (COVID-19 Action: Define Your Business Goals and Strategy, Now).
The New Normal Requires New Strategy
As of Monday, March 30, 2020, it is estimated that 283 million people in the US (more than 80% of the population) are either being urged or ordered to stay at home. These efforts are being put in place to slow down the spread of coronavirus contagion and reduce the risk of overwhelming the medical services system.
We will come through this event. And, we will come through it changed; there will be new behaviors, habits, beliefs, and fears that will have a lasting impact on our culture and business landscape.
Now is the time to start planning for this new normal. Individuals and small businesses should allocate one day a month to plan. Medium to large organizations should assign a small task force to work on strategic planning as an ongoing effort with regular meetings and research.
If there is one thing we have learned from this pandemic, it’s that planning upfront can have a huge impact on how well we can respond to change.
Start With Scenario Planning and Move to Business Planning
The first thing organizations need to do is understand what they believe the future-state of their economy, industry, business, region, and culture will be during and post-pandemic. In our recent research note, we outline several ways of doing this scenario planning. For your scenario planning process, use reliable external resources and research; be sure to also conduct research with partners, customers, and employees.
Make sure to document future scenarios as well as assumptions and evidence to serve as signposts that one scenario or another is more likely. Most organizations will find it enough to think in terms of a one, three, and five-year planning horizon, given the degree of change happening.
Then use this scenario planning to clearly define your business objectives, goals, and strategy. Ensure your business strategy is actionable and reflects the most likely scenarios. Then you can start to define business models and outcomes.
Future-State Planning First, Not Current-State First
A critical aspect of all this planning is to focus on the future-state first based on your scenario planning. Don’t start with your existing business strategy or your existing business model and metrics. I know… I know… It seems counter to common thinking. But it is important to chart out your vision and strategy based on the new reality (threats and opportunities) rather than the past.
Organizations can then compare the future-state focused business strategy and models with the past business strategy and models and make adjustments as needed. Starting with the current-state strategy, models, and operations is like driving a car by looking in the rear-view mirror. It is only good if you are backing up.
Last, it is critical for businesses, governments, and individual families to communicate their plans. Create a simple way of communicating the possible future and what you are going to do to help face these challenges.
The more you communicate that you have thought about the impact, put actions in motion, and continue to monitor for further change, the more you build the support and confidence of your employees, customers, investors, and partners.
To paraphrase Winston Churchill, we must not let a crisis go to waste.
We must take this opportunity to respond to immediate demands, while also ensuring that we understand the possible future-state and proactively plan for how we will operate, if not thrive, in that future-state.
Organizations that do not focus some time on planning for the future put the survival of their business at risk. Organizations that thoughtfully plan today with an eye on the future-state will be more prepared for the post-pandemic new normal. Coronavirus threatens many aspects of the enterprise; it will take sound business strategy and effective scenario planning to meet these threats head-on.