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Five reasons why your business will miss out on post COVID-19 opportunities
4 June 2020
By Oliver Wight Partner, Stuart Harman
As countries, economies, communities and companies continue to work through the COVID-19 pandemic, thoughts are beginning to turn to what the post-coronavirus environment might look like and what the path there will be.
Whilst it is uncertain what the ‘new normal', as many commentators are describing the post COVID-19 landscape, will look like, one certainty is that it will provide a myriad of opportunities for the ‘right’ companies and individuals.
So, who do we mean by the ‘right’ companies? Those that are READY and those that are LUCKY. While the scale of the global disruption caused by COVID-19 is unprecedented, it is by no means the first crisis of recent years. Unfortunately, however, we are seeing many companies repeat some behaviours that will contribute to them not being READY and missing out on post-pandemic opportunities. These are the top five:
1. Companies have taken their eye off the medium to long-term view
Companies have reduced their planning horizon as they have wrestled with the significant impact and fluctuations caused by the rapidly changing environment. Senior executives have parachuted themselves into the short-term, executional planning processes as they have sought to understand what is happening, to take control and lead their organisations through the crisis. The result is that executives are taking their eye off the medium and long-term view and are not looking out sufficiently far enough to anticipate future change and prepare for it before it happens.
2. Companies are not carrying out effective scenario planning
A recent global survey conducted by Oliver Wight of over 200 medium- to large-sized companies, found that over 30% of organisations have not developed scenarios and contingency plans to respond to issues and opportunities for different potential post-COVID-19 environments.
3. Companies are not developing scenarios for the CRITICAL things
No organisation has the resources available to develop scenario plans for everything. So even for the 60% of companies that do claim to be scenario planning, it is essential their contingency action planning efforts are focused on the CRITICAL UNCERTAINTIES. These are potential future situations that will have the biggest impact on the success of the organisation going forward and that have a high degree of uncertainty associated with them. Of course, if something has high impact and is reasonably certain then businesses should be taking action now, not creating contingency plans! Organisational and personal biases can get in the way of imagining a future where the ‘unthinkable happens’. Senior executives must therefore create a ‘safe environment’ for imagining the full range of potential future landscapes. If you don't imagine it then you can never get ready for it.
4. Companies that are scenario planning are not creating and operationalising robust contingency action plans to deal with the scenarios eventuating
It is one thing to create scenarios and contingency plans but in our conversations with multiple organisations over the past six weeks, we are seeing a lack of linkage of the scenario and contingency planning activities to the operational plans of the business. If these are developed in isolation and not integrated into the monthly, weekly and daily planning processes of the organisation, as part of a planning process such as S&OP/Integrated Business Planning and Integrated Tactical Planning, then there will be multiple impacts on the business. Lead times to act will not be understood, ownership of actions will be unclear, and resourcing will become a scramble. In summary, when the time comes to execute the contingency plan, no one will be ready.
5. Companies are not identifying the indicators that will tell them that a specific scenario is now the most likely outcome, and defining the trigger points for taking action
Looking for the indicators that a scenario is most likely to eventuate and defining the triggers for action to be taken when it does, is essential, but without a defined process for this to occur, our experience is that it simply doesn't. Who will define, look for, and capture indicators that sign-post the future? Who will collate these indicators into information that executives can use for decision making? How will decisions to take action be triggered? Who will make the decision? How will new insights be fed into the Scenario and Contingency Action planning process and what will you do with them? These processes must be clearly defined.
So, what about the LUCKY companies? We all know stories of people and organisations that were in the right place at the right time and were able to take advantage as a great opportunity ‘fell into their lap’, but the odds of this are low. I prefer to look at luck through the eyes of legendary South African golfer Gary Player who said, "The harder you work, the luckier you get".
An organisation that has developed a contingency action plan that is understood by all, has been resourced, practiced and refined, and is ready to deploy into ‘business as usual’ will beat an organisation with no plan, or a plan that hasn't been practiced, 99 times out of 100. How hard is your organisation working on being READY TO RESPOND to whatever the future looks like?