Employees, customers, and a path to “the new normal” top the list of C-suite executive concerns. Here are a few pointers from Constellation’s Post-Pandemic Playbook.
First, let’s acknowledge some realities here in the early weeks of the COVID-19 crisis in North America. Personal and family safety are obviously at the forefront of everyone’s mind. Some heroes, like our healthcare and public safety workers, selflessly put even these concerns aside in order to do their jobs. Also deserving of acknowledgment are those working in pharmacies, grocery stores, warehouses and other places where people interact and where there’s no option to work from home.
Second, let’s admit that it’s hard to generalize about what some now euphemistically call “the new normal” for business. The airline and hospitality industries and businesses deemed to be “non-essential” are in near or total shutdown mode. Those in health and public safety, the food supply chain and anything tech related to supporting remote workers are scrambling to keep up with demand.
In an open virtual discussion with more than 40 CXOs last week, Constellation Research heard a broad range of short-term and long-term concerns and opinions. Chatham House rules applied to the meeting prevent us from sharing the identities or affiliations of the speakers, but here’s a sampling of what these CXO had to say.
Learn from Work-from-Home Successes
Several executives agreed that work-from-home (WFH) productivity is going surprisingly well, so much so that some speculated that many companies may reassess their WFH policies and real estate commitments once the crisis is over. Benefits mentioned included the ability to hire prized talent and workers from outside of Silicon Valley, New York and other competitive job markets.
One exec noted that his firm had previously learned the hard way that mixing remote and local workers on a team does not work well when most of the team members were in one physical location. The remote minority inevitably feel like outsiders and cannot participate as equals. His firm solved this problem by having all team members join meetings virtually, even if half or more of those team members are in a single location. This levels the playing field and ensures equal access to information and ability to participate. This is a policy that businesses should consider as the crisis wanes and the mix of remote and office workers starts to get back to normal. Some employees will feel comfortable returning to offices sooner than others.
Note: Still struggling to support work-from-home requirements? Check out this Webinar by Dion Hinchcliffe on productivity, collaboration and remote work technologies and best practices.
Set Short-Term Plans & Keep Monitoring
Whether your business is struggling to keep up with new demands or struggling to survive, you can throw out the budgets and business plans originally developed for 2020. Historical data and existing models may have little predictive value for the time being. Agile analysis and planning based on the very latest data is the name of the game.
Even supermarkets and hardware stores, which have remained open nationwide throughout the crisis, are seeing dramatically different customer behavior and buying patterns. One CPG executive we spoke to shared that his company has narrowed its product assortment to best sellers, and it can’t make enough of some of these products.
Other businesses are not so fortunate and have been completely shut down. Experts expect an eight-week crisis cycle to roll across North America as population centers go from the first 1,000 confirmed cases of COVID-19 to a tapering of new cases and an easing of the danger of local healthcare systems operating over capacity. The easing of shelter-in-place directives and business closures will depend on case numbers, availability of testing and other, yet-to-be-determined criteria.
To support an agile, data-driven approach, take these steps:
- Know your data sources, particularly those providing leading indicators of demand
- Ensure timely access to the latest information and monitor actual data-access and usage patterns rather than relying on old assumptions about the data that the business relies upon.
- Break down departmental silos. Information found to be useful to one group may have equal or greater value in another context. Recognize interconnected requirements and outcomes.
- Embrace continuous planning. Keep monitoring customer interactions and digital behaviors, sales, procurement, inventories, accounts receivables, cash flow. Patterns are likely to change from week to week.
Yes, historical patterns, such as seasonality, will continue to shape behavior, but the new normal has yet to emerge and customer behavior will take time to stabilize and become more predictable.
Prepare for Longer-Term Opportunities
One CIO said he’s seeing “crash” teams established within companies focused on three questions: How do we survive (addressed above), do we need a strategic reset, and how to we get back to growth once the crisis eases?
On the strategic reset question, Constellation expects that many companies will reassess secondary business models and commitments to non-core product lines and markets. Constellation expects to see a wave of asset sales, mergers, and acquisitions. Companies that are saddled with debt and those in bankruptcy will lead the asset sales and become takeover targets. Today’s Fortune 500 maybe thinned to a Fortune 350.
Companies that are flush with cash will be in a good position to pursue acquisitions, but if they don’t act quickly, they themselves will become acquisition targets. Fast financial analyses and accurate assessments of market prospects will be crucial. M&A is often a secretive endeavor, carried out by bankers, lawyers and top-level executives. Do not enter deal rooms with piecemeal data or half-baked assumptions about your own firm’s performance, its ability to effectively acquire or the prospects of an acquisition target.
As for that third question on how we get back to growth, “that's kind of the Golden piece of information that every business is looking for,” said the CIO. “A few of the CEOs that I’ve talked to are saying, ‘it’s not like we’re just going to turn the switch back on and , boom, everybody’s going to come back to work and customers are going to show up again.’ They’re saying it’s going to be more of a gradual, testing process."
Constellation founder R “Ray” Wang advised that “it’s very hard to put a timeline together without understanding when the crisis is going to end. We are looking at four factors: time, industry, geography, and the spread of the virus. We think it starts to get to recovery when you have seven days of no new cases [in a particular geography] and you know you’re on the other side of the exponential growth curves we’ve all been staring at.”