The 6 steps you must take now to protect your right to grow post-pandemic

by Abhik Sengupta

Those who have followed our insights on the current circumstances would know that companies are acting through 3 phases of activity. Organizations need to respond keep employees safe and the business running, reconfigure: survive the downturn and position the business for the rebound: where enterprises look to accelerate growth.

With many parts of the world getting ahead of the immediate health threats and easing restrictions, the full economic impact of the crisis is becoming apparent. As a result, organizations are now well and truly into the reconfigure stage. So far, most companies have been compassionate and sensible in their response – doing right by their people. The danger however, as the humanitarian crisis eases and the economic downturn takes center stage, is organizations engaging in a “paint by numbers” cost reduction to protect short-term earnings. The immediacy of this form of cost-out leaves no time to implement and embed the enablers that allow people to work efficiently. More importantly, there is often little consideration of the complex interconnection between formal and informal structures, along with the capabilities needed to sustain performance.

This results in a real risk of damaging the organization’s ability to tap into growth opportunities when the weight of fiscal and monetary stimulus takes hold, and the market inevitably turns.

The next phase of the COVID-19 crisis

The recommended pathway for each organization depends on the level of disruption to their sector and their relative level of omni-channel maturity. 

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Companies in the most challenged “Defend and Diversify” quadrant have probably already started streamlining operations to face-up to their existential crisis. The cost reductions in these organizations must be swift and wide-ranging. Those not as badly impacted, but who are comparatively immature should focus on finding efficiencies in their legacy businesses to immediately “Fast Track Omni-Channel Capabilities”. In the diametrically opposite quadrant, some relatively mature companies, such as banks and wealth managers, need to “Disrupt Selectively” in the face of significant economic headwinds. It is important that they take a portfolio approach to customer segments, ring-fence the service of high-value customers and gain efficiencies from higher-risk segments. For the fortunate few who are considered advantaged and mature, such as online retail, it is less a question of cost reduction, and more about focus and discipline as they “Accelerate Growth Plans”.

Irrespective of the starting position, the common approach involves working back from the ideal experience you are trying to create for your most valuable customers. This allows you to prioritize the capabilities that deliver on those ‘moments that matter’, respect the interrelationships between various functions, direct scarce capital investment into the priority areas and gain sustainable efficiencies from operations that aren’t as critical right now.  

The fulsome methodology

This customer-centric portfolio approach is a six-step process that is easy to articulate but can be challenging to implement. If you can perform these shifts in a rigorous and disciplined way, you will be able to deliver enduring growth.

1. Identify the emergent future value in your customer base – The pandemic has fundamentally changed market dynamics and customer preferences in a number of industries. It is important to determine which changes are enduring and re-segment the customer base in line with their evolving future potential.

2. Define your future channel strategy at the new ‘moments that matter’ – map the journey for your highest value segments and identify the ‘moments that matter’ i.e. the stages that they care about most which drive their behavior. These moments and the desired experience will have changed. What was previously revolutionary in digital experience are now quotidian, and the human face-to-face contact prerequisite for many commercial exchanges are now redundant.

3. Prioritize the capabilities required to deliver on those ‘moments that matter’ – define the ideal experience at these moments and map your current organizational capabilities against this; taking into consideration people, process and technology. This will provide a view of your capability gaps, and where to prioritize your focus.

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4. Drive efficiency from capabilities that are not valued – within the ‘moments that matter’, identify the capabilities that are not directly adding as much value and look towards the most expensive functions for efficiencies. These are the parts of the organization which can be made leaner without impacting customer experience and sentiment.

5. Implement productivity enablers – when headcount is reduced, the remaining employees need to be supported with the right enablers to assist with delivering on customer expectations. Investment in new channels, process automation and consistent ways of working will ensure any cost reduction is sustainable and employee experience doesn’t become collateral damage.

6. Start preparing for the Rebound – build the business case for investment in the priority capabilities as the starting point for growth. The current crisis has been physically, psychologically, and emotionally bruising for a lot of people. While the ability to maintain BAU resourcing and apply strategic investment will vary depending on the resilience of the industry and the organization, it is important to map the path out of this downturn, as much for employee morale, as for strategic execution.

How to get going

Just about every organization is heading into the economic reality of the pandemic. Facing a steep downturn of similar magnitude to the Great Depression, companies are looking at significant cost reductions in the interests of short-term viability. However, the efficiency agenda is especially fraught during these times, risking damage to customer and employee perception and to the growth agenda going forward. By working back from the customer, you can protect and strengthen the parts of the business that contribute to both CX and EX, and set up for the Rebound phase, which hopefully will be upon us in the not too distant future.