Three Pillars of Value Creation Post COVID-19
Businesses in every industry that can seize the opportunity to transform their way of working will come out as leaders. Those who apply their learnings from their COVID-19 crisis response, across their organizations, will be the ones who emerge the winners.
COVID -19 has made businesses learn on a war footing and the crisis has brought us face to face with the future of work, today. Overnight, we have seen models and structures of work change, and exponentially increased our use of artificial intelligence.
Change, that was so far hindered by deeply ingrained business processes and beliefs, has been forced upon us by the pandemic. Across industries, we have seen a breakdown of organizational structures that were considered frozen. We have also seen implementation of radical solutions, overnight pivoting and rapid transformation in many other areas of business.
Immense organizational modifications have been made within weeks. Moving with surprising speed, businesses reevaluated policies and practices, altered their processes, methods, and even operational hours to meet the sudden shift in demand. At the same time, they were also prioritizing the safety of their employees and customers.
As we move on from riding the crisis to preparing for the future, leaders are probing how to win in the new world. The 3 essentials that can add immense value to businesses in the near future are:
- Remote working
While remote working has been on the rise for a decade, with COVID-19, the shift to remote working was large scale, and global. Following forced stay at home directives, remote working is being tested extensively.
Earlier apprehensions about remote working are giving way. There were concerns that employees who worked remotely would lose productivity. That they are being replaced by decisions to make permanent shifts to remote work is a significant development. Facebook will permanently allow many employees to work from home, even after the Coronavirus lockdowns ease. Twitter and Square have also announced permanent work from home.
We’ve also seen what’s working and what’s not when people work from home. For businesses, some of the key benefits include reduced requirement of office space, less commuting, fewer business trips, enhanced cooperation, increased flexibility of the organization as a whole, and shorter breaks and greater focus among employees. In fact, research by leading organizations has revealed that workplace flexibility can boost bottom lines by:
Increasing productivity by as much as 40%
Reducing quality defects by 40%
Lowering absenteeism by 41% and reducing turnover by 12%
Enhancing profitability by 21%
When employees work from anywhere and choose to move to less costly regions, it boosts their real income, enhances business output and reduces emissions. At a macro level, remote working is good for employees, businesses and, for the planet.
Nevertheless, the strong argument for remote working is accompanied by numerous challenges. More than just a change in location, remote working is a migratory move. It is another way of working – a complete shift from the conventional in-person, location based office work.
And while the use of local work methods for remote working may go fairly well in the short term, to ensure its continued success, businesses need a broader and deeper approach to this alternative. In the long term, it needs in-depth exploration, a structured approach and also, refining with time.
Like any successful business migration, deploying remote work requires a clear purpose, guidelines and commitment. It also requires an organization-level change. Remote work entails individual commitment, smaller teams, more independence, simultaneous working. It also entails greater trust amongst team members. In many ways, remote working is an opportunity to invest in collaborative working and use it to improve our organizations.
Prior to the pandemic, we were using digital technologies and data for a small number of business needs, such as process automation, recruitment, cyber fraud, customer relationship management or sentiment analysis. At the time, while use of advanced analytics and artificial intelligence was gradually increasing, obstacles remained. And often these obstacles were organizational and cultural in nature. The result was that utilization of data was not scaled to deliver meaningful value.
During the pandemic, data driven analytics become a vital tool to derive actionable insights. Its predictive and problem-solving effectiveness supported a variety of urgent business decisions. These included forecasting demand and liquidity, supporting supply-chain requirements and ensuring employee safety – all critical business needs.
To identify and meet challenges that were emerging overnight, businesses responded in new ways of using and deploying data. They set up central towers or nerve centers, mobilized analytics resources and built new data streams. These helped the teams not only with near-term decision making, but also generated longer term views.
Armed with data and insights, organizations were able to embrace a new internal clock speed. Data brought clarity, and some of the subjectivity in decision-making reduced. Conversations, as well as overall communication, became more focused and more probing questions were asked. Geographically dispersed teams were able to communicate with ease and effectiveness. Decision-making was decentralized, and delegated. In fact, in organizations that were well advanced in their use of analytics, a shift was seen from top-down decision making to data-driven decisions by frontline teams.
As a result, productivity improved for businesses that embraced AI powered decision making. At PwC, solutions that conventionally took weeks, or months, were delivered in days. Using agile datascience methodologies, the team developed a SEIRD (Susceptible-Exposed-Infected-Recovered-Death) model of COVID-19 progression in 7 days instead of the pre-COVID timeframe of three to four months that was taken to go from conception to production.
Machine learning and deep learning have since learnt from each input of data and continue to learn. They are using these inputs to generate new information for future business needs. Such data is what makes AI so powerful. And since any AI or ML will only be as good as the data collected, gathering the right data, in the right quantity and in the right format is vital.
In a post- COVID world, to move from data to insights, and insights to action, businesses can start with secure, cloud-based interfaces to transform operations. With increased use of data and AI, end-to-end visibility will become possible in real-time. While consumer behavior shifts, business boundaries are redrawn and learning increases, such visibility will be invaluable. In a stats roundup conducted by Econsultancy.com, 89% of respondents said they hoped to use AI predictive segments for growth by the end of 2021. Going forward, winning businesses that embrace analytics and AI organization-wide to extract meaningful value, will emerge as leaders.
In the last few months, we’ve seen that organization-wide considerations have been the ones that worked. When efforts to respond to the crisis were rolled out across the business, rather than being focused on a single function, they delivered results.
Replacing the slow-moving, hierarchical business bureaucracies of yesterday, cross-functional teams were brought together to move with speed. Processes and decision making was streamlined, for immediate results. Rigid annual plans gave way. Normal reporting lines took a back seat and organizational layers and silos were suspended. Traditional boundaries disappeared.
During this time, many business leaders also delegated and empowered their frontline teams to make decisions. These employees were given not just authority, but also decision-making visibility. This time, it was not just those with higher ranks who were making decisions. Employees who were best informed, and able to deliver, were also responsible for steering the ship.
We also saw that both communication and transparency increased across the board. And there was a greater tolerance for mistakes that didn’t threaten business. Raising red flags was suddenly not a sign of incompetence. As markets collapsed, we saw that compromises suddenly became possible and flexibility took centre stage.
Once all the business stakeholders were on the move simultaneously, teams responded in inventive ways. Within days, these dedicated teams and daily situation rooms built capabilities that had been expected to take months, or years, to come to fruition.
Using agile delivery methods minimum viable products were created in record time. Iterative development, rapid testing and early feedback enabled quick adjustments. Learnings from the frontline were taken, and systematically scaled. Automobile giants like GM and Ford were amongst the many automobile manufacturers who switched to making ventilators. Across the globe, distilleries altered production to make hand sanitizer. All these businesses had a clear focus – define the problem, find the solution and then scale it.
And all their teams were highly productive and resilient; even while coping with sudden change. They were riding the shockwaves. They rolled with the punches and adjusted themselves to the need of the hour. Flexible, quick and elastic, they adapted on the fly, pivoted and emerged winners. It was their ability to adapt, that made daily heroics possible.
As we move on, the tide continues to shift. On one hand we see that online sales have increased 55% in July when compared to last year. On the other hand, digital travel sales in the U.S. are expected to drop 44.7% for the year. All around, we are faced with long term uncertainties. There is little visibility over when, or how the crisis would end. How would customer expectations differ? How will regulations change? What will the industry landscape look like? What are the risks and opportunities? Can the current speed be preserved as we go forward?
As we build back, only one thing is certain. In such unchartered waters, with rapidly shifting consumer patterns, unpredictable events and an uncertain time horizon, rigidity will no longer work.
Going forward, leaders will emerge from those who effectively adapt to the new world. Winning businesses will re-examine their processes, and re-assess their business and operating models. In the new normal, guidelines will change and systems will be altered. Deeply held business convictions and ingrained concepts will be questioned and priorities revised. Transformation, rather than transactions, will drive conversation.
Building an adaptive organization to win in a VUCA world will demand a cultural transformation that leaves no part of the business untouched. Business must seek out a change in the mindsets, actions, words and behavior of each person in the organization.
With a clearly defined, common purpose, you can get a strong buy-in from all stakeholders and ensure their support for change. A cultural shift will not be successful when it is dictated top-down, directed or regulated. Rather, everyone involved should be convinced.
Once a shared understanding of the reasons to drive change are established, and there is organization-wide commitment to the desired outcomes and change, then opportunities around the corner can be leveraged, and used to gain advantage.
Businesses in every industry that can seize the opportunity to transform their way of working will come out as leaders. Those who apply their learnings from their COVID-19 crisis response, across their organizations, will be the ones who emerge the winners. And along with their businesses, they will grow from what they have learned.
Navigating COVID-19 is challenging, and possible. To know more about how it can be done, hear from Dr. Ram Charan, a top CEO coach.
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