We’ve all changed the way we operate during the COVID-19 crisis. Some changes were forced on us; others represent the height of innovation in a crisis. There’s been a reset of the workforce and work itself, a reset of the employer/employee relationship and a reset of the business ecosystem. For most, the business impact of the pandemic has been negative; for some, positive.
The pandemic may have wiped your strategy slate clean (or at least it feels that way), but you’ve also garnered invaluable experience. Now it’s time to bring together your executive team and use those lessons to reconfigure your business and operating models for a new reality.
From here, each enterprise will take its own path. Different parts of the same enterprise may veer off from one another. Some could reduce or retire specific activities. Others could rescale or reinvent themselves. Yet more could essentially return to their pre-pandemic baselines.
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As we shift from response to recovery, the key for senior leaders is to make strategic decisions that will lead them to a renewed future state, however paralyzing the uncertain outlook may seem.
Respond, recover, renew
Gartner sees the pandemic response in three phases. The duration of each phase will vary by country, industry and enterprise — and even by business unit, product or service. The phases are defined primarily by what’s happening at each stage:
Immediate actions focused on keeping people safe and essential business functions operating. This relatively short period is marked by high effort and potentially chaotic activity. Key activities:
- Temporary fixes to stop the bleeding.
More organized/coordinated effort to stabilize operations. Medium duration. Key activities:
- Create a plan to restore a scalable state.
- Identify capabilities you need to strengthen, refactor, reopen, rehire, rebudget, resupply.
Extended period marked by strategic, durable execution across the organization. Key activities:
- Learn to conduct operations processes and workflows in new, repeatable, scalable ways.
- Use lessons learned and emergent patterns from prior phases to coalesce around a new foundation and way forward.
What it takes to lead the renewal phase
Why aren’t the phases sequential? That’s a question I’m often asked when I share this reset framework. In particular, I’m asked: “How can the renew phase overlap with the response?”
It’s an important question — and the answer highlights the importance of deliberately leading the organization to a plausible and sustainable future.
During highly disruptive times, it is possible to think about renewal as you grapple with your triage response and recovery. In fact, if you are an executive leader, it’s not just possible — it’s essential.
I saw this mindset in progressive leaders from the earliest moments of the crisis. By the time the coronavirus outbreak became the COVID-19 pandemic, I was already talking with some corporate directors about how to reimagine their organizations’ futures. These executives didn’t relish the disruption; they knew they must seize the day and look for better ways to operate and reimagine their objectives.
A range of Gartner research, including our CIO Agenda 2020, has shown over time that this kind of agile decision making and strategy setting results in outsized performance — and establishes a lead over the competition that sustains long after the initial disruption. In these unprecedented times, it pays to have this type of dexterous executive committee.
Dexterous resets also build organizational resilience. As you weed out weaknesses in your business and operating models, you’re better positioned to weather the next disruption.
That’s especially important now.
In the absence of a vaccine or cure for COVID-19, any rebound in business activity could easily be followed by another round of response, recover, renew, so the imperative is to absorb lessons learned quickly and build sustainable changes into business and operating models.
But first, you need to determine exactly where and how the crisis has stretched and broken your existing models — and where the risks and opportunities lie as a result.
Coalesce senior and functional leaders around a scenario-planning protocol they can use to identify significant uncertainties and evaluate them in terms of their importance to the future of the enterprise.
And given the highly disrupted environment, create a minimum viable strategy and use adaptive strategy tools and techniques to iterate as your new normal emerges. Make strategic planning a continual activity so it can respond quickly to the inevitable changes in business context.
Reset for a sustainable future
As I said, it’s in the renew phase that wise leaders take the opportunity to reset or rebuild their business models and operations for a new reality.
Gartner outlines the plausible post-pandemic pathways as rescale, reinvent, return, reduce and retire — although many of those pathways aren’t direct.
For some, the pandemic has stressed business and operating models to the point of breaking. Organizations will ultimately reduce or retire those activities permanently. This could include moving some business capabilities out into the ecosystem (e.g., SaaS) or removing a product or service entirely. In some cases, retirement is long overdue.
Some organizations may reset by reinventing themselves for the long term. Likely examples are manufacturers that have switched production facilities to create new product suites, or retailers that have found new ways and new ecosystems in which to reach customers who can’t visit their physical locations.
Others could reinvent themselves by refocusing their capacity. Think of government service centers that have been forced to offer their services remotely. They may be able to retire some of their physical centers and instead focus on their newfound digital capabilities. Yet others, such as digitalized parts of an organization, might rescale permanently.
Yours may be one of the businesses that resettles toward the pre-pandemic baseline, but it won’t have been a straight path. Producers of nonperishable consumer goods are a good example. They initially experienced surging demand, but could easily see demand sink as the crisis-driven overstocking corrects. But that phase, too, will pass, returning demand toward pre-pandemic levels.
What will your future be? This crisis has created an opportunity to reset some of your goals and ambitions; it’s time to ask: “As we recover from this crisis, do we want to be different — and if so, how?”