When times are tough, the tough acts timely to innovate, evolve and survive
Leading in turbulent times is a double-edged sword – acting fast might be jumping the gun, while acting slow could lead to sinking. A Swedish phrase: ‘Is imagen,’ roughly translated as “ice in the belly,” can be called the correct approach. One needs to retain one’s cool in a critical situation.
Leaders are obligated to make responsible decisions to keep their companies afloat. But those who manage the economic effects of this crisis in a clear and compassionate way and use it to make judicious investments in smart technologies, process efficiencies, reskilling talent will create more value for their companies and will come out of this pandemic stronger than ever before. A cost-cutting response is understandable. However, most organizations, almost like a reflex action, turn to cost cutting and slashing jobs as a response to a crisis. Research has shown that those companies which had mindlessly cut jobs during the 2008 financial meltdown underperformed later.
Seize the momentum
Often, crises have been seized by several companies as an opportunity to increase the momentum of their digital transformation initiatives or launch such projects. The COVID-19 pandemic is no different. It became a business survival imperative to leverage digital platforms to deliver and connect to employees, customers, partners, stakeholders and the devices and equipment used by the enterprise. Launching IoT projects became a survival strategy as manufacturing automation, robotic process automation, became mission critical. Rationalizing real estate space also provided much needed savings for companies as most employees worked from home.
Companies rightfully stepped up by focusing on their employees’ health and safety as they muddled through a difficult set of threats and uncertainties. Many organizations saw leaders at all levels step up to the challenge, focus on the most critical issues demanded by the situation, band together, and respond heroically and selflessly to support colleagues, customers, and communities.
Involve your people
When in a crisis it is critical that one asks their employees to voice their ideas. By showing them, not just saying, that you care about what they think, you will have stronger buy-in for the initiatives you eventually prioritize. Before crowdsourcing ideas leaders should offer structure by articulating that you intend to prioritize initiatives with lower capital requirements, lower risk profiles, proven positive impact on cash flow, higher chances of saving jobs, and so on. Then truly demonstrate that you are open to the ideas of the staff.
Innovate, innovate, innovate
Research has shown that innovations bunch up during crises, only to be unleashed as economic conditions are restored. Economist Alfred Kleinknecht tracked patents granted from 1901 to 2005. There were clear spikes in innovative activity during the Long Depression of the 1870s and 1880s and the Great Depression of the 1930s. The magnetic tape recording, helicopter, nylon and the ballpoint pen were milestone innovations during the 1929 Depression.
Brace for more uncertainties
The post-pandemic future will be buffeted by geopolitical uncertainties, increased protectionism, tougher regulations around data protection and privacy, trade wars, shifting customer preferences, high velocity technology transformation and finally this will not be the last pandemic. Successful companies will anticipate these changes to the industry landscape and adapt their business models ahead of the competition to protect the existing business and to gain advantage.
We have to keep in mind that during an extreme shock, your historical data sources may become obsolete. It doesn’t matter how good your information was yesterday. You need new information to be able to understand the future and create the ability to navigate uncertainties.
Crises such as a pandemic—when no one has the answers, and uncertainty is high—remind us of the importance of asking the right questions. Analytics gives firms an edge in learning and adapting. When the world is suddenly upended, those who can learn the fastest are best positioned to succeed. Smart companies will invest in analytics today to get ahead of whatever is coming tomorrow. This is the time to build risk analysis teams which will use the latest Artificial Intelligence technologies to look out for the slightly anomaly in the horizon to alert the organization and prepare it to respond.