Ratish Pandey, Gold Level Business Coach, ActionCoach

Ratish Pandey, Founder of Ethique Advisory, has 35+ years of corporate experience in India and overseas in senior management roles, across multi-national companies. Skilled in a multitude of areas such as business strategy, setting up and developing profitable businesses, team mentoring, and business transformation, Ratish has handled diverse aspects of a business successfully and won accolades. He has had the good fortune of working successfully with teams from varied backgrounds and cultures.

 

The world has not quite been the same since COVID 19 came to visit. 

It has impacted every walk of life, every economy across the world. Unfortunately, it is still not behind us.

While every business on one side faced the upheaval, on the other hand, it sparked a new level of agility in Businesses. Many Businesses, while deciphering solutions to counter the impact, made good the opportunities the new scenario offered, quickly adjusted and adapted to what is, being called the ‘New Normal’, and had a smoother ride riding the tide, while, others failed and faced a rough ride.

Over the last few months, priorities for corporate executives have shifted from innovation, increasing revenue and acquiring market dominance to sustainable procurement, technology adoption and liquidity management. Unanticipated impediments like supply chain constraints, staff shortages, and operational complexities are further compelling the need for re-prioritization.  

It is time for businesses to embrace transformation (read New Normal). 

This article will touch upon a few trends that define the new normal and discuss their influence on the global economy.

The influx of Innovation and Technology 

Plato was accurate when he stated that necessity is the mother of invention. 

One field which endured remarkable development and implementation throughout the crisis has been digitalisation.  Digitalization has become an integral part of almost every aspect of the business – Salescustomer service, remote working, supply-chain to the use of artificial intelligence (AI) for better customer experience.

One sector that was quick to ride the tide was Healthcare, with telehealth and biopharma gaining traction.

Apprehensions regarding technology and its adoption by employees flew out of the window as success was tasted by organizations who were quick to adopt them to maintain operational efficiency. This increased the reliance on tech platforms for business continuity. 

New technology was not invented overnight; instead, the implementation was accelerated and deployment was at its peak efficiency to meet the need of the hour. 

As noted by Microsoft CEO Satya Nadella in April 2020, “we’ve seen two years’ worth of digital transformation in two months.” *  

Another turning point has been the adoption of – Remote Working, more out of necessity than choice According to the McKinsey Global Institute (MGI), more than 20% of the global workforce (mostly in high-skilled occupations in finance, insurance, and IT) could work the majority of their time from home and be just as productive. Professions involving software usage, data collection and analysis and communication-related tasks are some additions to the list. 

Like every change & new practice, it comes with its pro and cons. Equipping employees with the right tools for remote working entailed investment in hardware & software but imparting extensive training sessions to help them use the tools to the max is another challenge. 

On the other hand, this meant savings in travel expenses and time. Months of remote working has shown that productivity has actually increased rather than diminished, which in turn has sparked discussions about whether an organization needs to spend a fortune on office space for work.

Agility- your helping hand

Agility, not a new term in business but is the one in the spotlight.  

A business with the ability to nimbly reconfigure structure, strategy, processes and technology to deliver value-creating and value-protecting possibilities is an ‘agile’ business. 

What are the characteristics of an Agile business?

  • more decentralised less reliance on command-and-control decision-making from the top. 
  • has agile teams authorized to take the day-to-day decisions leaving the senior executives to manage the big bets. 
  • has competent staff in charge of making decisions & executing them

Creating a culture of agility requires an ecosystem built on trust and not just transactions. Companies with healthy ecosystems of suppliers, associates, vendors, and loyal consumers navigate tough times better.

Agility, if not supported by data, is nothing more than a buzzword. Companies must develop or expedite their analytical skills to provide the foundation for answers—but more importantly, enable them to ask the correct questions. 

It may necessitate retraining personnel for the effective use of data analytical tools.

Remember, a company that consistently learns progresses.

Shorter supply chains to optimize efficiency and resilience 

The case for more flexible and shorter supply chains has been in discussion for many a year. 

In 2004, a McKinsey Quarterly article stated that it is apparently more efficient to ship goods ”500 feet in 24 hours rather than 5,000 miles across logistical and political boundaries in 25 days… offshoring often isn’t the right tactic for businesses whose competitive advantage comes from speed and a track record of reliability.”  

Never has the fragility of the traditional supply-chain paradigm has been highlighted as it has been during the pandemic. Businesses witnessed abrupt termination of operations on account of lack of supplies. Businesses learned the hard way that individual transaction expenses are not nearly as important, as end-to-end value optimization—a concept that encompasses resilience, efficiency, and cost.

Rather than debating whether to produce onshore or offshore, the first question should be, “How can we establish a supply chain that generates the maximum value?” 

The answer more often than not will result in a solution that favours neither offshore nor onshoring but multi-shoring—thereby reducing the risk of business disruption that comes from being reliant on a single source of supply.

There may be a need to consider a move away from Just-in-time manufacturing for essentials and explore if Governments and consumers are prepared to pay for surplus capacity. 

Companies will need to focus on developing more adaptable supply chains that can function on a just-in-case basis. 

The fashion industry, for instance, expects to transfer some sourcing from China to other Asian countries, Central America, and Eastern Europe. Consider it the “nextshoring” of the new normal.

Green is the colour of recovery

Another thing that the pandemic brought to the fore as a focus is the need to protect the environment. Pollution costs and the advantages of ecological sustainability have been the topics of many a debate & discussion. India and a few countries in the Gulf have taken on investment in renewable energy on a sizeable scale. 

Europe, including the United Kingdom, has been united on acknowledging the issue of climate change. The US is shifting away from coal and investing in a variety of green technology, including batteries, carbon-capture systems, and electric automobiles. 

The necessity for enterprises to acknowledge this is obvious along two fronts. First and foremost, firms must address the investor concerns about long-term viability. The pandemic may speculatively be an indication of what a climate crisis may look like: systemic, rapid, wide-ranging, and global. There’s a case to be made for businesses taking steps to mitigate climate risks, such as making capital expenditures more climate-resilient or diversifying distribution networks. 

In addition, the potential for development that a green economy entails is likely to be significant. Opportunities for green growth occur across a broad array of industries, including energy, mobility, and agriculture. Green-technology firms may play the role of fuelling stock-market returns over the next few decades like the technology companies did in the last few decades

It’s reasonable to consider probable parallels between the pandemic outbreak and long-term climate changes. 

The pandemic has thrown supply chains, consumer demand, and the energy sector into disarray. Climate change is likely to have the same effect. Furthermore, increasing temperatures may result in more people contracting infectious illnesses. As a result, it might be argued, that addressing climate change is just as important for worldwide public health as addressing the pandemic. 

The pandemic outbreak was an unexpected shock that impacted the whole planet at once—what we refer to as “contagion danger.” 

Climate change operates on a similar but longer time scale, with increasing hazards. 

We live in a dynamic environment, one that promises to inherently change. Albeit at a pace faster than ever before. 

For any business to strive in these trying, changing times – resilience, agility, adaptability and cooperation are the key. 

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