Taking the Right Decisions in the COVID-19 Crisis
How organizations can benefit from data-driven decision-making principles to successfully cope with the economic effects of the crisis, ensure business continuity in the short run, become more resilient in the long run, and excel in the post-COVID-19 era.
How decision-making changes in times of COVID-19
In recent weeks, our way of life has changed abruptly. Public life has been either drastically restricted or halted altogether. COVID-19 does not only effect the health of millions of citizens, but shows immense secondary effects on our economies, too. Stock markets have plunged and show great volatility, some companies are seeing shut downs of their supply chains while others face extreme demands, both of them leading to disrupted workforces. COVID-19 changed communication and decision-making already.
Every organization needs to investigate the effects of the current crisis on their business and derive appropriate measures based on a clear outside-in perspective, ideally underlined by scenario-based mitigation strategies. Especially in these times, decision-making needs to involve a fact-based approach including the gathering of valuable information to assess different options, whilst avoiding biased data usage. However, it is not unusual for organizations in critical situations to rely solely on their managements’ experience or maybe just a gut feeling.
COVID-19 painfully shows that digitally native organizations that are “insight-driven by default” show much higher resilience and are able to tighten their dominant market positions, even growing share value while stock markets tumble. These organizations are equipped to manage the crisis more smoothly, and we also expect them to recover and excel faster once markets and regulatory efforts return to normal. However, COVID-19 will show a permanent effect – in this article, we will show you how your organization can adapt best practices without initializing the process to become the next “big tech” company.
Why digital organizations put insight-driven decisions at their core – and what you can learn
Insight-driven organizations and those in the process of becoming more insight-driven take decisions more analytically and have principles in place that favor superior analytical decision-making. They embed analysis, data, and reasoning into the decision-making process, every day.
Fact-based analysis of information and turning data and information into insights is the source of their competitive advantage. It enables these organizations to drive innovation, connect loose ends and know which initiatives are favorable over others within a shorter timeframe. Having data and analytics at their core, insight-driven organizations are prepared to take the best decisions in an efficient manner. It enables them to manage core business operations in the most cost-effective way and (re-)act on a day-to-day basis to the many short and longer-term effects of COVID-19.
While high performing IT infrastructure will certainly help, the principles of an insight-driven organization manifest in their culture starting with top leadership commitment and processes supported by all employees. This is why we truly believe that an insight-driven approach can be applied to your organization right now – independent of your maturity level.
Gain powerful insights on the effects of COVID-19 as a non-digital organization
As discussed before, insight-driven organizations have an inherent drive to take fact-based decisions, instead of only relying on their intuition. However, contrary to common belief, it is not the high-tech infrastructure or the fully digital business model that makes those organizations’ success – it is their culture and insight-driven way of thinking. Non-digital organizations will have neither the time, nor the resources to rapidly rebuild their IT infrastructure, but organizations that are able to adapt to the way of thinking have the most powerful short-run lever in their pocket.
1. Ask the right questions
The art of asking the right questions is severely underestimated. Often we simply tend to receive a confirmation of our own assumptions and not truly seek for information. During “normal” times we want someone’s (expert) opinion in order to take a shortcut with no need for own research. That is not how questioning in insight-driven organizations works. Most companies have all the necessary data and information available, even though the degree of effort to retrieve or the quality can differ.
• Be precise: The question should not lead people to interpretations. For example: “How does Corona affect our company?” This could mean anything from customer behavior to way of working.
• Have a measurable answer: For exxample: “How scared are our customers?” If being scared is not quantified by some sort of customer sentiment insights there will be no strictly factual answer to this question.
• Dig deeper: There might be not one right question but a question that will cause follow-up questions including the notorious “So what?”. Use brainstorming and mind-mapping techniques to get to the heart of your question.
2. Gather the right information
A fully developed insight-driven organization follows a clear (analytics) vision and applies state of the art technology. This includes a coherent business logic across all systems, tools and interfaces, cloud services, IoT and AI. There is total transparency at the touch of a button enabled by a professional unit of data analysts. Managers and the board receive real time information visualized in user-friendly dashboards individualized for their specific role. If you compare high-end insight-driven organizations to the remaining 99% of companies, it becomes obvious that insight generation requires a lot more than just collecting data.
Communication and preparation are key. There is a high dependency on employees to provide the required data. In some cases, employees will even be asked to digitalize certain data. Following a Deloitte survey from 2019, one of the biggest barriers to embed analytics into processes relies on resistance across the workforce.
- Communicate clearly about what data and information is expected and in which format. Imagine asking your accounting department for the pending invoices. There are million different ways in which format the required information will be sent back. From scanned documents to system exports, it can be anything. This problem multiplies by the departments or employees providing data. Since the answer for many of your questions probably require more than one data source, the compatibility needs to be assured where interfaces and an overarching data strategy is missing.
- Prepare your employees across all departments and ensure that there is universal understanding. Once the required data is gathered, there must be support by employees with skills in data preparation and visualization – ideally supported by “purple people”. Talent can be spread broadly across an organization without being noticed. Ask early for support to identify the right people. Include external information sources (e.g. COVID-19 infection rate changes from publically available records) and consider additional advice from data specialists with a strong track record in gathering useful data and information across business silos and functions.
3. Make sure the right actions are being taken
Analysis and especially interpretation of data to separate the wheat from the chaff in terms of generating insights may seem complicated. Again, solid statistical and machine learning capabilities are facilitators, but not necessary drivers of insight-driven decision-making.
To be able to spot business sense in data and find a true answer to the initially asked questions at the required time and adapted to the audience, result visualization is crucial. Humans only have a limited capacity to process information. This is why insight-driven organization’s intelligent tools that serve people by producing target-group specific dashboards ease the decision-making process. In the event of missing or simply not identifiable capabilities in your workforce, the most efficient solution is to get a professional data analyst aboard. In order to create C-level insights and derive first implications a special skill mix between science and art is required.
Regardless of the presence of data analytics tools and a crowd of talented data analysts, data analytics is a team effort. Data needs interpretation and context, which is why the involvement of business unit leads and middle management is inevitable. To answer your questions and ensure the right actions, it is crucial to follow an analytical, objective and hypothesis driven approach. The data might not reveal what you expected, but they might also reveal opportunities you would not have imagined.
Continue your business and prepare for future insight excellence
Switching the perspective from inside to outside, there are multiple pathways to a successful mitigation of the impact of COVID-19. Organizations, and especially those that are not digitally savvy or insight-driven, should see this challenge as an opportunity to thrive on and build a competitive advantage.
In Deloitte’s cross-industry IDO survey 3, more than 80% of responding companies were considered to have only minor analytics and insight capabilities (“Aware” or “Experimenting”). COVID-19 will be an accelerator for these 80% to drive the analytics transformation in one or another way, but to succeed organizations need to act in a strategical, well-organized and prioritized manner.
To help you tackling the economic effects of COVID-19 in the short run, we
will share five quick wins to ensure continuity as well as provide you with our
four-step approach on your transformation towards an organization that is “insight-driven by default”.
1. Ensure business continuity in the short run: five exemplary quick fixes
Focusing on business continuity in the short term, organizations can act in five ways to reap low hanging fruit:
• COVID-19 Prioritization Tool: Foster information-focused analytical capabilities to build a COVID-19 prioritization support tool, allowing your organization to take effective decisions based on reliable parameters and automated external as well as internal data to prioritize products, initiatives and sales channels.
• COVID-19 Demand Detector: Foster insight-focused analytical capabilities and utilize external machine learning platforms or skills to set up or incorporate an AI-based demand prediction model that detects anomalies and adapts demand forecasts to COVID-19 infection rate deltas.
• COVID-19 Government Action Indicator: Foster intelligence-focused analytical capabilities to leverage existing natural language processing (NLP) tools that help you to automatically extract and understand data and policies on a large scale to predict government response and regulatory initiatives.
• COVID-19 Innovation Accelerator: Foster innovation-focused analytical capabilities to allow rapid go-to-markets for new products or new sales channels to counteract decreased brick and mortar store demand by rapid prototyping, innovation labs or temporary innovation hubs.
• COVID-19 Maintenance and Asset Relief: Foster industrialization-focused analytical capabilities to embed predictive and remote maintenance routines based on IoT devices to optimize your bottom line by keeping assets working with minimal effort and at minimal cost
Building upon the quick wins during this time of crisis, your organization can see it as an opportunity to get ahead of your competition by also internalizing or building the necessary insight capabilities for long-term excellence.
2. Enable business excellence and resilience in the long run
To become a resilient player in the long run and build a competitive advantage, it is necessary to follow a comprehensive and structured process and build upon short-term successes that were reached during the COVID-19 crisis. Deloitte has developed this four-step approach to support you in your insight transformation:
- Understand and envision your organization’s current analytics maturity, your overall strategy and the level of capabilities you want to reach in the next 3 years
- Identify the potential of the added business value to your organization by taking better, faster and more efficient decisions and adding innovative products or services to the portfolio
- Build and manage your analytics and insights portfolio by efficiently developing proof of concepts and reducing redundant initiatives with a comprehensive portfolio management
- Transform and capture the full value of becoming an insight-driven organization by building on short-term efforts to tackle COVID-19 to transform your operating model in the long run as the backbone including not only IT infrastructure but also the right people (“purple people”) and processes
Prepare your organization to jumpstart after COVID-19
Despite of the many challenges organizations go through while economic COVID-19 restrictions are in place, organizations, while ensuring liquidity at the core, should not forget to prepare for the post-COVID-19 world. Since many organizations may resort back to old practices with less flexible, less insight-based ways of decision-making after crisis response, intensifying efforts towards enhanced information flows and decision-making will provide you with a significant competitive advantage.
It is in the best interest of management to define or reinforce a new way of working and decision-making going forward. While the early and turbulent COVID-19 days will have been intense for managers for weeks and months, pushing the transformation of organizations after the crisis to reap the full benefits will require endurance over months and years and a clear vision:
- Post-crisis, organizations that manage to integrate COVID-19 learnings and capabilities into their way of working will outperform those that fall back. It will require endurance to manage the transition of returning to the working mode, e.g. return of employees to their core functions, ramp-up production along gradual recovery of supply chains. During the recovery phase, insights from within and outside of the organization and a comprehensive and compatible view of both will remain extremely important.
- Shifting gears from recovery to performance phase, your management and your organization will require a clear vision to use the momentum to reprioritize initiatives and decision-making tools that proved beneficial in times of crisis. COVID-19 will have a lasting influence on how employees, customers and organizations work, produce and interact with each other, and a shared vision will support your organization’s handling of the matter. In particular, the importance of data, technology and insight-driven decision-making will become more necessary than ever before.
Taking the next steps and how we can support you
In these insecure times, neither blind activism nor resigned numbness will lead to success. Data-driven decision-making principles need a C-level perspective to define the right questions, drive collaboration across the company and ensure the right measures are taken. Instead of taking decisions on a gut level, it is key to make data-based, smart decisions that allow you so successfully cope with COVID-19, ensure business continuity in the short run, and also become resilient and enable excellence in the long run.
Strategy and analytics need to go hand in hand to generate meaningful results – with the need for an overarching approach from asking the right questions to gathering the right information and ensuring the right actions. Ultimately, not every organization will need to transform into an Insight-Driven Organization – but any organization can adapt the necessary principles to gear their operating model towards insights excellence.
With Deloitte’s proven step-by-step approach, we will help you from grooming your strategy to fully following through on an insight strategy transformation. Independent of where you currently stand – our modular approach delivers clear outcomes and action items towards an Insight-Driven Organization at each step. Deloitte with its unique strategy & analytics ecosystem and proven track record across various industries is ideally equipped to accompany you along the whole journey.
Jan Bakker, Partner Monitor Deloitte
Stefan Schmid, Senior Manager Monitor Deloitte
Simon Mikulski, Senior Manager Deloitte Consulting
Sina Niggeloh, Senior Consultant Monitor Deloitte
Christian Schmied, Senior Consultant Monitor Deloitte