Ad Augusta per Angusta, building on Covid-19’s crisis learnings to build virtuous circles, and deeply transform businesses

Covid-19’s sweeping impact on business has been toughly experienced across the globe. Major disorders such as supply chain disruptions for products and raw materials coming from Wuhan, and lockdowns in almost every major economic centers in the world led to the implementation of quick response measures. Some of them put into evidence that alternative ways of doing business and running operations to ensure business continuity can be meaningfully adopted, unveiling thus a wide range of possibilities in terms of new operational models and significant productiveness pockets:

  • As the lockdown went effective, and the closure of schools prevented for instance 1.2M people from working in France – many companies quickly adapted to run support functions with remote or depleted staffing without major service disruptions so far, adapting processes and focusing on core activities
  • Quick business and operating models evolutions have also been implemented. The grocery retail sector had to readapt very quickly as the lockdown led to an immediate spike of activity in drive and online channels

Today’s crisis already acted as a tremendous accelerator for companies, usually experiencing major obstacles (technical, managerial, social, political …) in effectively implementing substantial long-term  transformational programs, either focusing on the short term imperatives, or giving the priority to perfectionism in design over the speed of execution, and eventually dying healed. This time, many companies stressed by the Covid19 crisis did not know it was impossible, so they did it… Other companies, even not having directly experienced by themselves disruptions and agile ways to cope with them, will have to challenge their ways of working and doing business too.

Such blatant evidence should be the trigger for companies to engage into strategic virtuous circles:

  • On the one hand exploring how the post-Covid19 crisis learnings (in terms of identified productiveness pockets, new ways of working …) may general run-rate substantial benefits
  • On the other hand understanding how to reinvest wisely those proceeds into more structural long-term transformations, aiming at building more profitable, but also more sustainable and meaningful companies.

According to our experience, the new ways of working and productiveness measures derived from post-Covid19 learnings can be broken down into three main categories:

Of course, companies shall be very careful about the practical implementation matters of these productiveness measures. Regulatory environments in terms of labor legislation should be both tight and fast moving following governmental business supporting measures. A detailed risk analysis of pitfalls from productiveness measures implementation will be therefore mandatory. A close monitoring of short-term regulatory evolutions and its alignment with transformations dynamics are therefore crucial.

Once having made real the proceeds from short to mid-term productiveness measures - companies will have to engage into reinvesting the savings into more structural transformations of ascending complexity and impact.

The old – but still valid - pre-Covid frameworks focus mainly on improving the financial strength of companies, focusing on restoring costs structures and balance sheet soundness before engaging into profitable growth operations:

Finally, prior to engaging into major transformations, companies shall rapidly initiate four major initiatives:

  • Envision the various possible futures, through the practice of Scenario Planning defining future business and operating models resilient to major contemplated uncertainties
  • Perform their “Strategic Aggiornamento”, to seize well the new post-Covid19 crisis business paradigm:
    • The Strategic Choice Cascade will be there a crucial approach to elaborate of the core pillars of the overall strategy (i.e. Which long-term aspirations? Where to play? How to win? With which capabilities? Which organization?)
    • A Portfolio Management exercise is also critical to evaluate the strategic soundness and resilience of a company’s business portfolio
  • Quickly initiate an external and candid diagnostic of their operations, to rapidly asses the key operating priorities and quantify the short to mid-term productiveness improvement potential, leveraging on either proprietary or industry learnings from the Covid19 crisis. This diagnostic should also encompass corporate social responsibility readiness (materiality matrix, GHG emissions assessment)
  • Wrap-up the outcomes from the above-mentioned initiatives through a Strategic Planning process