I just listened to a podcast about an automobile parts company that was facing significant challenges in the current COVID-19 crisis. With auto plants all over the world shut down, they were facing an unprecedented crash of all orders and sales.
To their credit, rather than laying people off and contracting, they looked for new opportunities. It turns out that one component they manufacture is pistons for various automobile applications. It just so happens that ventilators use pistons—ventilators that are now in unprecedented demand.
This company was able to shift its production to producing ventilator-sized pistons quickly. They already have partnerships with several manufacturers and a huge backlog of orders. That’s a pivot of a business model that will enable the company to not only survive this crisis, but to actually grow their revenue in 2020.
I’ve noticed that many organizations are taking the opposite approach. They are canceling projects and investments to create a surplus of cash. That isn’t necessarily a bad thing, but the question is, do you sit on that cash…or do you re-think your strategy—and thus your investments?
Lasting Changes are Underway
Waiting for the world to return to normal may be a big mistake. This crisis is likely to have a permanent change on many aspects of how we live, interact, and conduct business. Consider a few simple examples:
Electronic meetings have obviously skyrocketed over the past 2 months. While face-to-face meetings will return at some point in the future, we now have essentially all members of the workforce becoming more and more competent at being productive via e-meetings. That productivity and unprecedented adoption of these tools is a permanent change to the workforce that won’t be going away. Companies will continue to operate with more electronic and remote meetings than ever before. I expect some companies will even question the need for expensive office space when they evaluate the success of this work at home period.
- While online shopping has been growing significantly over the past few years, there were still segments of the population that were not participating (or barely participating). That changed very suddenly—and now everyone is an online shopper. In February, the share of online sales exceeded general retail store sales for the first time ever. The March report in retail sales won’t be out for a few weeks – but look for a huge shift. While some will return to ‘normal’ retail after the crisis, we will never see the brick and mortar percentages that existed in the past. It is also very possible that many brick and mortar retail establishments won’t survive this crisis, which will further drive online retail sales.
- In the online shopping world, we’ve also seen shifts in segments that were being adopted very slowly. For example, the online grocery market was growing at a nominal pace before this crisis. A recent study shows that 31% of shoppers purchased on-line groceries over the past month. There has also been a huge spike in on-line pickup services. These shifts in the market are likely to become permanent as our habits change throughout the crisis.
- The trade war between the US and China was already disrupting supply chains before the COVID-19 outbreak. Companies were looking to diversify and ensure that suppliers were available from different countries and different regions of the world. The nature of this virus has meant that some areas were hit harder than others. We are also likely to see an uneven recovery, with some markets opening earlier than others. This is causing—and will cause—further exploration of new supply chains as companies work to avoid production interruptions. Smart companies will embrace supply chain diversification and invest in this area.
- Many organizations have experienced difficulties supporting the instantaneous shift of employees to offsite locations and working from home. This has put extreme stress on many company’s networks and computing resources. Most organizations were exploring cloud computing before the pandemic. You can be sure that this move to cloud will be accelerated as a result of the experience gained over this period of uncertainty. The cloud is built for the high demand of a shift of resources offsite. Smart companies will embrace their cloud roadmaps and aggressively migrate resources to the cloud.
The bottom line is that there will be many lasting changes in our society as an outcome of this crisis. It will be difficult to predict some of the changes, while others might be fairly obvious.
The real trick is making investment decisions in your organization that will allow you to pivot to new opportunities. Investment in the midst of the crisis will allow savvy organizations to emerge with new opportunities, cost reductions, and possibly new markets. This is an opportunity for the most innovative companies to emerge stronger and better equipped.
During this time, companies must quickly leverage their team’s knowledge and innovations to identify and invest in new opportunities. They must look carefully at their current processes and investments and determine which of these make sense to improve or grow—and which need to be redesigned or eliminated. Furthermore, they need to find new ways to capitalize on what they have.
Alignment is Essential for Success
This isn’t about jumping on new ideas haphazardly or impulsively—especially with so much at stake and resources so hard to come by. Companies must still ensure alignment between their investments and goals to increase their likelihood of success. Unfortunately, this has been a struggle for many companies, even before the crisis.
Enterprise Architecture (EA) can be very helpful for this. By applying strong Enterprise Architecture principles and tools, we’ve helped many companies align their people, processes and technologies around their business goals, and accelerate their desired outcomes.
Furthermore, when it comes to a significant transformation or strategic initiative, companies need to put a clear, practical, and executable plan in place that connects their strategy and goals with the individual projects, investments, and tasks to make them happen. Unfortunately, most companies have a considerable gap between what they’re trying to achieve and how the business will actually need to execute it.
They need a better approach strategic planning—one that is practical, manageable and achievable…and not so overwhelming. By leveraging a pragmatic methodology for strategic initiative planning, we’ve helped them plan, prioritize and execute the right tasks, projects and investments at the right time to achieve their vision in a very cost-effective manner. This ensures they’re leveraging all of their resources most effectively, and they’re aligned around the desired results.
A Brighter Future
While nothing about our current situation from the Coronavirus is ideal, we’re hoping we can all find ways to make a positive change in our personal and business lives. Exploring ways to improve how we do things today while creating new opportunities in the face of major disruption are just a couple of approaches that will help us come out of this adversity even stronger.
We hope you will find new ways to improve and thrive, and that you’ll reach out to us for guidance along the way. We’re here to help, as always.
