The quest for post-pandemic resilience and recovery

Busi­ness resilience is the buzz­word now. After 2020, is that a sur­prise? Most busi­ness­es don’t have to be told that they need to do things dif­fer­ent­ly – many are active­ly search­ing for a way to “build back bet­ter” as the econ­o­my recov­ers. But how do you do that?

A good way for­ward is to look back.

While 2020 was a chal­leng­ing year, it was also a rare oppor­tu­ni­ty for organ­i­sa­tions to learn more about their busi­ness­es. The pan­dem­ic was a pres­sure cook­er, expos­ing fis­sures in busi­ness mod­els and oper­a­tions, some­times break­ing them entire­ly. It also revealed sur­pris­ing capa­bil­i­ties. Many organ­i­sa­tions dis­cov­ered that they could piv­ot quick­ly to remote work.

How­ev­er, dur­ing the time when ser­vices were being labelled “essen­tial” or “non-essential”, many found them­selves unpre­pared. Sys­tems broke down. Cus­tomers were lost to more pre­pared com­peti­tors. Prof­its dis­ap­peared. And many were not resilient enough to sur­vive the crisis. 

For those that were unpre­pared yet sur­vived, these hard lessons can be used to reflect and reshape for a bet­ter future.

But first, what exact­ly is busi­ness resilience? It can be defined as the abil­i­ty to recov­er from set­backs, adapt well to change, and to con­tin­u­ous­ly improve despite chal­lenges. With new tech­nolo­gies emerg­ing, geopo­lit­i­cal and envi­ron­men­tal dis­rup­tions, mar­ket and con­sumer demands evolv­ing, this abil­i­ty is fun­da­men­tal for busi­ness continuity. 

As a busi­ness own­er myself, COVID-19 was a wake-up call to reval­u­ate my company’s resilience, which is why we are cur­rent­ly under­go­ing a trans­for­ma­tion exer­cise where we put our sys­tems and busi­ness mod­els under the micro­scope. For months, we asked ourselves:

• What are we doing badly?
• How can we do things better?
• What can we do to make the change?
• What poten­tial cri­sis may we face in the future? Are we pre­pared for it?

These ques­tions are con­fronting, but they are a nec­es­sary part of build­ing a more resilient busi­ness. In my opin­ion, we should focus our efforts on revamp­ing these three areas:

1. Busi­ness models

Does your cur­rent busi­ness mod­el cre­ate val­ue for your cus­tomers? Does it meet their needs? Or is it dan­ger­ous­ly out­dat­ed or irrelevant?

To answer this ques­tion, we need to be hyper cus­tomer cen­tric. We should con­stant­ly ask our­selves how we can bet­ter cus­tomer expec­ta­tions. The ide­al sce­nario is to always be ahead of the curve and to offer them some­thing they don’t even realise they need. The key is to diver­si­fy one’s port­fo­lio of prod­ucts or ser­vices so that if one fails, there are always fallbacks.

Net­flix famous­ly piv­ot­ed from rent­ing out DVDs to being the enter­tain­ment stream­ing phe­nom­e­non that it is today. And now, with com­peti­tors climb­ing onto the stream­ing band­wag­on, they are reshap­ing them­selves into pre­mi­um cre­ators of enter­tain­ment. But all this hap­pened because their lead­ers were unafraid to attack their busi­ness mod­el again and again. It also required sig­nif­i­cant invest­ments in untest­ed tech­nol­o­gy, tal­ent and an exper­i­men­tal attitude.

2. Oper­a­tional resilience

The pan­dem­ic has shift­ed change into a new high-speed gear. Com­pa­nies with accel­er­at­ed inno­va­tion prac­tices and oper­a­tional agili­ty are those that will gain a com­pet­i­tive edge. Dig­i­tal trans­for­ma­tion is a big enabler, so it’s also imper­a­tive to review lega­cy systems.

Here is a dead give­away to know if your organ­i­sa­tion is behind the times – ubiq­ui­tous spread­sheets. Just as using paper and pen­cil was seen as behind the times 20 years ago, spread­sheets are a sure sign that too much man­u­al work is still being done.

The pan­dem­ic also high­light­ed that a lack of diver­si­ty in sup­pli­ers is a major risk. How­ev­er, this is noth­ing new. Over 20 years ago, a well-known cell phone com­pa­ny had their only source of chips dis­rupt­ed when their supplier’s fac­to­ry burnt down. The com­pa­ny was unable to source the required micro­proces­sors from oth­er ven­dors. This severe­ly dis­rupt­ed their abil­i­ty to man­u­fac­ture and allowed com­peti­tors to over­take them. Even­tu­al­ly, the com­pa­ny was bought over by a competitor.

His­to­ry is repeat­ing itself. On March 19, one of the car industry’s major chip sup­pli­ers suf­fered a major fire in one of its fac­to­ries in Japan. This came at a time when the indus­try was already fac­ing a short­age in chips, so this is expect­ed to have a mas­sive impact on the industry’s abil­i­ty to ful­fil orders.

The les­son here is to always have a back­up and to diver­si­fy prod­ucts and sup­pli­ers so that if any­thing hap­pens to one, the oth­ers can still sup­port you. A com­pa­ny can also expand its capa­bil­i­ties and offer­ings through acqui­si­tions, merg­ers, part­ner­ships or even by spread­ing out to dif­fer­ent regions.

One of the ways my com­pa­ny sur­vived the var­i­ous glob­al crises was by expand­ing our reach to dif­fer­ent coun­tries. I start­ed my busi­ness in the UK in the mid-90s, but quick­ly realised that for us to sur­vive the cycli­cal eco­nom­ic down­turns, we need­ed to gen­er­ate rev­enue from more than one market.

So, we began to spread out geo­graph­i­cal­ly, offer­ing our ser­vices in the Unit­ed States, Brazil, South Africa, India, the Mid­dle East and South East Asia in addi­tion to Europe. This geo­graph­i­cal diver­si­ty allowed us to with­stand the glob­al finan­cial cri­sis of 2008 and hold out against the trou­bles caused by the pan­dem­ic as dif­fer­ent regions of the world have dealt with it dif­fer­ent­ly. We, too, have piv­ot­ed to a more remote way of work­ing, mak­ing our ser­vices more fit for pur­pose in this post-pandemic world.

3. Organ­i­sa­tion­al culture

The next ques­tion to ask: Does the organisation’s cul­ture sup­port agili­ty, inno­va­tion, and swift deci­sion mak­ing? Is there, for one, a cul­ture of con­tin­u­ous change in the organisation?

Hier­ar­chi­cal com­pa­nies that shun employ­ees ques­tion­ing the sta­tus quo are wast­ing their most valu­able resource – intel­li­gence. Com­pa­nies that embrace a diver­si­ty of skillsets and view­points, and focus all their employ­ees on change using struc­tured facil­i­ta­tion pro­grams stand a much bet­ter chance of out­wit­ting their competitors.

The response to fail­ures is also impor­tant. Fail­ures should not be feared but embraced as a sig­nal to move in a dif­fer­ent direction.

To make this hap­pen, man­age­ment must walk the talk, inspire and fol­low through. Peo­ple need vision, direc­tion and facil­i­ta­tion to suc­ceed. And it is up to the lead­er­ship to cre­ate an envi­ron­ment where employ­ees are unafraid to fail, ques­tion and innovate.

Con­clu­sion

Build­ing busi­ness resilience requires com­mit­ment from lead­er­ship to ham­mer the com­pa­ny into a new shape and to forge ahead despite opposition.

There will be dif­fi­cult deci­sions to make, so lead­er­ship needs a healthy dose of courage to make invest­ments in new tech­nol­o­gy, rework or even scrap lega­cy sys­tems, and walk away from busi­ness mod­els that no longer work.

How­ev­er, busi­ness­es that dare to revamp will reap great rewards. They could be the ones to cap­ture new mar­kets, cre­ate a new demand where none exist­ed before, and thrive in an uncer­tain future.

This calls for vision­ary lead­er­ship. How can we emerge from our com­fort zones to lead our com­pa­nies to more inno­v­a­tive futures?

Krish­na Pau­pamah has worked with com­pa­nies glob­al­ly to trans­form their busi­ness for over 35 years. He is the Founder and Group CEO of Renoir Con­sult­ing. He can be reached at [email protected]

This col­umn was first pub­lished in Busi­ness Today Malaysia.