• Part 1: A Proposed Path Forward — A Three-Phase Proposal >> Read It
  • Part 2: What We’ve Learned & Done So Far — Emerging from Phase I >> Read It
  • Part 3: Checkmark or Full V Recovery? — Imperatives for Phase 2 >> Read It
  • Part 4: Leading in the Next Normal — Innovation Fuels Phase 3 >> Read It
  • Part 5: Keys to Recovery — Solid Strategies in Uncertain Times

Keys to Recovery

Solid Strategies in Uncertain Times

If your business is like most, your revenues, profits and other financial metrics are not back to your original 2020 plan, but they haven’t cratered, either. After the initial period of digital improvisation and experimentation — in other words, getting your people connected and set up to work remotely — you’ve been running largely on adrenaline. That model works for a while and it’s often necessary to get through unexpected crises like we experienced early in the year. But now, the focus needs to shift from pure adrenaline to thoughtful design. After all, even the most resilient of us is likely running at least a bit low after the past six months or so. It’s not difficult to find evidence of this reality. Just think back to how many times you heard parents raving about the newfound quality time with their kids and all the games, crafts, baking and puzzles they were deploying. Now, those same parents are exhausted and hoping the weather holds so everyone can stay outside until bedtime.

If you buy into this argument of moving from the adrenaline phase to the design stage, the first question is, “What are we designing?” You’ve seen enough research by now that you’re fully aware that things are not “going back to where they were.” People have changed. As employees, we think of work as less of a place than we did eight months ago. We’ve greatly increased our use of banking apps, online shopping and delivery services. And, as professionals, we’ve changed how we evaluate brands and choose partners, providers or suppliers. The pandemic elevated the importance of digital ecosystems and resilient supply chains. It also made us put a high value on smart businesses — those that found ways to deliver in the face of a crisis without interrupting service, jacking up prices or letting quality slip.

So, at the very least, as we slowly emerge from the pandemic, the markets you serve will be populated by people and businesses that have packed years of change and evolution into a few challenging months. Some previous sources of revenue that felt permanent at the end of 2019 will be gone. But other entirely new opportunities will emerge as corporations, hospitals, governments and schools change everything from their mission statements to their workspaces.

Thoughtful designs capitalize on these changes. While there’s no one way or right way to drive this strategic process, there are three core steps to consider and use as foundation for your work: (1) Identify Core Changes in Your Markets (and Adjacent Markets); (2) Determine the Depth and Longevity of the Change; and (3) Align New Opportunities with Your Current/Emerging Offerings.

(1) Identify Core Changes in Your Markets (and Adjacent Markets). A good first step in the design process is to identify changes that were either caused by the pandemic or coincidental to it. Then, identify the behavioral changes that have already resulted — or will likely result — from that change. For example:

Structural/ Operational Change New Behavior Potential Growth Area
Remote work and hybrid work environments Refurbished or expanded home offices Construction equipment; home office printers, scanners
Distance meetings Collaboration software; networking and telecom solutions

 

Structural/ Operational Change New Behavior Potential Growth Area
Digital ecosystems and supply chains Digitization of core business processes Cloud-based platforms, network security solutions
Agile and locally focused logistics models Transportation management systems and last-mile delivery fleets

 

Structural/ Operational Change New Behavior Potential Growth Area
Acceleration of Industry 4.0 in factories and supply chains Increase in automation Robotics, factory automation platforms, IoT solutions
Changes in manufacturing and production strategies Production-grade 3D printing systems and software

(2) Determine the Depth and Longevity of the Change. Most of us can remember what it was like to travel before and after the events of September 11, 2001. Massive changes followed that date. Some were permanent, others dissipated over time. For example, the requirement to show your government issued ID at both the security gate and the boarding gate eventually dissipated. But changes like the TSA pre-check program and advanced screening technologies not only remained, they progressed. When evaluating foundational changes in the markets you serve, it’s important to determine how lasting and how impactful they will be. One way to classify them would be to place them in one of four categories and determining if they should be a foundational part of your long-term plans:

 

Category of Change Example
Temporary Surge Outfitting workforces with laptops for remote work
Lasting Impact Use of collaboration software platforms
Displacing/ Temporary Shift Deep decrease in use of public transportation
True Innovation IoT connectivity for factories and autonomous vehicles

(3) Align New Opportunities with Your Current/Emerging Offerings. The reality for most asset finance organizations is that some customers will grow financially stronger in the new normal and some will weaken or even disappear. The same is true for asset classes. Some will surge because of increased demand and floods of innovation, while others will stagnate because the world either needs less of them or abandons them altogether. While there is no magic formula, applying the practices noted above will help determine where your current customers and current asset classes fall. Chances are, you will continue to drive revenue and profit from most of your traditional lines of business. But even more important than reshaping your existing offerings, the process described above can help identify entirely new areas of growth. In most cases, growth will be centered on technological advancements. Most organizations — from banks to factories to schools had been slowly moving down the path of digital transformation. The pandemic accelerated those journeys, resulting in high demand for robots, SaaS platforms, security technologies and modern payment systems. Understanding the trajectory of this change will be key to growth and success in the new normal.

Regardless of where you are at in your journey, we’re here to help. Visit the IDS Resource Center to access free tools and resources to help you transition to the next normal.

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