Business Strategies May Be Due For A Reset In Response To COVID-19
The resetting of business strategies due to the COVID-19 pandemic is a crucial step in supporting business leaders’ decision making. The research firm Gartner sees the reset as three phases that leaders will go through during the pandemic—respond, recover and renew.
“There’s been a reset of the workforce and work itself, a reset of the employer/employee relationship and a reset of the business ecosystem. For most, the business impact of the pandemic has been deeply negative, while positive for some fortunate sectors,” says Chris Howard, chief of research at Gartner. “The pandemic has wiped away the strategy for some leaders, but they’ve also garnered invaluable experience. Now it’s time to bring together the executive team and use those lessons to reconfigure their business and operating models for a new reality.”
In the “respond” phase, immediate actions are focused on keeping people safe and essential business functions operating. This is a relatively short period marked by high effort and potentially chaotic activity. Key activities within the phase include implementing temporary fixes to "stop the bleeding."
The “recover” phase is a more organized/coordinated effort to stabilize operations. This is of medium duration and key activities include creating a plan to restore a scalable state, and identifying capabilities needed to strengthen, refactor, reopen, rehire, re-budget and resupply.
The “renew” phase is an extended period marked by strategic, durable execution across the organization. Key activities include learning to conduct operations processes and workflows in new, repeatable and scalable ways, and using lessons learned and emergent patterns from prior phases to coalesce around a new foundation and way forward.
Gartner notes that these phases are not sequential and can overlap. During highly disruptive times, it is possible to think about the renewal phase, even while grappling with the triage response and recovery. Successful resets also build organizational resilience. As organizations weed out weaknesses and amplify strengths in their business and operating models, they will be better positioned to weather the next disruption.
“In the absence of a vaccine or cure for COVID-19, any rebound in business activity could easily be followed by another round of response, recover, renew, so the imperative is to absorb lessons learned quickly and build sustainable changes into business and operating models,” Howard says.
To create a resilient business model, Gartner advises business leaders to first determine exactly where and how the crisis has stretched and broken their existing models, and where the risks and opportunities lie as a result.
“For some, the pandemic has stressed business and operating models to the point of breaking,” says Howard. “Organizations will ultimately reduce or retire some activities permanently. This could include moving some business capabilities out into the ecosystem (e.g., SaaS) or removing a product or service entirely. In some cases, retirement is long overdue. Others could reinvent themselves by refocusing their capacity. Think of government service centers that have been forced to offer their services remotely. They may be able to retire some of their physical centers and instead focus on their newfound digital capabilities. Yet others, such as digitalized parts of an organization, might rescale permanently.”