8 practical steps for organisations post-Covid-19

Adam Ikdal, managing director and senior partner at Boston Consulting Group Johannesburg

History has shown us that such changes are not always temporary - crises can fundamentally reshape our beliefs and behaviours, but how then can organisations prepare for a post-crisis world, rather than hunkering down and waiting for a return to the past?

South Africa is familiar with societal shifts, many of these paving the way for change in terms of consumer needs, behaviours and refreshed or new policies. Some of these disruptions have had a brief impact whilst others have led to shifts that have persisted for the long term.

How will Covid-19 shift beliefs and behaviours?

Lasting shifts in social attitudes, policy, work, and consumption will likely emerge from the Covid-19 pandemic.

It’s hard to predict precisely how it will shape our perspectives on society, but it’s plausible that we could see a greater focus on crisis preparedness, systems resilience, social inequality, social solidarity, and access to healthcare. At an individual level, it’s also possible that we may adjust how we view the balance between work and family life, having been reminded of what is truly important to us.

The pandemic could also shape national politics, as citizens judge the effectiveness of their governments’ responses.

We can already see significant shifts in purchasing patterns based on the results of our consumer sentiment survey conducted in April and May. The survey reveals the vulnerability and financial insecurity that South African consumers feel during the Covid-19 pandemic. Most consumers have sharply curtailed expenses. Four of every five consumers (79%) surveyed said that they have either delayed or reduced their spending, and that percentage is consistent across all income levels.

Locally, retailers are challenged by changing consumer behaviour. One of the top three food retailers that recently published its annual results reported that while online grocery sales are accelerating, customers are reducing the frequency of their shopping trips as they are staying home, which means they are buying less, even though they have fuller trolleys.

We should not expect that all of these shifts will remain. We must distinguish between temporarily postponed, accelerated, or disturbed consumption, and new, more permanent patterns of consumption.

Furthermore, we should not expect consumption to shift only among existing products. New needs born in our current crisis will likely drive lasting innovation in other areas, such as mass disease-testing technologies, digital collaboration tools, or affordable home office setups.

Practical steps to sense and shape the post-Covid 19 reality

Expect change and look ahead

Organisations tend to become myopic and insular when under threat. But crises often mark strategic inflection points, and a necessary focus on the present should not crowd out consideration of the future. The key questions become, what next, and with what consequences and opportunities?

Understand broader social shifts

Addressable opportunities are often born out of new customer needs and frustrations, so listening to customers is vital. Companies need to look at how social attitudes are shifting to understand which observed changes in behaviour and consumption could be lasting.

For example, if leaders’ and workers’ attitudes toward remote working shift after a few months of experiencing it, that could have significant consequences for office equipment, office real estate, home remodelling, transportation, and other sectors and segments.

Scrutinise granular, high-frequency data

Aggregates, averages, and episodic statistical data will not reveal the weak signals of change. Companies need to access and analyse high-frequency data, such as data on credit card transactions, at a very granular level in order to spot emerging trends.

Identify your own revealed weaknesses

The crisis will undoubtedly expose needs for greater preparedness, resilience, agility, or leanness in different parts of your company. Those weaknesses also signal opportunities to renew your products and business model and serve customers better.

Study regions further ahead in the crisis

China and Korea are many weeks ahead of African countries in their experience of crisis and recovery. By studying what happened in these markets, leaders can better predict which changes are likely to stick or could be shaped. A geographical fast-follower strategy may be available to agile players.

Scan for maverick activity

Some companies, often smaller players on the edges of your industry, will be making bets predicated on new customer needs or behavioural patterns. Ask yourself, who are these mavericks, and which shifts are they betting on? Are those bets gaining traction? What are you missing? From there, you can decide on the appropriate response to each opportunity or threat: ignore, investigate further, create an option to play, replicate and exceed, buy the maverick, or act with high priority.

Look at which new patterns reduce friction

Frictions are unnecessary delays, costs, complexities, mismatches with needs, or other inconveniences that a customer experiences in using a particular offering. Forced habits that entail more friction than the traditional alternative are likely to be temporary: we may be forced to reduce our alcohol consumption, give up smoking and trim our own hair in a crisis, but many are likely to return promptly to consuming their favourite drink and visiting their barber when it is over.

On the other hand, forced habits that reduce friction are more likely to stick: how many of us relish the thought of facing traffic a couple of hours each day to reach our workplaces? High-friction areas are also ones where it is logical for mavericks to innovate and where they are more likely to succeed.

Maintain hope and a growth orientation

It’s almost inevitable that we will face a deep post-crisis recession. This is not a reason to postpone innovation and investment. Counterintuitively, 14% of companies grew both their top and bottom lines during recent economic downturns, and our analysis shows they create value mainly through differential growth. This is true across all industries.

The evidence is clear: the best time to grow differentially is when aggregate growth is low. “Flourishers” in a downturn do reduce costs to maintain viability, but they also innovate around new opportunities, and they reinvest in growth pillars in order to capture opportunity in adversity and shape the post-crisis future.