Five strategic priorities for businesses emerging from Corona

While struggling to understand the true scope and duration of Covid-19’s impact, businesses must adapt their mindset and operations to align with the ‘new normal’.

Covid-19 is having a significant impact on organisations worldwide, disrupting their supply chains and shrinking their consumer base. Planning is a challenge, as there is no telling when and how the crisis will progress or abate.

Before the Covid-19 outbreak, global accounting and advisory firm HLB surveyed nearly 400 leaders in 55 countries to uncover the top strategic trends facing businesses. A few months down the line, the authors highlight that the previously identified trends have become even more important amid the disruption caused by the covid-19-induced downturn and its impact on business and society.

The first priority is to accelerate the digital transformation process. In the pre-corona survey, the adoption of new technology was among the top business priorities, but was far from the top of the list with just over 30% of businesses indicating action in this sphere over the next 12 months.

Now digital is now right on top for most businesses, as they look to establish and bolster their virtual working infrastructure. Alongside setting up ‘work from home’ arrangements with speed, businesses need to respond in real time to each development of the crisis and its impact on economy and finance, which creates the need for agility and efficiency. All of this calls for business transformation through digital means.

HLB recommends that businesses take a ‘holistic approach’ to business transformation, which ranges from changes in the tech infrastructure, bolstering cyber security, and analytics-based business development. This also paves the way to the second recommendation – workforce transformation.

In order to achieve the above objectives, businesses need employees that can extract potential from new tech. This requires an elaborate skillset and familiarity with the digital sphere. In the virtual working age, this becomes all the more essential to ensure a seamless transition to working from home. The authors recommend that businesses cultivate a flexible workforce, which can be deployed for various functions, as well as upsized or downsized in accordance with business needs.

Workforce transformation was also lower down the list in priorities last year, as was a consumer-focused strategy, which is HLB’s third recommendation. One trend that has been noted across different markets is growing consumer consciousness. People across the globe are ever more conscious of their trust in a brand, and have soaring expectations from businesses.

Across the board, consumers are spending less. Those who are spending are increasingly health and environment conscious about their purchases. Adapting business offerings to increasingly complex consumer needs is crucial to remain stable through and after the crisis.

HLB’s fourth recommendation is basic to survival – cutting costs. Revenues have been drying up for many businesses in light of a global demand shock, and having cash in hand is critical to getting through the crisis. For businesses that don’t have significant cash reserves, and even for those who do, cutting costs is key to maintaining cash flow.

Last of the list of recommendations is to reinvent supply chains. The crisis has blocked supply chains across the globe, opening business leaders’ eyes to inefficiencies. The response has been to consider digitalising parts of the supply chain to make them more efficient on the one hand, while many others are thinking of contracting and localising their supply chains so as to minimise risks.

In the context of trade wars and economic uncertainty, global businesses had already begun exploring options for supply chain reinvention, and even to capitalise on changes in the global supply chain. This trend is likely to intensify now, as trade and transportation faces unprecedented disruption.

So business leaders have a lot to consider. The good news is that most businesses appear to have started moving in the right direction even before Covid-19. “We found that business leaders are well aware of the characteristics of successful business models of the future,” wrote Marco Donzelli, CEO of HLB in the firm's report last year.

HLB’s survey revealed that most business leaders already saw a bottom up, decentralised, mobile and cloud-based operation with a flexible workforce as their business model of the future. The key difference noted in the latest edition of the study is that the speed of change has shifted gear; the pandemic has significantly accelerated progress towards this future.