Opportunity in Crisis - Covid-19
This principle from Ray Dalio (Chairman – Bridgewater Associates) is pertinent given the current situation of Covid-19. It got us thinking on how could we fit this in the current business context. Penned below are our thoughts, the blog is divided in 2 parts 1. Pain – Understanding of what the current pain is and 2. Reflection of what could have prepared us slightly better (agreed this was a Black Swan event) and lastly we summarise how we can be better prepared for what we all desire, PROGRESS.
Lockdown – Never before in our lifetimes have we seen the entire world in lockdown all at the same time. Aspects never imagined before, cities look like straight out of an apocalypse movie set. Deserted and bereft of any commercial buzz. Almost all commercial aspects coming to a standstill and the focus is live today to fight another day. The economy today is connected like never before and now that all except essential services are shut the impact of this will be across sectors from Manufacturing to Services to Agri. The affiliate sectors comprising of GIG, e-platforms are all hit since no one thought of a business impact wherein movement of humans and good is severely restricted (all at the same time)
Focus on Survival – The focus suddenly shifted from Growth to Survival, gone are the days of unleashing the animal instincts but the sheer survival is now under question. Global Leaders, Institutions are conjecturing at best. Foresight is Hind-bound but it’s not helping at this point. No one is really sure when the recovery will start and consequently the purse gets tightly clenched and all but essentials are to be expended.
Isolation at Individual and Country level – Remember Friedman talking about World is Flat, all we want to do now is Flatten that curve and it seems isolation or social distancing if you will is the only way. While this is required at this point, will it leave long lasting scars and usher in a new paradigm where human interaction is safeguarded by techno boundaries? Isolation = Less Interaction = Reduced Commerce.
This seems like a Long Tunnel – Is there light at the end? – Goldman says 34% contraction in US Economy or will we see further contraction. How will US and EU play-out. Crude is down to lowest levels in a long time, will VC/PE funding get contracted further. Banks are anyways under stress. How long and How Far – Your guess is as good as ours
In a Hyper connected world we are not isolated – When chips are down across, all we need is a rising tide to lift all boats. We believe the proverbial rising tide will come from collective human consciousness. The silver lining in all this – Realization that we are in this together as a race, never before has this been as stark as now. Nations, Institutions and People all coming together – The solution can’t be that far.
Business like Humans are interdependent - Expanding from point above, while business models will undergo a fundamental shift our adaptability will be the biggest virtue to have at this point. The leaders will support and lift ancillary businesses, supply chains will become more cohesive and agile as we move ahead. WIN-WIN will have to be the operating mantra. Win-Win for customers, employees, shareholders …everyone
Survival over growth – Customer Acquisition, Burn Rate, Businesses artificially propped up will all be relooked at. It’s time to get to business fundamentals, Unit level profitability & predictable operations (the unsexy entity) will define survival. Who Knew Darwinism was applicable in commerce and economy too
Predictable environment is what we desire but Chaos is what we have to navigate - Never before has the chasm between desire vs reality been so evident. VUCA just became the new normal and not just a catch phrase. How equipped is our individual thinking and by extension organizational ability to manoeuvre in ambiguity and darkness with hope being the primary “guiding light”
All crisis force us to look at uncharted territories and explore the unknown and ambiguous. COVID-19 like all crisis before presents us a unique opportunity, we list some of those:
Revisit Business Processes: This was Black Swan event for sure and it seems such events happen every decade almost (recall 2008). How agile are the business processes to adapt to such shock. A well mapped and documented process help in remote deployment and establish clear controls mechanism when office working may not be the norm
Lean Start-up – There was no time like this which will force all business owners to look at pivot opportunities – Automobiles manufacturers making ventilators. What are your pivoting opportunities
Pay per use – Increasing cost pressures and purse tightening being the norm. Why look at legacy models like hire and use. Instead pay per use… with rising unemployment gig workers will rise and therein lies the opportunity. In addition, outsource non-operating roles like Analytics, Business Intelligence and Program/Project Management
Relook at your customer – How have your customer needs evolved/shifted in last few months. Do you have a handle / view on it? There was never a time like this to use Design Thinking and remodel your business in the new paradigm.
Last but not the least – empowered employees – may not remain something left in presentations. What will be impact of “work from home” for this long a period, even in companies where this was looked down upon, will this become a norm. Are the managers, systems, and processes geared up for the change? We are sure this would change and employees
As a company we are geared up to assist you to reflect, plan and gain some notches on competition.
Reach out …lets chat