When walking along empty city streets during lock-down, a common sight was the “Closed for refurbishment” sign sitting in the front of restaurants and shops. From re-painting the walls to replacing decades-old furniture, many venues decided to make the best of the situation by finally carrying out the much-needed works they had been comfortably ignoring for years.
In a new report, research firm Forrester warns that every company should take a similar approach and overhaul their processes and prepare for the next ten years.
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According to Forrester analyst Laura Koetzle, who co-authored the report, many companies were successful in keeping their businesses afloat for a few months after a mad rush to switch to remote working in the initial weeks of the crisis. But now is not the time for coasting.
“We can see some companies who have got things to a stable place, and are adopting a ‘wait and see’ attitude,” she told ZDNet. “And then a bunch of businesses are forging ahead, determined not to waste the opportunity.”
“They are thinking: ‘Look, our finances are terrible, no one is expecting us to be brilliant in the next quarter, so we might as well spend some time and money doing the thing we really need to do.’ We would argue that this path is better,” she added.
And what they need to do, according to the Forrester analyst, is hold on to the lessons learnt from COVID-19: the 2020s are looking to be ripe with uncertainty, and the winning businesses will be those that can adapt to any type of unexpected emergency.
Forrester’s research assumes that the world will be living with COVID-19 for the next decade; but the current pandemic isn’t the only potential crisis looming. Other disease outbreaks should be expected, as well as climate change-related disasters and even geo-political unpredictability.
In this context, Koetzle argued, companies have to radically re-design their priorities. Where business used to be all about efficiency, the guiding principle for the next ten years will be agility.
“What you want is slack in the system,” said Koetzl. “The supply chains we’ve designed over the past decade are made to be efficient. But in an environment where things are changing quickly you need to be able to change without it being prohibitive, and this might mean being less optimized for some time.”
The good news is, a few months ago most companies were forced to introduce forward-looking practices anyways, as they shifted entire workforces to remote working in response to the COVID-19 pandemic. Now, these organizations are faced with two options: go back to their previous ways as lock-downs lift, or bounce off the changes precipitated by the pandemic to tackle the more intimidating task of complete modernization.
To provide an example of good behavior, Koetzl points to leading beer producer Carlsberg. As soon as the Danish company’s leaders started anticipating a lock-down, a full-on crisis mode was activated, and five squads were created to drive the business through the pandemic – but also to start thinking, from day one, about what would come after COVID-19.
The first squad was dedicated to making sure remote working remained operational at all times, but all of the other four were asked to look at the future. One group studied the best ways to use the slower pace imposed by the pandemic to improve the business overall; another one was tasked with identifying the technologies implemented during lock-down that could be used even once the crisis passed, such as digital signatures or project management portfolios.
A fourth squad was set up to look at processes, to find out how operations could feed on the learnings from COVID-19 to become quicker and more agile. Lastly, one team analyzed supply management, to assess if the supply-chain was resilient and secure enough, and to devise ways to make it more crisis-proof in the future.
In their latest report, Koetzl and her team advise on various other decisions that business leaders can make to stay ahead of the game. Re-platforming old systems and replacing them with modern, cloud-based ones that are more flexible is a must; and so will be leveraging technology to carry out advanced risk management and third-party risk evaluation.
“Lots of firms used glorified spreadsheets to do all the planning, and hopefully this isn’t going to cut it anymore,” said Koetzl. “The companies that make themselves more flexible to respond to whatever the next systemic shock is will be far better off.”
Firms should reduce their dependence on extreme offshoring and outsourcing to vulnerable regions, therefore, while welcoming automation and AI to erase inefficiencies, according to the report.
But one of the smartest decisions that businesses can make right now to improve their adaptability, is to strongly support and encourage their remote workforce. It is easy to see, indeed, why companies that introduce a permanent “work-from-anywhere” ethos will fare better than others the next time a global shock comes around, and displaces the office once again.
Businesses, for the most part, seem to be aware of the need to implement change at scale. Forrester anticipates that firms will shed more than a quarter of their city-center office spaces in the next few years.
And another recent report by IT firm Riverbed showed that 72% of business leaders had plans to make additional investments during the next year to make sure they could support a productive remote workforce.
Yet the digital transformation that experts like Forrester’s analysts pledge for is not an easy journey, and it is still likely that some firms will choose a different path. This is especially the case if decision-makers don’t feel much pressure to change.
“If you are in a sector that wasn’t particularly disadvantaged by the pandemic, there’s going to be some temptation to take the short-term gains and walk away,” says Koetzl.
The analyst remembered a client working in the life sciences field, whose team has been “madly busy” during the past months doing research and scaling up production. The business was running well, but against all expectations, the company came to Koetzl’s team out of concern that it might fall behind other players.
The analyst explained that the firm felt there was a risk of complacency; that even though they were fast and healthy now, they might not be focusing on the right challenges.
“They were worried because this won’t be the last systemic shock,” said Koatzl. “A new one might come, and you may not be privileged by this one because of the sector you’re in. So you would do well to focus on doing the hard work now so you’re ready for the next time.”
Making those decisions will require strong leadership – and the recent crisis has seriously fast-tracked some processes that would have previously taken months or years. A few months ago, millions of employees were sent home to work remotely almost overnight; in that light, there isn’t much in innovation projects that can scare business leaders off anymore.