Whether you consider Coronavirus as being the “ultimate black swan event”, or more accurately a “grey rhino”, pulling the world through this particular crisis will take more than just looking for lessons in the past. Rebuilding the business landscape for lasting success is going to mean preparing for an ever-more digital, eco-friendly, and entrepreneurial future. It is also an opportunity to gently nudge companies to uphold moral standards.
Coronavirus is being dubbed1 a “grey rhino” event and not without reason. Rapidly disrupting everyday life and sending the global economy into the worst2 recession in almost a century, it fits the bill of a colossal crisis that seemed impossible, until it wasn’t. And looking back to when the spread of the virus was first identified as the pandemic it was, in hindsight it’s clear to see the signs were there.
But comparisons to grey rhinos or ‘unforeseen’ events from the past only take us so far. Looking to historical events does offer positive proof that the world and its financial systems have made it through tough times before. In fact, the 28%3 decline in the Dow Jones experienced at the end of Q1 this year is significantly eclipsed by the drop that came with the Great Depression (89%), and to a lesser extent the more recent Black Monday (31%).
Although unique in its own way, and with obvious repercussion, the 2020 pandemic has also brought about significant, positive change – from massively accelerated rates of digital transformation to a greater focus on environmental issues.
Fuelling this particular recovery will mean recognising these distinctive changes and taking steps to harness the opportunities they offer. Companies hoping to protect the business landscape and secure their place in it must therefore get to work on reshaping their models and processes for the new, post-pandemic reality.
Entrepreneurs will grease the wheels of recovery
While COVID-19 has brought some companies to a halt, others are finding different ways to keep moving. Distillers in the US4 are switching to production of hand sanitiser. Fashion brands such as Germany-based Trigema5 are swapping leisurewear for protective gear. Entertainment companies in Denmark6 are holding drive-in gigs. What these smart adapters have in common isn’t just a flair for problem-solving, but also an entrepreneurial spirit that will be essential to power future prosperity.
In times of turmoil, companies that rise to meet changing market conditions and consumer needs with creative solutions are crucial to keeping the wider economy going. And this doesn’t just mean big corporations. As noted in a paper7 on entrepreneurship by the Robert Schuman Foundation, start-ups are often the unsung heroes of recovery: playing a “fundamental role in reviving growth” and bringing societies through crisis.
The turbulence sparked by COVID-19 presents multiple openings for entrepreneurs, whatever their size. In fact, smaller businesses may find their flexibility, lack of extensive capital investments, and easily adjustable models give them an edge over larger players; especially in the increasingly digitised world. There are significant gains to be made for those who can use digital technologies to minimise running costs and boost agility.
Key among the obvious areas in need of innovation are healthcare, finance, and education, and a variety of start-ups are answering the call. That includes the COVID-19 tracker app8 developed for Iceland’s national healthcare system by Sidekick Health, the online platform created by Kry to remotely connect patients with medical professionals in Sweden, and the free online training pack built for caregivers by Swiss e-learning platform, Coorpacademy.
But the potential for entrepreneurial efforts stretches much further. Many small players have already moved to fill specific niches created by the challenges of lockdown and strict social distancing; from home-delivery crafting kits9 and workout apps to digital takeaway services. In the coming weeks and years, we’re going to need plenty more of these independent pioneers.
Understanding the value of data
The value of data continues to appreciate as an asset. It is ever-increasing in quantity and in a digital landscape, where customer behaviours are constantly changing, marketers need stronger forecasting capabilities to allow their teams to stay agile and focus on actions that drive results. Many companies have been forced to accelerate their digital transformation and adopt a new mindset, to ensure their survival during COVID-19. Those companies with the ability to continuously analyse data during the pandemic were able to react quickly to the resulting fast moving and ever changing customer behaviour. For example, while many found their holiday plans had been disrupted, retail trends showed people still had intentions of taking a vacation – as indicated by the increase in online searches for inflatable swimming pools and staycations. Couple this with the 87%10 of marketers still claiming data as their most under-used asset, and the race to implement a robust digital transformation strategy has never been more important, as companies realise the opportunities that come with access to real-time data insights, at speed.
By adopting technologies that automate data preparation, reporting, and analysis, marketers are able to rapidly process data – at scale and with greater accuracy – and reallocate their time on more impactful tasks. For example, Vodafone Italy’s digital marketing team was able to transform their campaign data reporting and reduce waste by 75%. We helped Vodafone by unifying its offline and online data sources to extract and analyse campaign performances in a quicker and easier way – previously data reporting was a time-consuming process as analysis for decision making was often done manually.
Using data technologies to keep ahead of market changes and be proactive in responding to them is essential for freeing up the time and resources to ensure marketers can continue innovating their position in what is a dynamic and competitive space.
Remote working requires a cultural rethink
Another coronavirus-triggered change is, of course, the rise of remote working. As recently as last year, only 61%11 of companies allowed some form of home working. Now, the number of remote teams has skyrocketed across the globe — with around half of all workers in both the UK12 and US13 estimated to be logging on from a distance, and officials in Japan aiming to reduce commuter volumes by 70%14.
These numbers will inevitably fall once the storm passes, particularly as retail stores reopen and face-to-face service resumes. But it’s also likely the mass adoption of remote working will have a lasting impact; inspiring more companies to go permanently remote-first or blend home working options into their new business set up.
From the start, Adverity has been a practitioner of blending a strong office culture with the freedom to work from anywhere. We find this mix advantageous as it gives team members the choice to be productive in an atmosphere that best suits them, while ensuring the benefits of the office environment, such as face to face interactions, are not neglected. Having this embedded in the way the company operates has been key to our success in easily transitioning to the “new working norm” during the pandemic. It meant our team could get on with their work without the technological disruption many businesses experienced and, just as importantly, they were already versed in how to conduct themselves professionally with clients in virtual meetings without requiring a period of adjustment. Many businesses already lend themselves to the office-and-working-remote model, while others need to adapt; in any instance the pandemic is forcing businesses to assess and adopt new ways of working.
The relationship with the office is changing in other ways too. Morgan Stanley CEO James Gorman has already hinted15 the banking giant will hold “much less real estate” in the future, as the pandemic has illustrated it can operate just as effectively with a smaller footprint and less expensive office space. And Gorman isn’t alone; Twitter has also announced16 all employees can now work from home forever, if they choose.
As a result, it will be crucial to adjust to the changes in corporate culture. Alongside efficiencies, the sudden virtual transition has created complications for leaders and employees used to office-centric working; with the challenges felt most heavily in the US. Studies show two in three17 US managers are finding it hard to keep up morale, while more than half18 of workers say their jobs are harder than they were before the pandemic.
Maintaining high performance and engagement is going to mean building new avenues of connection. As well as upholding a constant line of direct communication with their teams, business leaders will need to implement initiatives that allow for organic conversations and help employees to grow; whether that includes holding idea sharing video conferences, personal development sessions, or social events such as online talent shows.
Additionally, it will be critical to ensure all workers not only have the basic means to work from home, but also the capability to do so efficiently. Going halfway down the road to digital transformation by installing computers and cloud-based networks isn’t enough; companies must also build a robust infrastructure that incorporates the key ingredients for streamlined virtual working, covering everything from collaboration platforms to systems for billing and documentation.
But making working from anywhere a success is not only a question of technology, it’s also a question of motivation and trust, as well as about attitudes towards working collectively as a team.
The business future is set to be greener
When it comes to the unexpected benefits of COVID-19, few examples are more potent than the reappearance19 of the Himalayan mountain range in skylines across India, for the first time in 30 years. As lockdown stopped travel and industrial activity around the world, air pollution also plummeted: dropping by 60%20 in Delhi, 71% in Los Angeles, 56% in Madrid, and 34% in London. China, previously the highest producer of carbon dioxide, saw levels fall by 25%21.
These figures prompt some convoluted questions, as well as celebration. We’ve proved our environmental impact can be dramatically reduced but figuring out how to sustain these positive effects will be a challenge once the globe goes back to work.
For businesses, the best next step is aiming to stay as green as possible; and not just for the good of the planet. Research has found companies actively managing their carbon emissions can see up to 18%22 higher return on investment than those who don’t, and commitment to eco-friendly practices is also increasingly important to consumers: cited by 37%23 as a major factor on purchase decisions in a recent international study.
At a functional level, that’s likely to involve holding onto green habits established amid current restrictions. It almost goes without saying that keeping new digitised procedures will be at the top of the list: remote working to cut down on emissions from employee commutes — as well as the energy consumed by physical workspaces — and more virtual meetings with clients regionally and globally. Zoom has negated the need to rack up air miles. For those still in the office, there is scope for small changes to go a long way; from encouraging use of washable fabric face masks to replacing plastic materials with sustainable alternatives, even recycled24 post-it notes can make a difference.
Taking a wider view, embracing the green finance movement and making more substantial commitments to limiting impact could reap significant rewards on multiple fronts. Global authorities are dialling up financial support for eco-centric initiatives and financial systems; including the European Union and its “Renewed Sustainable Finance strategy” 25. With high ambitions to not only make the European economy greener, but also expand the worldwide scope of environmentally friendly finance, the initiative forms part of a €1 trillion package that’s striving to bolster green investment and fully integrate “climate and environmental risks into the financial system.” And investors are following this trend closely. According to Bloomberg, investors are shifting more dollars towards green businesses and companies working to enhance their sustainability efforts; with investments rising to $30.7 trillion26 in 2019 alone.
For all the parallels with the black swans that have come before, it’s important to remember this crisis isn’t an exact repeat. There are specific challenges that will need to be addressed, as well as new possibilities for a different kind of recovery.
Companies will need to accept that many aspects of the way we work won’t be going back to normal; and that’s not necessarily a bad thing. In the revamped business landscape, there will be more potential for agile small players to find their position of strength and make a vital contribution to the overall economy. As temporary changes turn into longer-term practices, it will also be critical to hold onto the bonuses of lockdown — including increased remote flexibility and cleaner air — and fine-tune processes to keep leveraging them effectively.
The mass disruption caused by the pandemic has given the world a chance to rebuild and improve the business landscape, both in terms of practices and the environment. We must ensure it isn’t wasted.
About the Author
Alexander Igelsböck is the CEO of Adverity. Data based efficiency has driven every stage of Alex’s career. From the creation, growth and successful exit strategy applied to the multiple companies he has been involved with, to his latest role as co-founder and CEO of intelligence platform Adverity, powering smarter decisions with accurate analysis remains a key passion for Alex.