How to turn the effects of the coronavirus outbreak into opportunities

Effects leading to change

From the beginning of the virus outbreak we seem to have submerged in a surreal world far from our normal routine and predictable outcomes. We can almost consider it a fact that very likely not everything will go back to what it was before, on the contrary. Some changes that we are seeing or experiencing will become permanent and it is important for businesses to ask themselves critically which things those will be. The ways organizations learn from and adjust to today’s crisis will deeply influence performance in the future world, leading to greater agility, closer relationships, and a world in which digital channels become the primary.

Uncertainty

Companies are strenuously coping with prolonged unpredictable demand which will have long lasting effects throughout at least the rest of 2020. The businesses that are now experiencing an incredible drop in demand, such as airlines, will find themselves facing the exact opposite problem in a few months when the outbreak is settling, and people can travel again. Restrained travelling has led to postponement, which in turn will lead to an accumulated demand as soon as the restrictions are lifted. At that point in time, airlines and similar organizations might not have the capacity to fulfill all demand, forcing those organizations to adapt their service propositions.

Digital relationships

Most organizations have shifted their physical operations to digital ones as much as possible. The interaction with colleagues, brainstorming sessions and meetings have moved to online platforms, like Zoom and Microsoft Teams. Also, our relationships with customers and suppliers has changed since physical contact is restrained or even impossible. Schools and universities, for example, have quickly moved lectures and exams to online platforms. They are even experimenting with content that can be on-demand consumed by students. The redefinition of personal contact has led to different social norms to build trust and rapport with one another.

Digital strategy

E-commerce is accelerating faster than ever before. Closed shops and venues, and endless queues at supermarkets ‘encourage’ people to adopt online behavior. Consequently, Dutch supermarkets like Coop and Albert Heijn have seen their online sales figures increase by fivefold. Not only retailers see this drastic shift in behavior and need to adapt. Local caterers and restaurants are collectively embracing an online strategy. Conferences and events are moving to remote settings. And with cinemas, venues and festivals shut down, even Hollywood must change and embrace the digital world.

_________________________________________________________________________________________________

Dutch supermarkets like Coop and Albert Heijn have seen their online sales figures increase by fivefold.

_________________________________________________________________________________________________

Adapting strategies

In a recent survey, about seventy percent of European countries have indicated that the pandemic is likely to accelerate the pace of their digital transformation. In these times of crisis, organizations seem to learn and adapt more quickly than ever before. Now is the time to reassess and speed up digital and innovative initiatives to eventually be more succesful in the future.

Digitization gets priority

Digitization of processes, retail shopping and work has been ongoing for already a decade. For a long time, digital transformation always seemed to make way for operational issues, and short-term goals. The steady growth of online demand has always led to the same steady, but rather slow pace of change. The coronavirus outbreak has however caused turmoil: in a very short period, online demand has literally skyrocketed. Organizations are now working around the clock to adjust their operations and fulfill the drastically changed demand. That also means scaling up supply chains, IT infrastructures, software adoption and data capabilities.

New limits to our adaptability and flexibility

While we might not be enjoying the situation we have been forced into: we seem to be capable of adapting to it very fast. Every day, we are all surprised as well inspired by the way our colleagues, friends and family are combining work, family care and personal wellbeing while still being able to deliver high quality work with a smile on their face. It sheds an entirely new light on our flexibility and our capability of accepting and embracing change, both from a personal as well as from a corporate point of view. One of the silver linings of the virus outbreak is that these latent capabilities have become apparent and have surprised and inspired us to tap into these capabilities in future situations.

_________________________________________________________________________________________________

The coronavirus sheds an entirely new light on our flexibility and our capability of accepting and embracing change.

_________________________________________________________________________________________________

Creativity and innovation at a faster pace

We are also seeing the first bursts of innovation and creativity. On the one hand, all over the world startups and large organizations are coming up with products and services that can directly help governments to fight the coronavirus and to save lives. On the other hand, traditional businesses are under a lot of pressure and need new ideas to pivot their tactics, diversify their offerings and future-proof their business models. Unfortunately but fortunately, in times of crisis, people are naturally triggered to be creative as they are facing uncertainty and flexibility. New services and offerings are appearing into the market in a faster pace than before. The well-known cosmetics retailer Rituals, for example, is experimenting in Amsterdam with options for private shopping on appointment. And event ticketing platforms quickly have reinvented themselves to be able to offer virtual events that have the exact same elements as physical events, including networking and drinks.

Doing it now to prepare for the future

In these times of crises, organizations can choose to be reactive and defensive, and protect the positioning they had, or choose to turn the situation into opportunity to accelerate long due changes, and consider it a sudden glimpse into a future world.
When the dust has settled, organizations will have to prepare for the next normal, knowing it will for sure be different from what it was. These tips might help you to know what you can do now to prepare your business for the future:

1. Discover what positive changes you are witnessing in your business and focus on making solid, long term choices in support of those changes. If for example remote working is something you see value in for the future, invest in secure software and good management practices to support it in the long term.

2. Redefine your priorities: many firms are and will keep experiencing severe losses of revenues. Consider it as an opportunity for strategy alignment by asking yourself what is it that the business and your target market really needs and what is, instead, something you can do without (see figure 1).

3. Collect and analyze data: large online retailers have been reaping the benefits of analyzing, understanding, and exploiting user behavior data for a decade. The organizations that have been ‘forced’ to go digital due to the virus outbreak, now also have the opportunity to collect and analyze large amounts of data and gain insights in their customers and suppliers.

4. Focus on your customers: keep focusing on your customers and find (new) ways to keep them happy. If it holds true that during times of crisis you find out who your friends are, this might apply to businesses as well. Organizations that can keep the relationship with their customers healthy during this difficult situation will witness higher loyalty later.

5. And while businesses may feel pushed into stopping any project that is not directly viable and operational, it is now more important than ever to keep innovating. This does not need to happen based on huge R&D spending but should be done with agile and lean processes that will lead to investments that are paid off in a short timeframe.

To conclude

At some point in time, when the dust has settled, organizations and we as human beings will look back on and feel proud of the cases in which we have shown our creativity and ingenuity. Those abilities and the fast changes have helped us to speed up our transformation to future-proof organizations. We will draw the conclusion that what we have experienced, learned and adjusted during the disturbing times of the corona crisis will have deeply influenced the performance of today and that of the future. It is therefore of utmost importance for organizations to figure out now which changes will be permanent and how to anticipate. Defining and preparing for the next normal will help you to shape the future.

This is an article written by Erica D’Acunto, Innovation Lead and Senior Data Scientist.

Our employees are encouraged to proactively think along with you to cope with the new challenges arising from the virus outbreak. If you have any questions, please reach out to your regular contact person at ORTEC.