COVID-19: Finding new growth in a time of crisis

April 24, 2020

COVID-19 has swept the globe, spreading uncertainty and upheaval wherever it goes. These are undoubtedly anxious times, in which leaders are worried about the health of their families and employees, first and foremost, yet are also overwhelmed with business challenges.

This is no ordinary economic downturn: Fundamental changes in consumer behavior, supply chains and routes to market are knocking companies off balance. Suddenly, it’s impossible to forecast and analyze trends. Traditional benchmarks and insights used to manage the business are suddenly obsolete. While uncertainty rules the day, it is possible to take back some control by protecting your company and taking better care than ever of your customers and employees.

“Never normal” might be the new normal as leading companies learn they indeed have the ability to outmaneuver uncertainty in rapid cycles. We have some clear guidelines for what companies can do right now to regain stability and what’s needed to create growth in the future.

Protect your core revenue and take care of your customers now

Although there is no proven playbook for this moment, past crises are instructive. Retention is the first step. The American composer Stephen Sondheim once wrote, “To get what you want, better see that you keep what you have.” Listening to and meeting your core customers’ needs is foundational. What sets apart those that will thrive in the aftermath is their ability to anticipate market shifts and react and adapt to new customer needs in real time.

We offer three clear actions for leaders:

Create visibility into a fast-changing environment

Historical models and data are no longer useful. Ongoing and localized insights into shifting customer situations, behavior and demand patterns are crucial. Look for unexpected trends and assess new leading indicators, like public health data.

Reimagine services to meet evolving customer needs

The ability to quickly tailor existing products, offerings and services to new consumer needs is essential. Prioritize the right customers and prepare an investment plan to rotate to digital, make digital human and team for last-mile distribution.

Establish a nimble (and virtual) operating model

Customer treatment strategies, messaging and offers should evolve with behaviors. Reassess customer contact and adopt an innovation mindset to capture opportunities. Avoid being trapped by legacy costs and investment allocations. Repurpose assets to enable new business models by assessing existing investments, pricing strategies and physical assets relative to local conditions and demand.

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Find new growth paths next

The future will belong to the prepared. While it might sound counterintuitive to spend time today identifying the new growth paths, lessons from the past two recessions suggest companies that balanced growth and cost management outperformed their competition in the aftermath.

To be ready for what’s next, prioritize three goals:

View your business through a customer lens

This crisis offers a unique chance to build trust with customers and reset around their needs, including how they want to buy and receive service. Be careful not to be seen as exploiting the situation, even as a byproduct of responding to more demand.

Rethink your channels and ecosystems

Business model flexibility is crucial. Decouple the core to allow for unencumbered new models and governance. Ecosystem partners that allow for experimentation and rapid scaling will be key. Look at adjacent businesses and study how they're adapting to the current situation. Pursue unique opportunities to acquire assets, IP and talent in the search for new growth pathways.

Define a portfolio approach to invest wisely in what’s next

Economic downturns require portfolio-minded investment decisions. Apply a hedge fund mindset across your business units, brands, functions and key partnerships. Evaluate how consumer experiences are delivered to prevent investments from being trapped in an individual silo. Reconsider alternative pricing and payment models. Apply new demand-sensing capabilities to inform key investment decisions.

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Shift your long-term corporate strategy for the never normal

To position their companies for growth in the recovery, leaders are now thinking about disruption more pointedly and are strategizing to make their organizations more resilient and competitive.

As you think to the more distant future, which may not be “business as usual,” we encourage you to consider three possible actions:

Stress test the business ecosystem

Disruption occurs along the fault lines of an industry’s ecosystem. Prepare for cascading consequences that can destabilize historical competitive advantage. Embrace uncertainty and “wargame” scenarios centered on plausible business futures.

Rebalance commercial investments

Determining how to rebalance commercial investments is one of the most important decisions to make in the months ahead, but don't overdo it. A rush to radically scale back customer investments often leads to unintended and detrimental consequences that can only be seen clearly in hindsight.

Build for resiliency

Future survival hinges on business resilience. Accelerate your strategic ambition, acquire differentiating capabilities and place growth bets at a time when others are retrenching and recovering at different rates.

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COVID-19: A new era in customer engagement

Make the impossible your guide

We’ve learned “what can be done.” Appliance companies and auto manufacturers can design and manufacture ventilators in 10 days, alcoholic beverage companies can produce hand sanitizer, fashion brands can manufacture masks and tobacco companies can support clinical trials to find a cure, all within days and weeks. “What can be done” has been reframed.

We’ve also learned we have the capabilities to innovate, collaborate and succeed at a rate assumed to be impossible. Will we return to 18- or 36-month product lifecycle development processes? How will CEOs react the next time someone says, “that’s impossible”? We cannot unlearn what we’ve learned. It’s up to us to apply these newly revealed capabilities to our business and our lives.