What are the requirements for restarting businesses and making it work?
The survey by Mckinsey defines seven action points that are a major concern across industries.
From sleeping in office to effective remote working
Remote working has become accepted and employees have gradually adapted themselves to remote working. However, not everything can be done remotely. There are many challenges like training, productivity loss. Remote working is more than giving a workstation/ laptop to the staff. We need to follow the norms followed in normal office - once we leave the office the work is done for the day.
For remote working to be sustainable, the corridor chats can be replicated by the chat forums, set office hours and follow it, and announce there is no need to reply immediately to messages, emails beyond office times.
Collaboration, flexibility, inclusion, and accountability should be accelerated now and it becomes especially important when remote working has become the norm.
Remote working which means no commuting makes it easier for disabled people., the flexibility can be helpful for parents with young children or aged who need to be cared for.
From silos and lines to networks and teamwork.
Companies should put together teams, with only the necessary people, with a defined mission, a sense of urgency, will improve interactions and quickly to solve problems and forget the turf wars.
Start locking in the practices that speed up decision making and execution.
Accelerate the transition to agility. Agility essentially means to reconfigure strategy, structure, process, people, and technology towards value-creating and protecting opportunities.
It is seen that agile companies are more decentralized and depend less on top-down decision making.
They are accountable in terms of tracking and measuring precisely stated outcomes
Companies should have a flatter decision-making structure to make quick decisions.
Another aspect is to think of ecosystems rather than separate units. Companies that establish better ecosystems with suppliers, customers, partners, vendors can find ways to work together as it is built on trust.
Finally, agility becomes meaningless if it does not have data to back it. Companies should speed up its analytics to provide a basis for answers.
From just-in-time to just-in-case suppliers
Just-in-time inventory with dependence on a single supplier makes the company vulnerable to disruption during a crisis. Companies should ask the question, how can we forge a supply chain that creates the most value. Speed still matters but resilience is equally important. This may require adopting new digital planning and supplier risk management tools to enable companies to react well to changes in supply and demand conditions.
From managing for a short term to capitalism for the long term
Start focussing on leadership and working with partners to create a better future. Top management should start thinking of how soon should a CEO be replaced. The average tenure is 15 years. Close communication with their boards allowed CEOs' to get through the rough patch and go on to lead long term success.
Sales teams are used to getting new targets based on previous years' results, whereas it is better to define what is possible based on market size, current market share, competition. This would be a better metric to decide on sales potential.
Previously infrastructure meant roads, pipelines, etc. Today there is a clear case of building a robust, universal broadband infrastructure with a rise of digital technologies. those without access to reliable broadband will get left out.
With the job requirement changing and veering towards digital technologies, displaced employees need to be retrained, so that they can find, succeed in the new jobs that will emerge.
From making trade-offs to embedding sustainability.
Stop thinking of environment management as a compliance issue. It is a core management and financial issue. Rising dangers due to flooding, earthquakes, wildfires lead to increased insurance payouts and could affect the global supply chains and food security. Companies should reengineer their supply chains for resilience and consider the environmental aspect too. Investing in building resilient infrastructure will more than payback in the long run.
Accelerate investment in innovation, partnerships, and reporting. A Data-driven approach can highlight the cost of maintaining an asset. Climate management should be made a core corporate responsibility and reap the benefits. The correlation between going green and savings is strong.
From online commerce to contact free economy.
Health care has been a great example of contactless operation. This helps in giving the staff more time to attend to urgent needs and patients getting high-quality care. Medical consultations are mostly online today. Medicines and pharmacies are fully online as also most banking transactions. Education, right from schools to university studies are mostly online.
Accelerate the transition of digitization and automation. Consumer stores have become mostly contactless. Car showrooms are virtual giving customers a realistic experience, airlines and car-rentals are developing contactless journeys.
Manufacturing provides a bigger opportunity and the use of robots and IoT devices to devise safety strategies, improve collaboration with suppliers, manage inventory, optimize procurement, and maintain equipment. The application of advanced analytics can help companies to get a sense of customer needs without walking the factory floors.
From simply returning to returning and reimagining
The un-lockdown will be gradual, determined by the government. Companies will have to focus on four areas - recover revenue, rebuild operations, rethinking the organization, and accelerating digital solutions.
New and fast-improving digital tools will reduce the cost of operations and foster flexibility. Companies that accelerate these efforts fast and intelligently, will see the benefits in productivity, quality, and end-customer connectivity.
Companies can create a plan that illuminates what needs to be done to reach a stated goal, guarantee the resources to reach that goal, train employees in digital tools.
To accelerate the road to recovery leaders need to instill a spirit of both purpose and optimism and to nake a case that even an uncertain future can, with effort, be a better one.
From thinking about the next normal to making it work: What to
by Kevin Sneader and Shubham Singhal McKinsey May 2020
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