Seven Lessons from the Corporate Frontlines — during the Covid-19 fight phase.
The 7 lessons are:
- Stabilize Manufacturing & the Supply Chain
- Manage Costs, Cash & Liquidity
- Organize Your People for the New Reality
- Manage the Top Line & Drive Customer Engagement
- Accelerate Digital & New Ways of Working
- Drive Strategic Advantage in Adversity
- Partner with Government and Society
As countries across the globe emerge from economic lockdown, companies are now entering the second, or Fight, phase of the COVID-19 crisis. This is the phase in which they will need to consolidate and forge a transformation plan (or map scenarios) that will position them to seize advantage in adversity. In China, where COVID-19 has been reined in and business is resuming, companies have already started down the road to recovery. What can others learn from their experiences?
To find out, BCG recently studied more than 100 companies that are on the other side of the curve. Through analyzing their response to the extraordinary and unrelenting challenges of the crisis, we have distilled seven lessons-illustrated through a sample of companies whose rebound strategies and bold actions have enabled them to successfully resume operations.
The lessons tend to be broad, cross-functional, and relevant across industries. Well before the economies in which they operate reopened, the companies highlighted here moved decisively to safeguard their workers, secure their customers, shore up funding, seek alternate supply sources and routes, and shift to e-commerce and digital channels (some almost overnight). Many have advanced themselves by giving a leg up to the stakeholders and ecosystem partners that contribute to their success. Others have stepped in to provide support and resources for their governments and the public.
By presenting these stories, we aim to help companies transition promptly and purposefully from crisis mode to stability, and to help them adapt to the new reality. In this most uncertain and unprecedented of times, these stories can give hope and direction to companies just starting to resume operations and re-engage with the world. Read about our seven lessons below.
Stabilize Manufacturing & the Supply Chain
To stabilize manufacturing and the supply chain, nimble companies take three broad steps. They ensure transparency in the supply chain-exploring alternate delivery networks, identifying multiple suppliers, monitoring changes in the supplier and distribution ecosystem-and adjust accordingly. These companies also implement a dynamic supply and inventory management process, redirecting supplies to high-demand markets and revising product-purchasing plans to optimize inventory levels. They ramp up production to meet changing demand, which among other things, entails repurposing production lines, keeping suppliers in the loop, and enhancing operations through shift adjustments and digital technology acceleration.
Manage Costs, Cash & Liquidity
With revenues and cash flow squeezed, resourceful companies move swiftly to consolidate their financial position. They know that speed is crucial to success, particularly in a downturn. Through a central team, they streamline costs according to strategic necessity, guided by a zero-based budgeting mindset. They make structural changes to amass cash, ensuring they have the resources in place to ramp up their digital capabilities and the reserves to capitalize on buying opportunities.
Organize Your People for the New Reality
First and foremost, standout companies implement strict safety and security measures to get employees back on the job safely. These measures include requiring physical distancing, conducting health checks, providing protective equipment, and crafting protocols for potential outbreaks. These companies adopt smart ways of working such as allowing remote working on a longer-term basis and providing the infrastructure and tools needed to enable their people and teams to work effectively. They also take steps to build a more flexible workforce, in order to maintain productivity while keeping people motivated and engaged.
Manage the Top Line & Drive Customer Engagement
In facing the abrupt, often radical, changes in customer behaviors, savvy companies promptly shift gears, adapting and transforming channels. For some, this moment prompts their comprehensive, long-delayed push into e-commerce. Companies ramp up their commercial efforts significantly to seize market shifts. They apply data-driven insights to guide them in accelerating their digital capabilities. By tapping into social media and with the help of third-party partners, they keep existing customers engaged and spending, and forge connections with new ones.
Accelerate Digital & New Ways of Working
Rapid shifts in demand mean companies need to accelerate their digital transformation efforts. Companies primed for the new reality ensure customer touchpoints are digitized, and they redesign customer journeys and sales processes accordingly. They introduce contactless delivery of products and services. They create new ways for their people to create, innovate, and interact, internally (across business and functional areas and regions) and externally (with customers, suppliers, partners, and other stakeholders).
Drive Strategic Advantage in Adversity
Proactive companies read the signs and seek ways to capitalize on their strengths in this ever-shifting environment. They identify untapped areas of opportunity within their own industry and ecosystem and selectively invest in areas where opportunistic M&A is possible. They plug capability gaps and develop strategies for exploiting the growing availability of talent. Some decide to move boldly to shift their portfolio of products or services as new opportunities arise.
Partner with Government and Society
Astute companies recognize that contributing to the fight is both good citizenship and good business. They offer resources and expertise in whatever ways they can, whether through their medical response, by supplying essential goods for society, or by playing a positive economic role. Many help by supporting government policies and responses, shifting production to critically needed supplies. Some help keep workers employed, some ease payment terms for customers, and some extend financial aid or create backstops for cash-strapped suppliers. Others use their innovation prowess to focus on solutions to the COVID-19 crisis or cures.
The team would like to thank Suzana Amoes (senior associate, Luanda), Yanga Tyikwe (knowledge analyst, Johannesburg), and Ibrahim Zaaimi from Infomineo for their contributions.
If you’d like to learn more about how the 100 companies we studied have set themselves up for success in the new reality, please contact one of the authors.
Originally published at https://www.bcg.com on July 21, 2020.
Seven Lessons from the Corporate Frontlines
As countries across the globe emerge from economic lockdown, companies are now entering the second, or Fight, phase of…
Edited for Brazil by
Joaquim Cardoso do Rosário
Senior Advisor of Healthcare @ BCG — Boston Consulting Group.
São Paulo Office, Brazil.