The Business Transformation Race Has Already Started – Are you Leading or Still Warming Up?
We recently hosted a virtual leadership summit, “De-Invest to Re-Invest,” which focused on the unprecedented business transformation challenges companies are facing amid the COVID-19 crisis. Clients, partners, and friends in the industry came together to share insights and expertise for not only managing change during this time, but actually driving change.
Tom Furphy, Replenium’s CEO, opened the summit with some enlightening remarks. “As companies, we tend to think about business processes, data, and different capabilities day in and day out, but ultimately we’re all humans here. We’re all revisiting how we engage customers, staff our companies, run our supply chains, apply technology in our businesses. And with all this rapid change coming at us the stakes are really high right now. There is no playbook for times like today. As we look to move forward, we have to to stop doing some of the things we’ve been doing, and start investing in some of the things we should be doing.”
Each session of the summit provided critical observations about what is happening within industries currently, and what is expected to come. In the upcoming weeks, we’ll be sharing a series of blogs covering all of the topics discussed.
To begin, we turn to The Dialogic Group’s Thom Blischok, who shared findings on how C-level executives are making (or should be making) business adjustments during the COVID-19 pandemic.
Operating in the Now
Blischok’s presentation was based on conversations with approximately 40 C-level executives (retail, CPG, distributors, and service providers), who are in the depths of the pandemic’s fallout. Instead of focusing on future solutions, Blischok urged companies to consider our current state.
“Looking at the market today, you see hundreds and hundreds of story lines about ‘what’s next.’ This de-invest to re-invest story is about what’s now.”
One concerning revelation that came out of the conversations with executives was a clear disconnect between ongoing concerns and their overall prediction for operating in the new norm.
50%+ expressed concerns about future survivability in their current form
60%+ believe their organizations lack the skill set to compete in the future state
71% indicated they must radically improve and/or simplify organizational and operational decision-making
74% do not think their organizations can adapt quickly enough to a rapidly changing future state
And yet, 91% believe they will be able to compete and grow in the new normalcy. How does that compute?
Upon digging deeper, Blischok and his team began to understand the opportunity for a different kind of leadership, post COVID-19.
3 Key Initiatives to Implement Today
From Blischok’s research, three key initiatives emerged—particularly in light of the fact that despite the thousands of predictions, we are still very unclear about what the future state holds. Those three initiatives are:
Cash Conservation: managing cash is going to be critical to adapt going forward.
Modernization of the Operating Model: the current structure of organizations will not sustain itself in the coming months (and years).
Competing in a New Landscape and Partner Ecosystem: in this new ecosystem, you don’t have to own everything; you don’t have to buy everything.
Ultimately, Blischok and others’ recommendation is to de-invest 30-35% of infrastructure, legacy systems, and processes and apply a 15-20% reinvest to become a much more competitive and financially successful organization.
Time Is NOT Your Friend
Looking at consumer behavior, workplace protocols, and retail operations, it was clear that all will experience lasting change to some degree. Several “traditional” behaviors and habits are forever altered.
The consistent thread throughout all of Blischok’s analysis was this: time is not your friend. In the next 30, 60, 90 days, organizations should be planning both best-case and worst-case scenarios. They need to be modeling ongoing cash needs for both operations and investments. Finally, organizations must begin an organizational and operational transformation to a new, streamlined operating model.
“This is not a plan for panic, and it’s not a plan for survival,” stated Blischok. “It is a plan for real and profitable growth.”