With the announcement of the state of alarm and our confinement by the Spanish government on March 13, 2020 led to a change in our habits that had adifferent impact on many businesses. In this article we would like to analyze the options that companies have in their domain to adapt to these changes and try to follow a path of growth.
Changes in habits take 21-66 days to occur and the first exercise companies should do is to see how these new practices are changing the industry they are in. As an example: with confinement the demand for live entertainment has disappeared, while digital content has increased.
Once the change is identified, the next step would be to analyze the duration of the change. Is it only a short term movement or is the change there to stay? The increase in book consumption in the months of confinement is believed to have been circumstantial, while the increased use of streaming or broadcasting platforms is a consequence with more structural profile.
Phase 1: Diagnosis
To identify the nature of the changes, companies will need to intensify data analysis. Today, there are many tools that allow us to improve a lot in analysis such as data regarding traffic, expenses, use of online commerce, etc. A drop in sales in a store prior to COVID-19 can point to another problem that has been intensified by confinement and nota consequence of the economic slowdown.
In addition to analyzing the data, companies should talk to the different stakeholders in the industry to identify how the market is behaving: What are the segments that are showing the most growth and the most profitable, what is the typology of the products that our competitors are launching into the market, how are markets recovering in countries where COVID-19 is already in a more controlled phase (Asia)?
Phase 2: Planning and execution
Once the “new normal” scenario has been identified, companies must adjust their value proposition in order to position themselves adequately for these changes, trying to answer the following questions:
- ¿What should be the strategic positioning? (segments/markets to be exploited/abandoned).
- Online value proposition (alone or through digital platforms: Google, Amazon, etc.)
- Resources/competencies to develop or acquire among others.
The creation of this plan will allow the company to move from a situation of uncertainty and crisis cabinet for a reality closer to recovery, so that their employees will move from a situation of problem solving / short-term tasks for an environment with greater temporal perspective, market and sustainable growth of the company.
The more agile the company is in creating this plan that reflects the adjustment to a new reality, it will be able to identify its needs for financial resources in both the short and long term, allowing it to give a long-term vision to both shareholders and financial institutions.
“A leader’s task is to take his people from where they are to where they have never been before”
Henry Kissinger (politician with a great influence on international politics)
