Kush Birdi, Head of Corporate and Commercial, looks at how innovation will be key for business recovery.
The year 2020 has been eventful so far to say the least. In just a few months, we’ve gone from ending 47 years of British membership of the European Union, to the outbreak of a pandemic wreaking havoc across the globe. Businesses have had to “furlough” their business plans and adapt quickly just to ensure their survival. As we look to emerge from government-imposed lockdown measures in the UK, the need to adapt will continue and the businesses that survive in the medium-to-long term will be those who innovate now.
Almost every business sector has suffered major disruption as a result of the COVID-19 crisis. We are seeing major UK companies fall into administration – mainly from the high street – including the likes of Oasis and Warehouse Group, Debenhams, Cath Kidston, Laura Ashley, Intu and, more recently, Victoria’s Secret UK. While the full economic consequences of the pandemic are yet to be seen, distressed conditions are likely to continue for some time and it could take months before we start to see what the “new normal” is for business.
It is highly unlikely that we will return to pre-COVID-19 times and working practices. Therefore, businesses will be forced to think differently in every area in order to adapt to the post-COVID-19 world. This is an exciting opportunity for all sectors and it should be remembered that during the Great Recession – between 2008 and 2010 – we witnessed the birth of major companies such as Instagram, WhatsApp, Uber, Pinterest and Groupon.
So, what can businesses do to innovate right now?
Delivering an excellent customer experience is as critical as ever, and businesses must find ways to stay ahead of the competition who are also looking for innovative ways to find an edge in your marketplace. If you’re a B2C company, the challenge will be to figure out whether consumers are desperate for human interaction or expect your customer experience to be delivered by purely electronic means and at the click of a finger. Whatever the position, customer solutions that you implement today could define the relationships you build and maintain with customers and dictate whether you stay ahead of your competitors in the coming years.
Incentivise your staff
Many businesses already adopt flexible working practice allowing staff to work from home regularly. Since the lockdown-restrictions were implemented some have declared the “end of the office” as we know it and others are saying that old times will be restored. In reality it is likely to be somewhere in between, but the point to note is that businesses must adapt and be agile with their working practices. This means adopting practices that improve staff motivation, mental health, acquisition and retention – this might include permanent flexible working hours, offering equity incentives to staff, creating innovative job roles and offering promotions. Those businesses who fail to innovate in this way are risking falling behind their competitors in a post-COVID-19 world.
Collaboration and M&A
Although corporate M&A was substantially on hold throughout April and May, we are seeing an increase activity in June and have seen incredible collaboration elsewhere to help battle COVID-19. For example, Formula One Team Mercedes-AMG HPP and University College London have worked together to manufacture large quantities of the CPAP device which has helped free up ventilators for critically ill COVID-19 patients. This is a great example of the power of collaboration because, quite simply, neither could have produced the desired result without the other.
A recent survey carried out by Ernst & Young (EY) found that 56% of senior executives are actively planning acquisitions in the next 12 months. Whether you acquire other businesses or enter into joint-ventures, collaboration can be a great strategy for distributing risk and cost, sharing knowledge and expertise and accessing new market and networks.
The pandemic goes to show that “black swan” events can and do happen. It’s doubtful that anyone can say they were 100% ready for the COVID-19 crisis. Many will have been completely unprepared, some will go through a box-ticking exercise of having business continuity and crisis planning policies, and few will have established policies and practices for managing a pandemic outbreak.
Businesses will need to think differently about their contingency planning and should use their experiences during the COVID-19 crisis to implement an agile infrastructure that permits business to continue in any type of disruption. This means addressing things like crisis planning (say, in the case of a second wave of COVID-19), disaster recovery, understanding and managing contractual risks, evaluating supply chains and customer profiles, reviewing insurance coverage and improving IT infrastructure and cybersecurity measures.
For more information, please email email@example.com or contact Kush directly on 020 8305 4230.