Post COVID-19 Resilience, Business Continuity, Market Shaping Capabilities
Post COVID-19 situation is one in which resilience-based business continuity goes hand-in-hand with flexible business models.
One of the advantages of hindsight is that it provides clarity to re-think, re-design and re-calibrate our perspectives in order to move ahead. COVID-19 is one such business discontinuity has forced the world of business to re-think their business assumptions, business models, marketing models, as well as other decision-making heuristics, by taking advantage of hindsight, and use it to steer the ‘business-ship’ in the new transformed business world.
Post COVID-19 hindsight has taught us lot of lessons. One of the most powerful lessons is one of resilience that is critical for business continuity. Most businesses were never ignorant of the business resilience, but only a few large organizations had internalized it in their business models. This is where the start-ups had an early advantage. Most start-ups may be cash-starved and struggling for growth and customer acquisition and retention, but they are never starved for new ideas to survive, grow and tweak their nascent business models. So, we saw Swiggy tweaking its business model from food delivery to courier service (Genie) including the hyper-competitive grocery delivery business, while makemytrip.com entered into the food delivery business. Post COVID-19 situation is one in which resilience-based business continuity goes hand-in-hand with flexible business models.
Although large organizations are more resilient in turbulent times, given their deep pockets and large scale (compared to smaller businesses which do not enjoy these advantages), yet many of these organizations often fail to adopt flexible business models like start-up do. The large organization was once a small nimble organization, quite flexible in decision making, but as it grew large in scale, the structure became more bureaucratic, less nimble and the now ‘tried and tested’ business model became so established that it was almost sacrilegious to change it. However, this pandemic has certainly shown us that there are no sacrilegious rules in the world that is constantly transforming itself. The normal is giving way to new normal. The pandemic is a disruption rather than a gradual change in the world order, and hence its impact is more drastic.
So here is what is required for large organizations. First, they should have a mindset of a small organization by searching for new substitutes for competitive advantages they already enjoy in the market. For example, if scales provide them a low-cost advantage, can they find substitute of scales as an alternate source of cost-advantage? Another example may be of an organization that has marketing capabilities in mainstream customer segments, can it develop capabilities for marketing excellence in niche segments? The point is that organizations especially large ones, are following the modus operandi of spending more resources on exploitation rather than exploration. This often leads to stagnancy of market capabilities. The race of higher market shares, customer profitability, acquisitions, loyalty and so on are symptoms of exploitation that are associated with immediate financial returns for stakeholders. But these are often distracting CEOs from investing sufficient resources on exploration activities such as developing new capabilities, building redundancies, and market-shaping that would lay the foundation of the future of the business. While exploration activities would bring home new business models, and new capabilities. May of which may be transferable to existing businesses, and thus help to transform the old and aging business models of established businesses. For example, it took Unilever the aggressive threat of Patanjali to realise that they should have developed capabilities to market Ayurvedic products in the market. This led to their failure. Too much focus on existing products and markets, rather than new capabilities is often the Achilles heel. As the adage goes, success is a bad teacher, and failure is a great one. That is one lesson, that start-ups would never forget, also because they have a shorter organizational memory.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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