The global COVID-19 pandemic has disrupted every sense of normal in our lives and businesses. Naturally, CEO’s have turned their focus on adapting to the “New Normal” and crisis management. Under most crisis circumstances, I would suggest that business leaders focus the attention of their team on navigating through the disaster. However, I think this time is different; instead, I am suggesting that CEO’s look beyond the pandemic and seek what I am calling the “Next Normal”.
Inflection Point
I don’t have to make a strong argument to convince anyone that the COVID-19 pandemic is a disruptive event. However, most business leaders appear to be navigating the event as a storm that will pass, and when the weather clears, they expect business conditions to return to “normal”. While navigating through the crisis, many have adopted the idea of a New Normal. This New Normal is characterized by wearing masks, social distancing, installing physical barriers, minimizing travel, and avoiding any congregation of people. Companies are spending a great deal of energy to master this New Normal but may be doing so at the expense of their future.
Let me pause for a moment to acknowledge that some businesses are truly struggling for survival. Those businesses NEED to put all the focus on the immediate fight in front of them. It is not those companies that I am addressing; instead, it is those companies that have the resources to withstand economic uncertainty for the next year that I believe are missing out. Many of these companies are focused on maximizing their profits for today and ignoring the imminent change in the marketplace. This is setting the stage for future failure. Our economy is at a major inflection point; it will look much different a year from now than it does today.
The reason that we should expect a vastly different environment post-Pandemic is that history tells us so. Every major trauma that our economy has experienced over the last 100+ years has led to fundamental changes in the economy. The most notable was the economic boom that occurred in the years following the Great Depression and WWII, but even lesser events have led to shifts in the economy, technology, and consumer behavior.
Next Normal
The changes in the daily habits of every person have been so radically impacted in the New Normal that we need to anticipate that virtually everything that affects demand for products and services (which are largely impulse, and habit, driven) have been reset. When we emerge out of the New Normal, we are not going back to “normal”, instead we will be facing the Next Normal.
Preparing for the changes in the marketplace because of this inflection point should be the highest priority for business leaders. In less than 12 months, the playing field will be completely different; you will either be a winner, or loser, as a result.
The challenge, of course, is predicting the future. What changes in behavior can we expect that will drive new business opportunities? Answering this question is much like building a jigsaw puzzle, but without all the pieces. You will not be able to see a perfectly clear picture, but you should be able to be able to form enough of an image that you map out a strategic direction.
Starting this process requires you to map out what you know. For example, we know that people have be isolated for exceptionally long periods of time. People have been spent much more times in their homes than before. Parents have been more engaged with their children and are closer to their educational track. Children and adults are learning virtually; they are also engaging and collaborating virtually. Routine entertainment such as dining out, going to movies, meeting in bars has been disrupted. All this change has happened long enough that old habits have been broken and new habits have been established.
Spending habits have changed; people have realized that some things that were perceived as “needs” are now recognized as “wants”. This shift in priorities will inevitably trickle down to consumer choices. If you are in any kind of retail business or consumer product company that has experienced a shift in buying behavior, don’t expect that it will naturally return to pre-pandemic levels. The attitudes, and values, of consumers have been permanently altered.
The change in buying habits will not be isolated to consumer purchasing, businesses (and the people that work there) have also been impacted by the dramatic shift in their way of business. Habits, priorities, and attitudes have all shifted, and are unlikely to return to what we previously understood as “normal”. Life at the office will be different going forward; too many days of working from home and communicating via virtual meetings have impacted how we see the workplace. Work hours may remain more flexible with people working more (or all) hours at home; workspaces may be changed to focus more on collaboration and less on parking spaces for workers.
Of course, some things will return to what we considered normal, but the perspective of buyers has permanently changed. Now is the time to either reset, or to rebuild, your brand image. If you complacently assume that you can continue business-as-usual without anticipating a changed marketplace, you will be disappointed.
Finding the Next Normal
Searching for you Next Normal is a process of exploration that is different than traditional strategic exercises. Conventional strategic planning efforts tend to focus on adjacencies as paths for investment and growth. There are good reasons for this approach as there is compelling evidence that businesses achieve higher rates of success while “staying in their lane”. Typical adjacent strategies call for: (1) selling a new application with an existing product to existing customers, (2) selling an existing product to similar customers in a new geography, (3) selling similar customer existing products through a new channel, (4) etc.. I think you get the idea; it is simply doing incremental pivots to your existing strategy to leverage you existing investment. More importantly it is leveraging predictable buying behavior based upon an established set of consumer habits and beliefs.
However, the Next Normal is resetting the habits and beliefs of buyers, so now is the time to find the big strategic pivot for your business in anticipation of this change. Traditional incremental changes to your business will do little for you as we emerge from the pandemic. The term “think outside the box” has never been more appropriate to describe the type of strategic thinking required for today’s challenge. It is those leaders that find and execute bold directions that will be the big winners in the coming decade.
Conclusion
Finding your place in the Next Normal is the most important strategic priority for CEO’s over the next 6-9 months. It will require some significant “out-of-the-box” thinking and will require some risk-taking that may be beyond your normal comfort zone. This is not the time for the faint-of-heart among business leaders; BE BOLD!
Are you prepared to take your business in a completely new direction?
Copyright © 2020 Douglas C. Fergusson
