Facing The Great Reset
From huge enterprises to small businesses, from governments to households, — leaders are now trying to take a breath, gathering information about market trends and making operations transparent and manageable. Like any creature facing a threat has two options: to freeze or to run, human being embraced COVID-19 reality, putting on hold investing and running cost-cutting initiatives. Though a break is a standard first option downfall, there is a risk of a further great pause, turning into the great doom. For me, the great reset would be much more preferable, so the main issue remains how to anticipate and plan now. Speaking about now I mean post covid-19 period, acknowledging that time flies and reality changed forever, let’s imagine what’s next? Next we’ll take a step towards a road-map with several (including unthinkable) scenarios. We will try to analyze guidelines for that, exploring Gartner, Big 3 and Big 4, WEF materials, CIO/CEO/CFO Magazine and other trusted opinions.
For now, analysts call to prepare to a wide range of scenarios, even to unthinkable, rom fast economic recovery by the end of 2022 to a severe economic crisis with the bottom by 2024. PWC proposes a picture that seem highly likely to happen:
- essential sectors (medicine, education, consulting, security/cloud services, delivery) are by-passing to online, so the third part of the sector is already there with a significant revenues increase; and
- online business (gaming, telecom, banking, e-everything) is delighting an increased demand; whereas
- others are affected with a demand spike due to lockdown, and those are to rethink the business and self in order to stay here tomorrow.
Essentially, the world goes digital, others are to survive; this is not an implication, but a fact.
So, first shock phase following the restriction of physical and business activity. Business resilience and revision of targets and tools. Governments, investors, business and individuals focus on balance sheet repair in order to survive today is the time when nobody is concerned about future value maximization. The main document of those times is a P&L report and clarification of each point. Nobody can afford waste of capital, so everything not leading to the profit is eliminated or turned into profitable investments. Such great inventory leads to an understanding of what we are to become, thought, what we are to focus on? Chief Financial Officer and Chief Information Officer play crucial role in providing the accurate information, through consolidation of IT infrastructure and interactive dashboards with a real-time data. Conventional metrics are not more information-bearing, so data-driven approach will define the life expectancy. Adaptation to a ‘new normal’ is not what is seems at first sight: it is not about adaptation of your old tools for the new day, you’ll need completely new ones. The preservation ability in uncertain times together with the detailed analysis provide a good base for self-re-tooling.
Second, moving from the first phase to a second one — stabilization — leaders concentrate on major activity or product and diminish others. Each of your contractor or partner plays safe is narrowing the network to ones whose solutions one can rely on, existing solutions, not the new ones. Highly likely, it is not the best period for new technologies use, but for their emerging capacity. Welcome Chief Risk Officer with the main task to predict what we definitely should not do and provide a detailed risk based segmentation strategy, while the operations are going on. And then — to implement such a strategy making others to turn on a dime. Individual’s own risk strategy defines the structure of expenditures, so customer’s behavior and happiness would be the pivot point for any investment (either time or money). The main issue in this phase before moving forward is to clarify competitive advantages and distinguish sustainable ones from circumstance-based ones. This phase requires a clear thinking and honest analysis with the following givens:
- unlimited period of uncertainty with limited economic and social subsidies (and we are to cut extensive expenditures and broaden financing channels and stop thinking about soon return to good old times)
- uncertainty in purchasing power revival (and we are to think out new services/goods and sales channels, new clients and partners)
- impossibility of old-style performance (and we are to think about new workforce, new business model and orgstructure to deliver our product and to remain sustainable, and new standards of good which are much higher than ever).
The third phase is degeneration resulted either in revival or in death; this is the landmark with a fork ‘Innovate or Die’, we’ll see it not earlier, some say, that 2024. Customers’ needs become more clear, opening new prospective for capital flow and breakthrough. We are facing the new era of ‘good quality’, everything is gonna be much more expensive — goods, services, managers, professionalism cost a bundle. Following disruption creates potential for possess fundamental monetary and cognitive capital to acknowledge investment returns advantage. The main characteristic of this period is a total technology dependence, thus,
‘According to 38% of the risk experts surveyed, new working patterns leading to cyberattacks and data fraud are the most likely technological fallout risk for the world. The rapid roll-out of new technology solutions has exacerbated other risks, such as digital fragmentation, privacy violations and inequality. Thus, COVID-19 is likely to challenge the relationship between technology and governance, while mistrust or misuse of technology could have long-lasting effects on society’.
The rules of the game named ‘success’ have changed forever, so any tool we used yesterday is now a useless object not re-shapeable for today’s needs, we can’t adapt them, we have to invent new ones. And, you know, this is exactly what Abraham Lincoln called for: ‘The best way to predict your future is to create it.’ Economic and employees dislocation affected labor relations and operational cycles, which have to be agile (to be resilient) and cross-functional and cross-industry interdependence and programmes. Obviously, the pandemic is therefore a watershed moment for the digital transformation of any institution and each sector of life. Virtual operations define extremal customer orientation, building user friendly interface everywhere you look, increasing digital user experience. Poorly made product or service (either governmental or business one) and populism is not an option any more.
‘Successful leaders will now seize the opportunity to advance a new trajectory for digital transformation that aligns with the changing role of business: to be a powerful enabler of long-term value creation for all of its stakeholders. Transform into a digital business across seven dimentions’ .
Indeed, for now, we have no time for a corporate bureaucratism, so take a marker and a flipchart, and define right now:
1. Key partners: who are (and will be) our partners and investors and how we communicate with customers
2. Key business activity: what is our cost structure and what we are focused on
3. Key resources: what are our capital and human resources and how we use sales channels
4. And how we can optimize it to increase GPM and contain costs.
So, welcome CHRO, whose new role for any organization, reassuring them with empathy and clear action in order to build a valuable business. The amount of pressure people dealing with demands new human/business oriented management to provide cross-functional nature of digital transformation. Familiar to HR capacity of communication spreads further from employees, and the ability to provide constant communication with all stakeholders, including customers, becomes crucial. Facilitation of goal setting and defining initiatives to build up cash reserves, setting up talent and operations agenda in consistence with CIO and CFO on product costs (себестоимость) and digital initiatives, CPO and CMO on engagement with customers and fast MVPs delivering to help CEO evolutionize from data-driven to digitally driven business models, taking into account the necessity of short-term needs and longer term future. HR is about a talent management, and post-Covid-19 is all about the talent, either internal or external one. Using the employees’ and customer talent to co-creation of products and value — is a way to innovations, and extreme customer oriented model, obligatory in the new reality. Yes, I’m talking about the new role of HR who takes responsibility for back-office, operating model and customers, bringing together all stakeholders inside and out business in order to provide business continuity and resilience. Voice of client and NPS are now a real KPIs for HR.
CHRO is about to help C-suits with a comprehensive transformation:
CHRO are now reaching four dimensions:
1. Be a facilitator of business mode recrafting and embracing agility to provide business resilience new value delivering
- Provide strategic coaching for C-suites to focus on dynamic value map and earning assets, de-risking cost/revenue, enable overall financial management, cash and liquidity management both top-line and bottom-line
- Empower business with the ability to reconfigure strategy, structure, processes, people, and technology quickly toward value-creating and value-protecting opportunities
- Assemble architecture of information and tools for data flow, update security/risks architecture
2. Update operating model and orgstructure together with business-processes and people roles
- Provide opportunity for enterprise transformation and building intelligent operations by rethinking business model and business processes reshaping/optimization
- Adapt organizational structure to an agile-friendly ecosystem, with strong risk-assessing and decision-making capability, enhanced planning/reporting system and cross-functional integration, digital cooperation and simple track-record mechanisms
- Adjust company IT infrastructure to a consolidated business-friendly risk-averse cloud IT architecture, embrace digital tools to make data/processes transparent, real-time decision making, accelerate remote collaboration/delivery and ease communications
3. Reinforce human capital through new talent management and performance management system
- Build a future-proof skills strategy, create a new hiring strategy and talent-on-demand model with elastic (liquid) digital workforce prepared for sharp staff augmentation/reduction, including remote locations and #-competence models, create new retention system and minimize turnover
- Define key roles/competencies and new roles necessary for a long-term prospective, build new talent management and grow-path system, update leadership training programs from a digital/remote prospective, establish continuous people development system
- Impose performance management system based on actual outcomes and margin gain, provide personalized reward and compensations structures
4. Scale the agility to boost remote collaboration/delivery and embrace antifragility
- Re-establish organizational culture to promote operational efficient by providing means for remote discipline, easy and quick decision making and independent thinking
- Provide a smart working conditions and give a push for tribes cooperation and reconfiguration throughout the organization to provide people with a possibility to deliver smart overall company solutions
- Establish sustained and comprehensive people data-analytics and wellbeing system
When clients ask “How will I know if they’re working (remotely)?” I ask “How do you know they are working now?”
KATE LISTER, PRESIDENT OF GLOBAL WORKPLACE ANALYTICS
This is the new era of management, and a call for completely new HR role in any institution and every sphere. This is an opportunity for HR to really understand what is it to scale agile and become ‘Chief Resilience Officer’, being at the center of organization rapid response to the new reality, playing a key role in providing workforce equipped and engaged, resilient and productive — in other words. Becoming a real business partner, HR has a full responsibility for providing an organization for the new reality and fast recover come rain or shine. And ‘need for speed’ is a new black.