Dr Keen Mhlanga
The world is witnessing dramatic changes in environment, technology, economy and society. “Business as usual” is no longer acceptable, and companies must adapt to the changes to forester their continued survival.
The Covid-19 pandemic has not only upended society and inflicted tragic losses but it has also been a defining moment for business.
The crisis has accelerated the use of modern technology, radically altered customer behaviour, short-circuited business operations and revised how employees get things done.
Many of the practices that have become commonplace during this time, online commerce and banking, remote working and healthcare, digital learning and entertainment, will continue long after the crisis subsides.
To navigate and survive the coming decades of transformative change, every business will need to harness all the ingenuity, creativity and imagination they can muster.
Clinging to business-as-usual is not just risky, but a narrow and irresponsible approach as the company will be at risk of losing its market share.
Businesses should adapt as quickly as possible to the changes that occur since it is the only way to differentiate themselves and stay in the new battle field.
What is valid today, tomorrow may not be useful or of priority, the speed of adaptation will be the key in the equation that will allow companies to continue making profits and stay alive in the medium and long term.
The migration of commerce, entertainment, education and socialising to online channels as well as the move to remote working has turbocharged interest in shifting processes, interactions and workflows to digital mechanisms. Making better use of the artificial intelligence that can be gleaned from the resulting data.
In a survey carried by FinKing Financial Advisory 64 percent of companies plan to focus on accelerating digital initiatives over the next year or two and as in many other sectors, customer convenience has become one of the most critical priorities in business.
Similarly companies will focus on increasing use of e-commerce in coming years and 32 percent of companies say the crisis will cause them to replace their brick-and-mortar business with digital business. It is time to make a deep reflection about the company structures, consider whether the resources are being optimised and if there is a cost scheme that allows the adaptability that is required and it must be done quickly in order not to lose distance with competitors.
Consumer preferences and demands keep changing and responding to these changes innovatively and tweaking our business concept accordingly is the only way to stay relevant in the market.
The key is to decide on what kind of change is required, when, how and to what extent. Proactive companies anticipate market changes before they occur and become known as trend-setters. If a business is lagging behind the market by a few paces, its success may reduce and it will need rejuvenation to bring it abreast with consumer demand.
If a business is in many paces behind, it usually faces survival challenges.
The telltale signs of a business in trouble are generally its financial condition and brand perception. When some companies are performing well financially they tend to relax but competitors may follow their business model and the only way to survive the threat is by differentiating their brand.
Differentiation will help in building customer loyalty as the customers will not be able to get the same product or service from any other company in the same way that you will be offering it.
With physical business meetings being banned during the crisis, online meetings have gained momentum, and also with traditional sports being stopped during the pandemic, live streaming has become a well known phenomenon.
The economy fluctuates up or down on a daily basis, frequently causing businesses to alter the way they operate. New competitors enter the marketplace while others leave.
Ever-shifting weather patterns and natural disasters can force a change in a business environment as can political events, wars and the adoption or rejection of laws and rules.
Advanced technologies, products and innovation lead to change in a business environment as can population shifts. Businesses also are forced to change internally when a key employee leaves, gets sick or dies.
No matter whether change is abrupt or evolves over a period of time, business owners and leaders must revisit their companies’ strategic plans on a regular basis.
Critical to business success, strategic planning involves vision and mission, and knowing how and when a business should adapt to change. Strategic planning is the blueprint of where a business is now and the action plan of where it is heading.
Understanding the Strengths, Weaknesses, Opportunities and Threats, also known as SWOT analysis of a business can help determine a company’s goals and the strategies necessary to achieve those goals.
Apart from revenue losses and increased costs, firms have faced value chain disruptions, funding withdrawals, and severe trade contraction as a result of the Covid-19 crisis.
Firms in face-to-face service industries such as travel and tourism have been hit especially. Hard customer traffic decreased due to the regulations that were put in place to control the pandemic.
Naturally, the pandemic is affecting industries differently.
Manufacturers are enduring acute short-term disruption, and they expect it to last at least another few years.
Businesses in this sector are the most likely to make significant cost reductions and the least likely to accelerate digital transformation.
If a company is losing ground in product, quality, service, image, customer satisfaction and profitability comparisons with competitors, it may mean that competitors are adapting better. Benchmarking can be hard on the ego, but it is one of the best and earliest indicators of trouble in adapting.
There is great need for change managers to promptly and effectively respond to changing business environment.
Limiting factors in the activities of change managers and limiting their ability to anticipate and respond to the challenges of change in the business environment may harness progress in staying relevant.
It is also ideal to validate some ways in which managers and organisations might improve own readiness and flexibility which is needed to respond promptly to business environmental changes.
Keen Mhlanga is the founder and chairman of FinKing Financial Adviso ry. He can be contacted on [email protected]