For many businesses, the coronavirus pandemic has brutally exposed some harsh realities beneath the surface: fragile supply chains, weak customer relationships, inadequate job contracts and precarious balance sheets.
Seeking immediate and effective action to protect their people and businesses, many leaders have abandoned annual plans and fixed budgets overnight. They’ve jettisoned large strategy reviews and linear execution. Along with cracks in the business foundation, the pandemic has unveiled fixed-cycle planning and budgeting as seriously outdated and misguided. But it also presents an opportunity to transform the executive committee (Exco) agenda and take a continuously evolving, organic approach to strategy.
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Of course, there are real dangers in becoming highly reactive—and eventually subordinate—to events like the pandemic. Leading companies are sticking to their current management processes, but adapting them to become dynamic and responsive to the situation. They’ll decrease cycle times and, in doing so, stay on the front foot.
Some organizations already rely on living agendas for business delivery and development, supported by rolling forecasts and capacity-based resource allocation. Their executive teams have doubled down on these best practices, significantly increasing their cadence and intensity, while preserving their integrity. One key step has been identifying trigger points and defining actions to take as certain events unfold. Scenario-based planning is helping these leading-edge companies preserve cash, maintain solvency and promote their relevance to customers.
For the rest, now is the time to permanently abandon the inanimate aspects of their strategic planning and resource allocation. The Exco can take four immediate actions to build an effective, living agenda, while preserving the credibility of their control and decision making.
Reset delivery and development agendas
The crisis has rewritten reality across organizations, requiring updated agendas for the current delivery and future development of the business. Leading CEOs will call for each business area to promptly review and reorient their agendas. Executives can start by defining how the crisis will affect their priorities (see “A board’s guide to the resilient agenda” below). They’ll take stock of their current situation and set out action plans for business delivery. They’ll also develop a future-back view, which starts several years out and envisions how the pandemic might fundamentally alter customer needs and the industry landscape. With a vision of the postpandemic world, the Exco can provide direction to retool the firm’s products, sales approach, supply chain, organization and operating model to be fit for purpose.
One technology infrastructure firm identified its major priority in the short and long term: new business from current work-from-home policies. Aiming to serve emerging enterprise needs and betting on a sustained trend in mobile workforces after the pandemic ends, its Exco inspired and enabled the product team to quickly craft new offerings for telecommuting.
With the goal of its agendas in mind, Exco members can align on a fresh financial plan. They’ll consider the current reality and agree on a macroeconomic outlook (for example, whether we’re facing a multiquarter recession or an extended depression). The Exco will also determine how to manage and evolve its revised agendas over the coming weeks and months.
As a final step in resetting agendas, leaders will clarify and share their plans to assure, focus and coordinate teams across the organization. Clear agendas also send a powerful message to other concerned parties, including the board, regulators, partners and customers. The agendas proactively align stakeholders on how the organization is reacting to crisis-related challenges. In the absence of these early and proactive communications, stakeholders may overwhelm leaders’ time and attention with distracting demands.
Accelerate communications and decision making
In a time where situations can change day to day, leadership teams have increased their pace and agility to respond to issues immediately. Exemplary teams have adopted a new tempo, updating the cadence of their meetings from monthly to weekly, or even weekly to daily. Through frequent video calls and shorter meetings, they’ve streamlined internal communication and reduced cumbersome standards for decision making. For instance, some banks now start the day with executive stand-ups, where the core team tackles new issues involving business continuity and employee safety.
However, leading Excos have also ensured that processes remain robust and relevant. They’ve protected against the alternative: a more politicized organization in crisis, where people circumvent—and thus, critically undermine—processes to get their way. Upholding the integrity of key management processes signals to the organization that while decisions are faster and more urgent, the rules of the game haven’t changed.
Through the organization’s responses to the crisis, leading companies are establishing a test-and-learn culture: trying actions, discovering unexpected challenges or successes, and adjusting to find the right solutions.
Clarify triggers in scenarios and forecasts
Many governments around the world are trying to devise multiple post-lockdown scenarios and the triggers that will bring those scenarios to life—and businesses need to do the same. When redefining priorities for delivery and development agendas, leaders can determine triggers for future events by asking questions like, “What would prompt us to reopen a mothballed plant?”
By outlining and linking these triggers to forecast scenarios, the Exco can reach a clear, shared base-case forecast. But more important, they’ll have a streamlined way to get ahead of events as they unfold.
For their development agendas, many cloud software companies are identifying candidates that could accelerate growth into new adjacencies. They set clear metrics and measures of venture capital funding amounts, valuations and timing as triggers to ascertain when certain companies might be more open to partnership or acquisition.
Focus the organization on customer relevance
In a crisis, one immediate concern for most companies is a lack of cash. But the more significant challenge, for the duration of the crisis and beyond, is a lack of relevance to their customers. With every action, companies will demonstrate whether they’re essential or discretionary. Leading Excos will put current and future customer relevancy at the center of their new delivery and development agendas.
The pandemic has swiftly altered customers’ needs and behaviors, and adjusting for those changes is crucial to staying relevant. Equally as important is relevancy after the crisis ends. During the Ebola outbreak in West Africa, mobile-money usage became widespread, filling a need for quick and safe monetary exchanges. Even after the epidemic, mobile money remained commonplace, a testament to a long-lasting change in consumer behavior.
Today, we’re already seeing similar shifts. With hospitals overwhelmed by Covid-19 cases, patients with other ailments have turned to specialized clinics and telehealth platforms—and they may continue to do so. During the lockdown, many bank branches have relied on operations staffers, who typically manage the customer transition to digital, to serve customers in a range of scenarios. Moving forward, banks may keep this model and continue pushing customers to online platforms. Across all sectors, winning organizations are already reorienting their development agendas to meet customers’ newfound needs and behaviors for the long term.
A board’s guide to the resilient business agenda
As Excos breathe new life into their strategic planning, they can build lasting adaptability and resilience for the new, more turbulent world that emerges from the pandemic. It all starts with resetting the delivery and development agendas. Boards can ask these high-gain questions to help leaders kick off their planning:
Protect people and stakeholders
- What are we doing to keep employees safe?
- What are we doing to help our stakeholders do the same?
Preserve nonessential parts of the business
- What are we doing to defer costs and limit exposure where businesses need to be mothballed? Can we seek a rent holiday or defer discretionary investment?
- What are we doing to maintain cash and liquidity in the meantime? What does our working-capital and inventory management look like?
Gear up essential parts of the business and make them more resilient
- What are we doing to reach customers in a sustainable and scalable way? Have we launched digital or self-service offerings?
- What are we doing to maintain operational resilience?
- What are we doing to maintain or reorient routes to market?
Reposition customer communications
- Have we stopped all communications that feel out of step with the crisis?
- How can we quickly start communicating in ways that are helpful to our staff, our customers, our partners and other stakeholders?
- How can we remain relevant to customers during and after the pandemic?
Repurpose our capabilities, assets and franchises to be crisis-relevant
- Where are we well-positioned to support immediate customer needs?
- Who are potential new partners or collaborators that we can support to solve customers’ needs?
Plan for the postpandemic world
- What are we doing to prepare for an extended downturn? Do we have a proprietary, data-driven view of demand segments? Do we have coordinated actions to accelerate revenue and reduce costs? Are we seeking opportunities in acquiring capabilities, strategic hiring and partnerships?
- Do we have a clear vision for our company and industry after the crisis? Which aspects of our business do we need to retool in order to win? Have we assessed various future-back scenarios and identified the trigger points that will set off major actions?
- What are we doing to get ahead in a postpandemic world, where resilience and community citizenship will be more highly valued? Are we building a more resilient supply chain? Are we finding more self-reliant routes to market? Are we putting our customers and employees first? Are we seeking more partnerships with the public sector?
As the global pandemic deepens and the human cost of Covid-19 rises, the novel coronavirus outbreak is sending shocks through the world economy. But across industries, companies can take action now to protect their employees and customers and minimize the economic damage.
Herman Spruit is a partner with Bain & Company’s Financial Services practice and is based in London. James Dixon is partner with Bain's Technology, Media & Entertainment and Telecommunications practices and is based in Silicon Valley. Alastair Campbell is an advisor to the Financial Services practice and is based in London.