Business Recovery Lessons
In discussions with Actionable Strategies, Chinese business leaders provided a number of lessons they have learned as they recovered their businesses from lockdown.
Omnichannel is now imperative for any business that sells to consumers. During lockdown, online touchpoints were essential for survival. Consumer behavior will be permanently altered for some percentage of customers. Comfort and familiarity with an online, low-touch model will require continued focus on this model. This is not a new phenomenon. For example, financial services has experienced a number of revolutionary disruptions such as the original disintermediation from the ATM, online banking and electronic trading. The solution has always been to adjust the channel mix and continue to engage customers as they choose.
Chinese have historically placed great value on relationships and this remains true today. Relationships are often built over social interactions such as dining, drinking, golf and high-touch other activities. These have now become more important as social distancing and the risks associated with COVID-19 make face-to-face meetings less compelling. Chinese business leaders stated that actively maintaining networks through in-person contact is key to future success when dealing with other companies.
As with omnichannel, direct-to-consumer is a reality. With disruptions in distribution, some sellers sought to bypass intermediaries and sell directly to consumers. A striking example is “farm to table” where 13 million farmers now sell produce directly to consumers. These sales were facilitated by e-commerce platforms such as Alibaba’ Taobao, JD.com and Pinduoduo which fulfilled over 1 billions orders in the first quarter alone.
Working from home will continue to be an important aspect of the human capital management landscape. Not every worker will return to their office space every day. While this is part of the gradual return-to-work model, some portion of the workforce will continue to work from home for part of the work day or potentially in perpetuity. Again, this is nothing new. For consulting organizations and other knowledge workers, it has been common to gather in person for critical face-to-face meetings and work remotely at other times.
The damage caused by lockdown was serious on many levels but did reduce the mortality and infection rates. Aside from personal consequences, there were severe business impacts felt across almost all industries. Business leaders in China have universally advised following practices that avoid the spread and resurgence of COVID-19.
The new normal has not been realized yet. Behaviors and practices will continue to evolve as societies and the medical community move forward to address the issues posed by a novel virus. One thing is certain: the virus accelerated trends that were already in place with digital transformation, virtual engagement of teams and customers, and global risk management.
Lessons From Financial Services About Mitigating Supply Chain Risks
During discussions with supply chain executives, CEO Jeffrey Wu proposed applying a model from financial services. It was viewed as a viable and appropriate approach for a number of industries.
After sharing ideas about protection of supply chains with some manufacturing executives, I received feedback that it was valuable. Hopefully you will, too. We can apply a lesson learned in the financial crisis to manage supply chain risk. Firms had used a prime broker which concentrated counterparty risk to a single entity. The crisis forced them to transition to multi-prime to minimize risk.
With the current crisis, supply chain executives are considering moving out of China and possibly homeshoring, but this still concentrates risk. Given the disruption involved, it is timely to consider adopting a multi-source supply chain, even with the great complexity involved. The foundation includes distributed Lean processes in multiple countries, possibly using safety stocks, and a robust technology infrastructure supporting situational awareness. Correlated risks should be avoided in selecting potential partner sites.
This approach applies even more naturally to BPO, software development, support and other services. Incremental costs can be minimized if processes are harmonized and managed globally. Management should include tight governance as exercised over other critical infrastructure vendors. Some forward thinking leaders I spoke with agree and are already pursuing this approach.
Virtual Work Environments – Panel Appearance
Creating a virtual work environment is a leadership challenge that should be managed. Being productive at home involves controlling yourself as well as your environment.
Through the SIM Community Outreach Committee, I am coaching for NPower who helps “launch digital careers for military veterans and young adults from underserved communities”. Last week, I was on a panel about virtual work. Having first worked remotely in the 1980s, I wanted to share what helped me achieve the most.
1. Control yourself – maintain a work schedule and consistent habits, avoid personal distractions and tasks during work, seek an appropriate work/life balance
2. Control your environment – create a productive workspace, limit distractions from household members during calls/focused times (create a schedule of independent activities for children)
3. Stay connected – telepresence technology makes it easy to reach customers, colleagues and suppliers
4. Improve yourself – take control of improving what you do and how you do it
It is easy to grow unproductive if you are unmotivated and disconnected. Work hard when you are at work. Then, disconnect and enjoy your downtime and those you connect with, at home or virtually!
Leaders: inspire your teams to drive outcomes and measure what is delivered, not “inputs” like hours worked. I wish everyone success as they adjust to new work models.