COVID-19: The Great Disruption
No one was prepared when COVID-19 shut the world down. While the focus has been on personal and public healthcare, COVID-19 has certainly also changed global business forever.
From workplace cultures to business models, it is plausible to say that economics historians will define this period as a Before-COVID (BC) and After-COVID (AC) age. According to the United Nations Conference on Trade and Development (UNCTAD), the pandemic has caused an unprecedented loss of US$4 trillion from the global economy1.
At the same time, new industries continue to fuel growth in remarkable ways. For example, the electric vehicle industry is now mainstream2, and Cryptocurrency3 is about to be considered an asset class. It is clear that the usual playbook no longer applies.
In Search for a ‘Corporate Vaccine for Resilience’
We collaborated with governments and business associations to conduct the COVID-19 Business Clinics aimed at helping companies and organizations based in the Americas, Asia, and Europe. The goal was to review the pandemic’s impact and help organizations plan their next steps to navigate out of this unpredicted crisis.
As part of each Business Clinic, we conducted a COVID-19 Survivability Assessment, using a systematic process to understand how the circumstances impacted them and how they could adapt and thrive in this new age. The COVID-19 assessment focused on the following 12 key aspects:
A ‘Corporate Vaccine for Resilience’ has these 4Cs
Our review showed that organizations were clearly shocked by the level of disruption COVID-19 brought to their business and operations. However, interestingly, we came across a distinct few that quickly adapted to the new environment by pivoting their activities and operations.
This handful of organizations was not only able to minimize the impact of the pandemic on their business but emerged stronger during the pandemic. In studying these anomalies, we discovered four key characteristics that enabled them to maximize opportunities or overcome challenges.
These characteristics, referred to as the 4Cs, are integral to the “Corporate Vaccine for Resilience” in the “never normal” age, and a key to withstanding disruptions of the present and future.
Organizations with a greater sense of cause or purpose, especially one that is embedded in their business model, are able to maintain laser-sharp focus despite the upheavals. In addition, such cause-driven companies had more robust relationships with staff, suppliers, and clients. This allowed them to negotiate more favourable terms enabling them to navigate the uncertainties better.
Not every sector was affected as severely as everyone thought. For example, high-growth sectors such as E-commerce seem unaffected by the pandemic. In such cases, being cause-driven gave them a higher brand premium to power their market leadership.
2. Culture of Trust
The pandemic forced entire organisations to work remotely. This break from traditional in-person model brought to light the negative impact of toxic work environments and pushed many people to re-evaluate their work environment. Remote work also gave rise to widespread poor mental health and the emergence of virtual micromanaging.
On the other hand, we found companies with a high degree of trust did better in managing their staff working remotely. They were more able to keep the channels of communication open and adapt to the new normal despite the absence of physical interactions.
3. Creative Vision
Organizations that did not see the pandemic as an obstacle but as an opportunity to identify growth areas benefited. They possessed an innovative vision and were able to communicate this effectively to inspire common action at all levels of the organization.
Such visionary commitment to develop new competencies to reshape the industry and its future opened new pathways to growth. This visionary clarity also enabled teams to work on the possible pivots quickly and with confidence, increasing the probability of success.
4. Competent Pivot
Companies and organizations that were very used to thinking ahead and planning their next moves, as well as considering risk factors and environmental changes in pre-COVID times, were able to move with agility to pivot their operations and activities during the Pandemic competently.
This culture of proactive planning and efficient implementation is a competitive advantage that made the most difference. This also allowed them to focus on implementation quickly rather than be caught up with too many conceptual meetings.
The Positive Effects of Strong Corporate Resilience: Pivot with Success
Reviewing the data, we found that organizations with all 4Cs of ‘Corporate Vaccine for Resilience’ exponentially increased their success of pivoting their business models to gain a new competitive edge.
From our 17 years of work in transforming companies, there are four possible pivots defined in the diagram on the next page.
To illustrate this further, we will use the example of Apple, an organization that is probably one of the best case-study of an organization’s ability to pivot into new areas of growth and competitive strengths. At the point of publishing this white paper, Apple came close to becoming the first company that achieves a US$3 trillion market capitalisation4. Apple is certainly one great example of corporate resilience.
Consulus 4 Business Model Pivots
- Related Pivot: Evolution of Business Model based on core capabilities to rise up the value-chain or through value-add.
- Asymmetrical Pivot: Business model pivot into an unexpected field but linked to core capabilities resulting in transformative value for customers.
- Experiential Pivot: Business Model pivot into a field that is highly experience-based and transforms the entire engagement with the customer.
- Disruptive Pivot: Business Model pivot into a highly sophisticated value and beyond the existing capability, one that systematically entrenches market leadership with deep skillsets.
4 Pivots in Corporate Resilience by Design – Example of Apple
- Related Pivot: iPod builds on Apple’s strength in hardware and software.
- Asymmetrical Pivot: Apple was the first personal computer company to move into mobile phone industry.
- Experiential Pivot: Apple’s pivot into retail. Their stores remain one of the world’s most profitable per square foot5.
- Disruptive Pivot: Apple’s decision to displace Intel chips in favour of their own M1 chips.
One more thing: Introducing ‘FEDS’ Trends
Not all is doom and gloom; during this pandemic, it is clear that there are new growth trends that will have a seismic impact on the destinies of companies that either embrace or ignore them. While working with companies on their pivots into new growth areas, we have observed the following four emerging global trends that will impact our world for the next 20 years.
The 4 Defining Growth Trends: FEDS
1. Food Tech
COVID-19 has increased awareness of food security, accelerating growth in this sector. According to consultancy firm Allied Market Research, the global vertical farming market size is projected to reach US$12.77 billion by 2026, from US$2.23 billion in 2018, growing annually at 24.6%.
Concerns and opportunities have both fuelled the sector’s growth for climate change. The Global Green Technology & Sustainability Market is projected to grow from US$11.2 billion in 2020 to US$36.6 billion by 2025, according to a report published by MarketsandMarkets.
COVID-19 has reinforced that data is indeed the new gold. The Global Big Data Market is expected to reach US$234.6 Billion by 2026, according to a report published by the Global Industry Analysts Inc (GIA).
COVID-19 has not slowed down the pace of the space sector. This sector continues to see breakneck growth, with SpaceX leading the way. The Bank of America expects the space industry to triple to a US$1.4 trillion market within a decade.
In conclusion, leaders can reflect if their organizations have the 4Cs Corporate Vaccine to be more resilient and face the coming disruption waves. If not, it’s not too late for an honest assessment and addressing the gaps for a resilient future. The pandemic may persist, but there are also growth opportunities. By focusing on what truly matters, and by being clear-eyed about the present and the future, it will allow you to maximize the opportunities at hand.
- UNCTAD: Global economy could lose over US$4 trillion due to COVID-19 impact on tourism
- CNN: Big carmakers show they too can gain from the electric car shake-up
- ChannelNewsAsia: Commentary: Cryptocurrencies could become viable asset class for investors
- Reuter: Apple inches closer to US$3 trillion market cap
Consulus works with organisations throughout the world to…
- Quick Assessment for Future Resilience: … do a quick assessment on your current state of resilience.
- Holistic Assessment for Future Resilience: … do a holistic review and a Future Resilience Design lab to rethink and reshape your organization’s growth and identify a new roadmap towards the future.
- Redesign for Future Resilience Success: … serve as an implementation partner to speed up your pace of implementation with a global team of multidisciplinary experts covering 5 modules from business model, culture, financial model, product and experience design, brand and marketing.
The following global team contributed to this white paper.
Lawrence Chong: Lead author, Group CEO at Consulus
Helena Pham: Lead author, Partner at Consulus
Stanislav Lencz: Global Chairman (2021-2022) and Country Director at Consulus Slovakia
Rebecca Teo: Deputy Head for Strategic Perspectives at Consulus Singapore
Gino Bulan: Country Director at Consulus Philippines
Vincent Chee: Deputy Director for Design at Consulus Malaysia
Jim Funk: Global Senior Fellow for Leadership, Consulus USA
Hrvoje Lovrić: Senior Consultant at Consulus Croatia
Pedro Furtado: Country Director at Consulus Brazil
Shiraz Latiff: Country Director at Consulus Lanka
Sindavanh Manivong: Country Director at Consulus Laos
Sharon Kam: Head, Creative Strategies at Consulus Singapore
Krešimir Ružđak: Senior Consultant at Consulus Croatia
Syafiq Zainal: Design Consultant at Consulus Malaysia