Many businesses are still struggling to adapt to the new normal, but there is already a growing urgency to plan for what happens after the pandemic.
Companies cannot be stuck to reactionary measures. Anticipating the post-COVID19 challenges and opportunities is a must.
What is the next normal, anyway. It is not exactly a newly-coined phrase. Some 11 years ago, around the time of the 2008 financial crisis, Ian Davis of McKinsey & Company already used the term. He wrote: “The question is, ‘What will normal look like?’ While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years.”
These words can apply to the present situation. The next normal is still about what follows after the onslaught of a crisis. This time, however, there is a global coronavirus outbreak involved. The challenge for companies is to plan on how to do business in a world that has been altered considerably by a pandemic and an unprecedented recession.
Not the future everyone expected
The new normal entails a significant restructuring of the economic and social order. The future is not going to be what many expected it would be. McKinsey’s Kevin Sneader and Shubham Singhai offer an excellent summary of the elements that will shape the next normal. They are as follows:
- Distance – This is not just about the continued need for physical distancing. It is also about economies distancing from each other to avoid new outbreaks or problems stemming from the overreliance on other countries for their supply chain.
- Resilience and efficiency – Businesses need to change to operate more efficiently and survive new challenges.
- Contact-free economy – Analysts see increased growth in e-commerce, telemedicine, automation, and other sectors that thrive on minimal personal contact.
- Regulatory intervention – Governments will try to exert more control over economic affairs to prevent another wave of the pandemic and help businesses re-establish.
- More business scrutiny – Ordinary citizens and government regulators will be more watchful of business actions as their operations can contribute to the reemergence of the pandemic and the return of economic difficulties.
- Changing industry structures and customer behaviors – Industry giants and institutions will have to acknowledge the reshaping of the business landscape as consumer habits and attitudes get molded by the coronavirus health scare and the financial difficulties following a recession.
- Silver linings – Cheesy as it may sound, businesses will have to find new opportunities as economies rise from the ashes.
The need to adopt digital solutions
Digital solutions appear to be the way to go for companies as they brave new challenges after the pandemic.
Protectionism and economic distancing among countries do not mean a complete shutting down of international economic relations. It’s highly unlikely for imports and exports to stop. However, companies need to pay more attention to online trading to find new clients and suppliers. Also, trading in the financial markets is set to rise as investors try to scoop windfall profits from the economic recovery.
Ecommerce will grow even bigger as consumers become accustomed to buying the things they need online. “Consumers’ attitudes, behaviors, and purchasing habits are changing—and many of these new ways will remain post-pandemic,” writes an Accenture research report. These changes point to online buying and selling as the key shift businesses need to consider. The next normal sees more demand for digital solutions such as telemedicine and related services (package delivery) as the coronavirus infection fears linger.
The rise of e-commerce is not only about going where the customers are. It is also a logical option for businesses that need to rationalize their operations to make do with their limited resources. It is easier and less costly to put up an online store and operate with minimal employees and physical store staples. Likewise, it is cheaper to do marketing using the internet.
In relation to the growing prominence of e-commerce, many companies are also compelled to adopt telecommuting. Without appropriate digital solutions, however, remote work arrangements may end up failing. The expected productivity advantage may be nullified by problems such as procrastination or time management difficulties. Businesses therefore need management and communication tools to make remote work less challenging for those who are new to the setup.
In relation to greater regulatory intervention and public scrutiny, online solutions help companies by showing that they operate with better efficiency, and they are able to handle challenges with better agility. “Companies that possess digital business agility respond quickly and effectively to emerging threats to their business, and seize new market opportunities before their rivals even notice them,” write Professors Michael Wade and Andrew Tarling wrote in a Research & Knowledge article on the Institute for Management Development (IMD) website.
Change is inevitable even after the coronavirus outbreak is completely contained. There’s no more returning to whatever normal the world has been acquainted with. Even the biggest and oldest companies need to adjust the way they do business. “Less globalization, more tech:” this summary of one briefing by The Economist couldn’t be more succinctly appropriate.
The takeaway
Digitalization and the use of the internet serve as essential tools in dealing with the challenges posed by the next normal. These are not new ideas. Many have been advocating a digital shift for a long time. However, doing business after the pandemic and recession makes digital transformation a more urgent concern for businesses.
