Speed, agility, and a new understanding of customer values are the keys to navigating the next normal.
COVID-19 continues to have a far-reaching effect on people’s lives, families, and communities as well as on the global economy. Amid the bleak economic reality, companies in response are focused on driving a dual agenda: protecting lives and livelihoods. As the crisis continues to upend lives, companies are struggling to understand its full impact on their businesses and how best to respond. According to our recent B2B Decision Maker Pulse survey, about a quarter of companies surveyed say they are redirecting and increasing spend toward emerging opportunities.
As we outlined in our article Leading with purpose, marketing and sales leaders need to operate simultaneously across three horizons: navigating the crisis now, planning for the recovery, and leading the next normal. This article will focus on the second horizon and how companies can accelerate what they do and how they work to capture revenue quickly for the recovery (Exhibit 1).
That element of speed and agility in particular is crucial because this once-in-a-generation challenge is likely to have a profound impact on who is left standing when the crisis finally abates. During the downturn, for example, consumers and customers are likely to “trade down,” that is, buy less expensive products, resulting in big changes at both the high and low ends of the market. Brands will be repositioning themselves and shifting to digital channels, products, and services, opening up another front in the battle for new and existing customers.
In this context, it’s not enough to capture revenue; it has to happen quickly. We’re already seeing first movers reap significant rewards.
A mental model to enable Rapid Revenue Recovery
What really stands out is how leaders approach the activities needed to drive revenue at a scale that makes a difference. The most effective leaders have a mental model built around SHAPE, an approach with five core elements:
- Start-up mindset. The start-up mindset biases action over research and testing over analysis. We’ve seen companies, for example, make sizable allocations of marketing budget in days and even hours, and launch new ecommerce businesses in a matter of weeks. Start-up leaders establish an agile cadence through daily team check-ins, weekly 30-minute CEO reviews, and biweekly hourlong sprint reviews.
- Human at the core. To drive rapid action, companies will need to rethink their operating model, building it around how their people work best. Our B2B Decision Maker Pulse survey research has shown that more than 50 percent of businesses find a new remote sales model to be of equal or greater effectiveness than the old one. Enabling people will clearly require a new set of skills and capabilities, from facility with tech to working remotely. Successful pivots to a remote sales model, for example, will require an entirely new level of collaboration and coaching between front-line sales reps and leadership in order to meet consumer expectations.
- Accelerate digital, tech, and analytics. It’s almost become a cliché to say that the crisis has become an inflection point in the shift to digital, but the best companies are moving quickly to enhance and expand their digital channels. They’re successfully using advanced analytics to combine new and innovative sources of data, such as satellite imaging, with their own insights to derive “recovery signals.”
- Purpose-driven customer playbook. Putting customers at the center of the business is a long-established principle, but post-coronavirus businesses will need a deep recalibration of how customers make decisions. Companies will need to rethink decision journeys to understand what customers now value and design new use cases and customer experiences based on those insights. That means a more nuanced approach to segmenting customers.
- Ecosystems to drive adaptability. The disruptions in supply chains and offline buying channels have made adaptability crucial not just to survival but to accessing opportunities quickly. In the short term, adaptability may mean how companies work with agencies and partners, but in the long-term, it will require new partnerships and non-traditional collaborations, including strategic M&A.
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Originally published at Mckinsey on May 07, 2020.