The pandemic has reshaped the world as we knew it. A volatile and uncertain recovery period now lies ahead as the potential outcomes of the crisis are not only varied but will differ from region to region.
As many countries are hit with the second wave of Covid-19, we foresee that market volatility will continue well beyond the recovery phase. The inherent systemic risks of an interconnected world further suggest that uncertainty will not disappear any time soon. But that’s not all.
Over the next few years business leaders will need to rethink and adapt their strategies to transformations and trends that are speeding up and changing the face of entire industries. In this article we outline how Swedish decision-makers can respond to today’s challenges and stay relevant in a volatile post-pandemic world.
How to navigate the future
While tackling uncertainty is never easy, these five essential steps will help you to take a methodical approach in your business planning:
- Monitor the recovery pace: The global recovery will be fragmented and evolve at different speeds in different markets and industry sectors. Companies must therefore adopt a solid framework and process for monitoring the status of the pandemic, lockdowns and economic outlook.
- Track new opportunities: Billions of dollars have been mobilised globally in crisis response through fiscal and financial stimulus packages, policy changes and investments. By closely tracking stimulus measures in key markets you can identify new business opportunities.
- Master the art of scenario planning: The best way to prepare for the unknown is to map out potential future outcomes, or scenarios. This allows you to plan ahead for potential risks and new opportunities without having to guess the outcome.
- Follow key scenario indicators: Identify early indicators for each scenario to lay the groundwork for agile decision-making. By carefully matching each scenario with predetermined measures you can deploy the right action plan at the right time – helping you to move at a moment’s notice when markets change.
- Get people on board: Everyone from management and R&D teams to business intelligence experts and operational staff need to be on board with new ways of working. Help your staff understand agile principles and practices and how they can be applied in their everyday operations. This will boost your company’s resilience and ability to recover quickly from external shocks.
Looking beyond the recovery
Our research team has identified three transformations that are likely to define the next decade. We have chosen to call them: A digital decade, A decade of sustainable action and A reinvention of innovation, all of which you can read about in more detail in this report.
Adapting to these transformations may seem like a daunting task. But again, taking a stepwise approach will maximise your chances of keeping pace with change. Consider these key recommendations as your starting point:
- Get ready to go digital: The pandemic became a catalyst for digital transformation across markets and sectors and the trend will only continue to accelerate. Ensure that you have the right capabilities and talent to ramp up digitalisation efforts through re-skilling, employer branding & recruitment, M&A and partnership alliances. Prepare for the “splinternet” phenomenon; the division of the internet into various digital landscapes with individual regulations and platforms, all of which will require their own go-to market strategy and potentially server infrastructure.
- Launch your sustainability journey: Sustainability will be a key competitive advantage in the next decade. Begin your journey immediately by developing climate neutral operations and offerings. Position your brand on the international stage to capture opportunities in sustainable growth and green transition investments pledged by governments.
- Shape your innovation ecosystem: Innovation processes are transforming rapidly as old approaches are yielding a low return on investment. Co-creation with external stakeholders is a prerequisite for bringing innovation closer to end customers. Very often this means joining innovation ecosystems outside of your core business and sector. In addition, you may want to set up decentralised inhouse R&D centres in key markets.
- Tap into new growth markets: As the coronavirus crisis takes its toll on economies, the growth outlook may change in the next decade with investors turning their attention to new expanding markets. Government involvement in business is also likely to increase following corporate bailouts and changes of ownership. Identify new must-win markets and opportunities, recalibrate your internal focus, resource allocation and adapt your offering.
- Review your supply chain: The pandemic has accelerated the momentum of trends shaping a new competitive landscape including the shift to regionalised production. Global supply chains are being redrawn in response to changing market demand and to mitigate against the impact of trade barriers, but also to pave the way for industrial transformation. Review your supply chains, conduct risk analysis and cost-benefit calculations for a new operational set-up.
- Rethink your business model: More and more customers are choosing to engage with service-based business models and digital platforms. This trend will fundamentally change the structure of sales organisations, partnerships, localisation efforts and sales and marketing channels for both B2B and B2C. Rethink your business model as digitalisation expands and keep pace with changing customer behaviour in local markets.
Learning to operate in a volatile environment while keeping up with the shift to digitally powered and sustainable operations will be key to future prosperity.
To remain competitive at the global level, Swedish companies need to act fast to integrate the above transformations and trends into their core business and strategic thinking, or else risk being outrun by international peers.
Stay tuned to more insights on the challenges, trends and opportunities shaping the post-pandemic world in our series The New Business Landscape.