None of us can be certain what the ‘new normal’ will look like when it comes and this degree of uncertainty makes developing your strategy more challenging, but not impossible. If you are in the process of reviewing your strategy two articles are well worth a read.
The first comes from BCG: ‘Covid 19: Win the Fight, Win the Future’ (https://www.bcg.com/en-gb/publications/2020/covid-scenario-planning-winning-the-future-series.aspx ). The basic premise of the article is that businesses are faced with 3 planning horizons to navigate:
- phase one is referred to as ‘Restart’; planning forhow/what you are going to do when lockdown restrictions start to ease. None of us can control the conditions or timing of the restart but we need to be ready to ‘restart’ the moment restrictions are lifted. The faster you are able to move, the faster your business can start to recover but more importantly, past evidence from previous crises suggests the ‘fast starters’ are more likely to win the immediate opportunities that restart presents. Identifying those opportunities and being ready to chase them down should be an immediate business planning priority.
- the second phase is ‘Fight’: this is the extended phase during which we will all have to operate under restricted circumstances, post-lockdown, until an effective vaccine is available, allowing us all to return to complete freedom of movement. The first thing to note about this period is that it is likely to last longer than many of us think (or hope). The search for a vaccine is moving at pace but be warned, it could take at least 24 months before a vaccine has been developed and administered to sufficient numbers to provide overall protection (which even then would be significantly faster than a novel vaccine has ever been developed and administered before). The second thing to note is that these restrictions will undoubtedly impact short-term behaviours: on-going queues to get into a supermarket (making impulse purchasing a thing of the past?), restrictions on visits to cinemas and restaurants, will we want to go on an overseas holiday, sitting in a crowded plane (even if the middle seat is left free)…………. The third thing to remember is that the fight phase isn’t the ‘new normal’ – we won’t be living under these restrictions forever, but these restrictions will change behaviours in a specific way, for a specific period of time. And the final thing to consider is that the ‘fight’ phase will happen over different time periods in different places. Even when the ‘fight’ is won in the UK, there will still be countries around the world who will be impacted by Covid-19, and some will emerge from the ‘fight’ before we do. Once again, you need to start thinking about your plans and actions to win the ‘fight’ phase now.
- the final phase is ‘future’; this is the ‘new normal’, the post-lockdown era where the arrival of a vaccine has freed us all from Covid-19. What will this ‘new normal’ look like? What habits will we have developed that we’ll take forward into this new world? The good news is that if predictions of a 24+ month vaccine lead time prove to be correct, you have a bit of time to start planning. But if the ‘optimists’ are right, and vaccines become available sooner, you’ll need to start thinking about this sooner rather than later.
The challenge we face with strategy planning today is that much of our past data has become a poor predictor of the future and any data we might gather today is possibly an equally poor predictor of future behaviour, making the future is so uncertain that we have very few ‘knowns’ on which to build a strategy. For the ‘fight’ phase, in the UK, we may have the advantage of being slightly behind other nations in easing lockdown. Studying what’s happening in China, Spain and Italy could provide us with some information to build our medium-term plans around. But for the ‘future’ phase, things are much less certain. This is where the second article I read comes into play: it’s a Harvard Business Review classic, ‘Strategy Under Uncertainty’ from 2020, but is still relevant today. (https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/strategy-under-uncertainty). The authors offer options for strategic planning under four levels of uncertainty: 1) ‘where the future is clear’ (probably our traditional approach to strategy, but not much use for the ‘new normal’) 2) ‘alternative scenarios’, where it is possible to identify a few discrete future outcomes, but it isn’t possible to identify which of these is more likely to happen (perhaps the situation you’ll find yourself in in the ‘fight’ phase; 3) ‘a range of futures’, where the range of possible future scenarios is much broader and even less predictable and; 4) ‘true ambiguity’, where it is virtually impossible to predict or know what will happen. The challenge we face for the ‘future’ phase, planning for the ‘new normal’ is whether you feel your company/industry will be operating at level 3 or 4.
No matter which level you feel you are/will be at, strategic planning under uncertainty forces us to take a different approach: to scenario plan, create and implement a range of different initiatives relevant to those initiatives, to monitor these initiatives as we implement them and adapt, change (or stop) as ‘real life’ data becomes available. It’s a bit like the planning I am used to in developing and launching innovation projects; using test/feedback loops. Under uncertainty, strategic planning and implementation requires significant organisational flexibility – a different way of managing and leading.
If it helps, consider the pioneers who first went to colonise North America: their knowledge of what they were going to find when they landed was, at best, uncertain. They had to plan what to take on the voyage but, I am sure, had to adapt to what they found when they arrived and then continually experiment, adapt and change to create a sustainable world in which to live safely. The situation your business finds itself in today may not be quite so dramatic (but then again it might), but you undoubtedly do have to build your strategy under uncertainty.
The good news is that plenty of businesses have had to do this as they enter new, unknown markets or geographic territories. A myriad of new products has been launched with no real knowledge of the size of the potential market or likely consumer reaction in the long-run (wasn’t it IBM who once said the world market for PCs was five!). The process HBR outline is based on the real-life experience of many companies. In these uncertain times we have to build strategy and deal with these unknowns: as uncertainty becomes the new normal for strategic planning, we have to develop strategy and be flexible in its implementation as if we were pioneers heading to a new world
