The coronavirus sent the world into a frenzy in late 2019. Since then, many leaders have had to make tough financial decisions and introduce significant changes to stir the boat of their business to the other side of the pandemic and the shores of survival.
Now that businesses are back to work after a summer break that was far from normal and without a COVID-19 vaccine yet available, the question is how to re-energize the enterprise at this time of stress, fatigue, and uncertainty.
In a recent report, McKinsey says one priority to achieve this goal is to act rather than react and rebuild for the longer term.
“Not only do leaders need to act now, they need to act boldly,” the consulting firm wrote, adding that history shows companies who made substantive changes fared better coming out of downturns than those that did not.
Of course, there are many different ways to lead, but McKinsey analysts argue that, regardless of the type of business or geography, ten actions, in particular, can help companies emerge stronger in the months ahead.
“Companies have had to make so many changes so quickly—often with startling success—that leaders have every reason to believe that they can do even more. Of course, not every company needs to take all ten actions; conditions differ. But we believe that they cover the range of possible activities that fit with the situations in which today’s leaders find themselves,” the report reads.
1- Think of the return as a muscle.
McKinsey regards returning as “a muscle that needs to be exercised, not a plan to be executed once or a date to be achieved.”
It says companies need to exercise certain capabilities, such as the willingness to change plans and manage structural shifts, as they return from the unprecedented pandemic.
“Handling the crisis is a marathon, so the emphasis should be on reinventing business models for 2021 and beyond, not so much on protecting 2020.”
2- Focus on high-impact actions.
Actions that are best for the business will differ by company but could include technology-enabled next-generation operations, automation of service-related processes, and analytics-enabled engineering productivity, the report noted.
3- Rebuild for speed.
It is more critical than ever to get things done fast and well, McKinsey says, adding that what used to take a week must now happen in a single day.
To do so, the report suggests that companies should cut non-priority initiatives to free up leadership time, speed up decision making, deploy nimble teams, redeploy talent, and empower tomorrow’s leaders to take responsibility today.
4- Re-imagine the workforce from the top down.
Certain employee segments may be under new forms of stress, such as caretakers, parents of small children, and isolated single people, and McKinsey believes that it is paramount to identify them.
“Consider changing how work gets done, whether that’s through job sharing, flex teams, or hot-seat changeovers. And continue to invest in learning.”
5- Make bold portfolio moves.
To position for strong growth in 2021, the report says companies need to make smart portfolio moves.
It advises leaders to get rid of business units that do not contribute to future growth and instead focus on finding new, transformational growth, areas.
6- Reset technology plans.
Technology investments should be reset for value and speed and companies should aim to raise the technology quotient of all employees, McKinsey analysts argue.
“Cleansheet the tech budget for 2021 rather than working off the backlog. Ensure that tech capabilities are mapped to sources of customer value,” the report adds.
7- Rethink the global footprint.
The consulting firm says the coronavirus outbreak exposed the vulnerability of just-in-time supply chains.
Given this fact and the diminished labor-cost advantage of offshoring, the report recommends that companies take a hard look at how and where they operate.
“That could mean reshoring or multi-shoring operations and developing regional—rather than global—strategies.”
8- Take the lead on climate and sustainability.
According to McKinsey, two ideas for connecting sustainability to business opportunities are to embed sustainability into business by design rather than as an add-on and to explore industry consortiums for setting new standards and creating large-scale impact.
9- Think about the role of regulation and government.
“As governments continue to act as payers, lenders, and insurers of last resort, their reach has extended into all aspects of business,” the report says.
It adds that companies should work with them on top priorities, such as reskilling and building digital infrastructure while trying to gain insights into social shifts that could inform legislation and regulation.
10- Make the purpose part of everything.
To navigate uncertainty and keep employees engaged and productive, McKinsey says a strong sense of purpose is necessary.
“Now more than ever, companies must match their actions to their words. Embrace stakeholder capitalism—the idea that successful companies serve more than just the bottom line.”