In the simplest form the future success of any organization strategically relies on two factors upon which everything else rests. First is the amount of change in the operating environment of the firm in both degree and speed. The second is the capability of the firm’s management in both aggressiveness and responsiveness.
In essence, this pandemic has thrust a number of businesses into a life threatening crisis that they otherwise would have never experienced. Caught off guard a number of organizational leaders are finding themselves needing to be more strategic than ever. In an effort to remain solvent and avoid closing their doors permanently, some are doing their best to contribute to supporting solutions. Top executives find themselves propelled into remaking, even temporarily, who they are as an organization. We have witnessed automakers converting their plants into ventilator manufacturing; event marketing agencies applying their engineering and custom fabrication expertise into building temporary hospitals; 3D printing facilities producing face shields; fabric graphic creators sewing facemasks. And yet, many of these same leaders who figured out some way to contribute to today’s cause, are challenged with envisioning their future. All they see is unfamiliar and unknown. Many are asking what the new “normal” will look like. Which quite honestly I think Patsy Clairmont put it best when she said, “Normal is just a setting on your dryer”.
The need for strategic management is rooted in change. Whether an organization can allow that change to be forced upon itself, or they need to create it to succeed over the horizon, depends upon a number of factors. For most of the aforementioned experiencing sudden change of a significant degree is new territory. In an effort to remain operable they reacted as quickly as they were capable. Those who responded more swiftly and aggressively laid the ground work for a higher chance of survival. The coming weeks and months will tell us how successful their efforts.
Automakers albeit may not yet be as adept at changing as quickly as they may like. However, they are by no means new to the impact of global socioeconomic and sociopolitical events upon their operations. “The Big 3” as we call them here in Detroit, faced increased international competition and advancing technologies beginning in the 1970s. Since then they have been forced to think and perform differently. Despite what has occurred in the last 50 years including the bankruptcies in 2009, we see today that these same domestic automakers recognize the need for strategic partnerships with technological innovators. They are showing signs of understanding the value of creating their future rather than just reacting to it. We see this as they strive to develop autonomous vehicles. The mindset of 50 years ago more than likely would have ignored the opportunity.
There is no better way to illustrate the example of firms creating their future than looking at organizations driven by technology. To excel and create profits these entities must be equipped for continual change. They constantly pour resources into their creativity. Their goal is to achieve a non-stop effort to up their technical savviness by manifesting the next advanced gadget or software service. These type of companies know they must create their future environment to succeed, or their competitors will create it for them. Apple and Microsoft are the two most infamous namesakes in this category who lead the way. They have lived in extremely competitive ever-changing environments for decades. Consider for a moment that if Apple was not so innovative or forward thinking. Their stock value would be extremely lower at best. And we could all very well be carrying around mobile devices with hard keyboards (i.e. BlackBerry).
The question remains for those organizations impacted by COVID-19 who are not used to such dramatic change. If they survive the initial deep and broad shut down of the economy what’s next? How do they reopen their doors and conduct business? Quite honestly it depends. They will need to take a careful look at their entire operating environment, not only including competitors but the products or services they offer. If their previous business model relied heavily upon large crowd gatherings such as trade shows or live events, then things will look significantly different. It will take additional time before things begins to stabilize and return back to any semblance of the past.
The near future to them right now is discontinuously familiar and only partially predictable at best. Organizations in industries like these must remain entrepreneurially minded in their aggressiveness. They must seek new change in the ways of doing business. Their leadership will need to continue these efforts at full speed forward until the factors impacting their operating environment subside. Once they can begin relying upon extrapolating information from the past, and with fair accuracy forecast the future, then they will start to witness some “normalcy”. Stability in some form will begin to return.
Currently the key to moving in that direction is primarily in the hands of our government and the supporting private sector firms. As the effects of the outbreak begin to decrease the imposed restrictions and constraints will start to shrink. Consequently, the degree of environmental turbulence will begin to settle and things will eventually become familiar. If COVID-19 reoccurs in the future as some are predicting, we will have experience on our side. We will all be much more prepared and much more adept at handling its affects, in both our personal and business lives.
Roger Sovis is an Operations Management Leader and graduate of LOXXIX. If you have any questions regarding this article or issues related to Strategic Management, you may reach him via LinkedIn.