Big news is looming. The Government are readying to ditch the ‘Stay at home’ message and transition the country to ‘a new phase’ in crisis management. Speculations as to what the future holds abound. Scenario plans are hastily waiting in the wings. In this week’s special Business Briefing, we’re breaking from our usual weekly coverage to pose you some key questions in the run-up to ‘phase two’.
[Accurate as of 8am Thursday 7th May]
1. Do you stand up to scrutiny?
As we’ve said before, we’re on the cusp of a new dawn in stakeholder capitalism. In just a few short weeks, this crisis has shown that it is possible for brands to act in the interests of public safety, philanthropism and true purpose. This crisis has changed the social contract between companies and their consumers – and there’s no going back now.
If the rumours are true, the Government’s guidelines will require businesses in phase two not only to take very considered steps in protecting their customers, but also in protecting their employees. That’s not just their physical safety either – it also includes their mental welfare. But it shouldn’t take a Government mandate to prompt businesses to take great lengths to protect their staff. Even if common decency doesn’t make that an imperative, remember we are in an era of ‘glass box brands’, where a company’s value is increasingly measured – and judged - by its internal culture.
We are advising our clients to overcommunicate their efforts to protect staff and consumers – and look for innovative ways to provide real protection. Singapore has gone so far as to introduce a new hygiene audit system to reassure anxious travellers. Opticians Warby Parker have created a new instore app to take glasses measurements, reducing staff and customer physical contact. Stores are redesigning to streamline shopping experiences, minimising tactile product interactions and in-store conversations. What lengths are you pursuing to protect your staff and customers? How are you communicating that?
2. Can you empathise with your consumers?
Anxiety levels have deepened. Demand for mental health support is surging, as are conversations about the wellbeing toll of the crisis. For many, financial circumstances are precarious and deeply worrisome. Household relationships may be deteriorating. All of this against a backdrop of deep and legitimate concern about personal or family illness.
At the same time, we could be on the cusp of new emotional milestones in the crisis. The first trip to see close friends or family members. The first guilt-free picnic in the park. The first trip away from the immediate proximity of the household. What role do you have to legitimately, and appropriately, play in these emotionally-charged experiences?
In short, do you truly understand your consumers’ emotional states? Can you anticipate their fears, hopes and behaviours, as social distancing lifts and yet the threat looms large. Do you know exactly how to calm their fears and make their lives easier? Do you know how you could surprise and delight them?
For sobering insight into the everyday panics and struggles of life post lockdown, we suggest reading this first-hand account from a Bejing architect returning to the office for the first time. It is chilling and dystopian in equal measure.
3. Do you know how your consumers' behaviours have changed?
We’ve seen some seismic shifts in consumer behaviours over just a few short weeks. TikTok adoption has surged, with the social media platform shifting from Gen Z enigma to a mainstream media player. Gaming audiences have swelled. Even the Vicar of Dibley is using Zoom.
At the same time, shopping behaviours are changing. Consumers are generally spending longer researching purchases, but micro-indulgences are still craved. Under uncertain financial conditions, some consumers are scaling back discretionary spending or otherwise trading down. Consumers are also wary of returning to physical shops, with almost 50% reluctant to return to shops ‘for some time’, while 40% say they will still shop online more frequently. We can expect an uplift in contactless payment preferences and we’ve seen new behaviours in virtual experiences and shopstreaming.
Have you been keeping tabs on your consumers’ behaviour? Have you been segmenting your base to identify who is still spending and who is scaling back? Are you rethinking your customer journeys with digital behaviours and new preferences in mind?
4. Do you know your new markets?
Concerned about your current base under these circumstances? Worried about how to claw back lost revenue? Have you been looking at opportunities in new markets?
Our favourite example of smart new market shifts comes from some savvy players in Hong Kong’s hotel industry after the SARs crisis. With international travel still heavily restricted and several months of lost revenue to recoup, they looked for new, smart and quick ways to boost RevPar. They noticed that international travel bans were stopping Chinese students from visiting the UK over the summer holidays to take English language courses. To capitalise on the demand, the hotels set themselves up as English language summer schools, recruiting specialist teachers to support.
What efforts are you taking to explore new market opportunities?
5. Are you culturally geared up for rapid decision-making – and potential pivots?
Related to this, how organisationally prepared are you to make lightning fast decisions and think like a start up? Do decisions have multiple gatekeepers and miles of red tape? Or can you pull together quick cross-functional, agile teams to create and test new solutions? Are you familiar with design thinking and sprint principles? Are you speeding up decision making through data and analytics?
We’re not asking these questions purely from a crisis management point of view. As we noted before in this remarkable case from Wuhan, there’s definitely value in the ability to shift strategy quickly to better cope under Covid-19. But this is just the start. Take manufacturing – we’re about to see five years worth of innovation in this space in just 18 months. In this new context, rapid-fire decision-making is crucial for survival and staying competitive.
6. Are you culturally geared up for imaginative and innovative thinking?
As businesses naturally look to drive efficiencies and reign in spending, creating space for reflection, being playful, encouraging experimentation – and failure seems counterintuitive. But we would argue they are essential steps - and require repeated practice. Responding to this rapidly changing landscape and finding the new growth opportunities within it requires cultural change to drive imagination and innovation.
Much has been said about the importance of agile teams and approaches to better cope with today’s demands. We absolutely agree with that. But we’d also argue that assembling an agile team can be futile if you don’t have a company culture that encourages frank and open discussion, tolerates failure and accepts ‘less polished’ solutions. What are you doing to spur and support sustained imaginative and innovative thinking?
7. How developed is your digital strategy?
It’s OK! Answer honestly, have you been making your digital strategy up on the fly over the past few weeks? Or has this been a challenging, but not seismic, shift from your usual programmes? Did you have a digital vision and roadmap in place pre-crisis? Do you recognise the need for one now?
We know digital strategy projects were not always at the top of business’ agenda pre-crisis. It wasn’t always easy to secure c-suite buy-in. The term ‘digital transformation’ is a horrible one, loaded with misconceptions about heavy costs and arduous processes. So you put off digital strategy decision-making – that’s OK. But we’d argue that it’s now more important than ever to set your digital strategy in place with clear actions and steps for ongoing developments.
To those internal naysayers that argue consumers will ‘return to normal’ post-crisis, we say sorry folks. That ain’t going to happen – consumer behaviours have shifted too far for that now – and so too have your employees’. Now calls for renewed focus on customer needs, clear problem-framing and a new spirit of innovation integration through end-to-end consumer journeys. It also calls for reappraisals of existing operations, digitising and embedding improved data analytics and upskilling teams to enhance customer centricity and drive operational efficiencies.
Good luck out there!