Understand systemic risk and how it caused the pandemic.Here’s the CEO cheat sheet for business strategy after COVID-19:
We can do better on many fronts, and now we have to. The systemic risk that got us into this mess will change to systemic change that will lead us out. Sometimes forced change is good, especially when a system is weak and has flaws. While d igital transformation won’t go away, smart leaders will recognize and leverage their digital operating system to capitalize on the disruption. Many more markets will experience foundational shifts and disruption whether geographic, product or service related.Ĭorporate leadership was already struggling with digital transformation and its pace and scope of disruption. Several industries, and many companies are already facing survival level issues. The $2 trillion CARES Act may delay some of the carnage, but it won’t delay permanent systemic shifts in what people value and how they’ll behave post-pandemic. It’s about renewal and adapting to the paradigm-shifting changes that are already unfolding. The future of business is not about resiliency, i.e., snapping back into form. While many small, medium and large businesses may not survive, every survivor will need to adapt. How consumer behavior can alter a business model, value proposition or competitive advantage and create market opportunity. How a single point of infection can cascade and take down an entire healthcare system along with every human-made system globally.
Systemic thinking is about understanding how things work together. This involves understanding the macro-level issues and impacts, but more importantly the micro-level ones. The essence of this approach is to begin to understand market shifts and opportunities and threats that will arise beyond the obvious. Contemplating business strategy and systemic change as a result of COVID-19 and its permanent impact on humanity is an entirely different undertaking. Many businesses are familiar with systems design and incremental optimization. A much better understanding of systemic risk and change is required by CEOs and corporate directors to navigate business strategy in this new world order. When systemic change happens in, or to a business, business strategy needs to adapt.ĬEOs and corporate directors are the first-responders to these issues and how the new world order will impact their businesses and stakeholders. The changes are also swift and their scale, unprecedented. Regulators have stepped in, competitors will react, business partners will fail, employee motivations will change, politics will remain at the forefront and technology will continue to disrupt.Īll of these forces are colliding at the same time, materially changing the system of business. A shock that will extend well beyond business systems into every human-made system on the planet.ĬOVID-19 has changed economies, social systems, consumer behaviors and what customers value and demand. Start-ups can often “pivot” to renew their strategy and value proposition.īut COVID-19 is now a systemic shock for every company around the world. Occasionally, a survival level crisis can accelerate a new paradigm, such as when a start-up faces running out of money. Systemic change can also often take a long time to unfold. The Journal will not use your name in an article on this subject unless a reporter contacts you and you permit such usage.While e very company regularly makes changes within their business system to optimize, react and respond to opportunity and threat, they rarely make wholesale changes to their entire business system.
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