It will be quite some time before business leaders understand the full impact of COVID-19 on their businesses. Therefore it is imperative, that they understand that there are two aspects to this which would involve–working in a recovery phase in a pre-vaccine environment, in what could roughly be the next one year or two and then working towards realigning or reshaping their company to survive in a post COVID-19 world. Simply put, they have to win and transform to win in the future. This essentially means CEOs in India as well as globally should focus on four priorities going forward.
So, what would it take to win in the new normal?
Overnight, we witnessed the economic downturn caused by COVID-19 presenting to us a new reality wherein CEOs must discern and adapt. We are now seeing this reality being defined by evolving customer needs, uncertainty and a reversal of globalization trends. For most businesses this challenging scenario has meant a dip in revenues and profits. Basis, KPMG in India’s 2020 CEO Outlook only 33 per cent CEOs in India are confident of the growth in their domestic economy and only 42 per cent are optimistic about growth prospects of their company, vis-à -vis 78 per cent and 84 per cent at the beginning of the year, respectively. However, CEOs in India should not look at the declining performance as the new reality.
It will be long haul until a vaccine is widely available—12 months or more from now. As we move forward, winning in this new reality means implementing long term initiatives which enable business continuity and require active management with competitive positions being challenged. CEOs in India though see a massive upside in being farsighted with 89 per cent of them wanting to build on use of digital collaboration and communication tools according to the outlook mentioned above. This indicates that they are willing to do all that it takes to be in a good position to win in the global market.
Four key priorities for CEOs in India
- Clear guidance and roadmap- In a scenario characterized by volatility CEOs need to exhibit and provide clear guidance. This means they need to set a business objective for the next one year or two. It may also need developing and planning for multiple scenarios in the future as it will enable organisations to increase their reaction time to events of the future. To meet the challenge of realising the business objective, having a team comprising all functional areas is a must, so they are able to fast track actions and effect change smoothly in the next one year or two. The focus should also be on ensuring good wins in tandem with adherence to strong corporate governance processes.
- Taking care of one’s own people- With COVID-19 accelerating the adoption of new work practices like work from home, there exists a wonderful opportunity for CEOs to redefine the future of working. For example–CEOs should take satisfaction and employee engagement seriously as they will be imperative for retaining employees especially when the market for talent becomes competitive in the recovery phase. Prioritizing people and ensuring a safe and healthy environment would be key to keeping people driven in the challenging months that are set to come.
- Winning – The immediate priority is to limit costs and ensure the smooth continuity of the current business model. However, ensuring liquidity and stability would be key to ensuring that the operating model and cost structure of the business can support the next one year of two. In addition to being reasonably leveraged, CEOs also need to focus on actively managing the top line. Crucially, the road towards winning will open up new channels for growth like e-commerce which could provide great opportunities for customer engagement as well as good sales.
- Transformation to win in the future – CEOs have to not only focus on short term profits but also be farsighted and ensure they are transforming to win in the future. Good effort from all quarters would be required to ensure that the business is set up for long term success, keeping in mind the duration of the fight which is uncertain. Activities like innovative offerings, building supply chain resilience and accelerating digital would be key to this goal of winning.
Working towards realising the above four priorities would be imperative to winning and leapfrogging the business in the next one year or two to win the future. Akhil Bansal is Deputy CEO, KPMG in India.
