In 2020, the world leapfrogged into the next decade, on account of the revolutionary business changes. What do these changes mean for global strategies in 2021? Shortly, we will delve into three global strategies that were preempted by the pandemic, and which will shape the next level of thinking.
Courtesy of the COVID-19 pandemic, the digital transformation agenda was accelerated. Suddenly, working from home, e-commerce, artificial intelligence, cloud computing, and cybersecurity came to the fore. While these innovations had been in the pipeline for a while they would have taken several years to be actualized.
Global Strategy #1: Business Model Innovation
In times of disruption, business model innovation can deliver a lasting competitive advantage. According to the Boston Consulting Group, the average business model lifespan has fallen from about 15 years to less than five, over the past fifty years. Consequently, business model innovation is now an essential capability for organizations seeking to drive breakout growth, reinvigorate a lagging core, or defend against industry disruption or decline.
The businesses that are currently thriving during this pandemic season were quick to adapt to the changes. This trend will be no different in 2021! Organizations will need to consistently and continuously innovate on their business models as they differentiate themselves by being health, safety, and hygiene champions. Businesses will need to be agile and continuously reinvent themselves. They would need to operate efficiently by ensuring that their value chains are optimized and by adopting horizontal and vertical integration business strategies. Although businesses have always had to think about how the market is shifting, it will be more critical in 2021 to review and innovate on their business models to stay afloat.
Global Strategy #2: Enhanced Omnichannel Experiences
Any forward-looking company will prioritize customer experience to reduce churn and increase turnover. To reduce churn, consumers want to be treated as an individual with unique needs. For organizations to build solid relationships with their clientele, they’d need to personalize their omnichannel experience.
There is a need to ensure that the millennials and increasingly tech-savvy consumers are engaged with the company’s products. Short of that, they’ll disconnect and move onto the competition! Businesses ought to automate their processes to drive an emotionally connected sense of loyalty.
The next-normal customers are increasingly becoming omnichannel shoppers. Omnichannel shoppers are more loyal than single-channel shoppers and tend to both shop more often and recommend brands to family and friends.
Global Strategy #3:Sustainability
The sustainability and climate change agenda will take center stage in 2021, as organizations purpose to reduce their carbon and water footprint. As disruptive as the pandemic has been, there is an increased awareness that an environmental crisis could have an equally devastating effect on a company’s bottom line. This acknowledgement will push businesses to increasingly become more socially and environmentally conscious.
As a result of the international lockdowns in 2020, planet earth witnessed the steepest slowdown in human activity since the Second World War. Unfortunately, this duration of time wasn’t long enough to reverse decades of environmental degradation. We expect to see the marketplace embrace greener operations in the form of clean energy and clean tech, to reduce the risk of compromising the ability of future generations to meet their own needs.
To put it into perspective, the International Federation of Red Cross and Red Crescent Societies (IFRC) in its World Disaster Report 2020 warned that climate change will have a more significant medium and long-term impact on the human life and on earth, than the pandemic. The IFRC Secretary General, Jagan Chapagain, stressed that while it looks increasingly likely that one or several vaccines would soon become available against COVID-19, unfortunately, there is no vaccine for climate change.
At the end of the day, the customer is king whichever way you look at it. Everything should be done with the consumer at the epicentre! The next normal consumer will demand much more than ever before. They will tolerate fewer customer service failures and demand better because they know it’s possible. Customers will continue to expect the brands they do business with to deliver on their higher expectations. According to the 2020 Achieving Customer Amazement Survey, a staggering 96.2% of customers were willing to leave because of bad customer service. The “now customer” expects to get what they want almost immediately. This goes beyond a lack of patience with having to wait on hold or stand in long lines. Additionally, people are increasingly choosing a greener lifestyle. Companies are doing all it takes to save energy, lower carbon dioxide, use sustainable materials more often, and streamline packaging.
The authors are management consultants with Global Strategy Consultants and can be reached on email@example.com or firstname.lastname@example.org