WHEN PANDEMICS hit, it brings into question: What is the strength of your organisation to perform if the operating environment shifted? It creates opportunities and brings disruption. Let’s understand this in the context of ecommerce, online transactions and the local environment.
I would say that this conversation shouldn’t be happening in 2020; however, the realities are live. The growth of e-commerce is no secret and I need no data to convince you of same. E-commerce is a function of convenience, logistics, payments and supply chains. There are currently over 30 plus shipment couriers operating in Trinidad and Tobago with the GORTT in 2016 even implementing a 7 per cent online tax as a means of curbing the annual spend of over US$150 million via ecommerce transactions. If I were to add to this, I would include the growth of credit card penetration rates and the constant demand for VISA debit cards as products of this ecommerce growth.
Now one may say: How can so many of our large ‘market leaders’ exist without online or digital presence. That’s where the growth and opportunities exist? Walmart existed decades before Amazon, Blockbuster before Netflix and the current iteration of fintech challengers before many banks or credit unions.
What does this mean? Incumbents must always know the forces driving their consumers otherwise their timeline is definite and disruption occurs. Consumers will never tell you that you weren’t meeting their needs until an alternative starts gaining market share. Consumers always remember that which you didn’t do when they knew you could. Remember Britannica?
They were heralded as trusted information sources. Can they still hold that position with the likes of Google and Bing, NOPE! Was it a bad product? Nope. Have a think on it! Experimentation and pushing consumer limits [in this case – almost basic limit] seems expensive until you realise the cost of the status quo. That being said, with the statistics quoted in Point 4, I think we should be seeing quicker transitions of many of our retailers and services to have a mix of online and offline presence as basic strategic growth objectives in 2020 and beyond. Your offline brand equity will support your online brand push. I would further add that it will assist to the overall nature of the market. Experiment! Many of the small and medium-sized and enterprises especially those operated by digital natives, can identify. Keep scaling. The market has clear opportunities once facilitated.
The role of people in creating critical consumer value:
As the COVID-19 news hit and these thoughts came across my mind, I wondered how many local companies are truly prepared, by having a full scale of online human operations and online consumer interfaces. The aim of many companies should be to develop critical value which is a function of its strategy, finance and human capacity. Let’s focus on the human capacity for a bit. Systems such as remote work should not be only deployed in the context of business continuity.
Remote work has been a topic of discussion over the last ten years, with a plethora of information on the Future of Work. PricewaterhouseCooper’s Preparing for Tomorrow’s Workforce 2018 provides an excellent read. While the results of remote work are mixed as with everything else, let’s have a think on it. Earlier, I would have stated that companies are products of their people. As a leader, one must know what makes your employees become better.
Can employees function better by having one day work from home which enhances mental capacity, which is positively correlated to employee output which then converts to customer engagement and revenue?
As an organisation leader, one must ask the aforementioned questions. Remote work is only one aspect in the context of COVID-19, but now is a good time to look at your organisations valuation of people in the context of your strategic growth. I would further say that Remote Work isn’t something to be deployed in times such as these, but it should be a normal function of a business building for the future.
Management expert Simon Sinek famously stated: “Many business leaders don’t know the game they are in.” One aspect of this conversation was the focus on millennials for example. The drivers of main contributors of your workforce over the last 30 years is completely different to that of the upcoming 30 years; however, have your human capacity valuations and framework changed? It’s a good time to have this discussion. Fortunately, I would have had the opportunity to be schooled by one of the famous global thinkers of all time, Clayton Christensen [The Innovators Dilemma] and one thing he always made clear is that a company is a function of its people, who are exact mirrors of those whom they serve. Remember this, human resources is a function of people, policy and procedures; they are all independent drivers. Disruptive growth occurs when business leaders either align or misalign human capacity with strategic drivers.
P3: Market Success and Business Infinity: What drives the success of a business?
Let’s break it down quickly. A business can be successful based on:
— Creation of critical value within a competitive market
— Lack of competition and alternatives
— Regulatory Burdens, which limits entrants
— Operational Favours [subsidies] which contributes to cost differentiators
Similar to the previous points, often when analysing market leaders, one fails to understand the context of what is considered a market leader, in addition to what really drives success?
How can our four main commercial banks exist by literally offering the same suite of products [must give kudos to one of our local banks innovating in the areas of payment and wearable technology]?
Another question can be: How can Pennywise and other large scale grocery and retail chains operate without omni-channel experiences, all aiming to serve a local customer driven by global trends, while participating in the global market? The answer is, there are no scaled alternatives. This does not equate to – There is no demand. Let’s use the banking sector for example. Globally, we are seeing the unbundling of banking and wider financial services. What’s fuelling this growth? Banking is a function of trust, plus ability to serve the customer. If no alternative exists, the incumbents will experience continued growth once the trust remains intact. If an alternative appears, once trust is intact, they experience growth via customer usage.
As an organisational leader building your organisation, it’s not always best practice to use your market leader as an upper limit comparator, unless you truly understand what’s enabling their success. Always aim to focus on the consumer and keep iterating on your need to constantly exist. Number 1s always get replaced, we all know the stories of famed names…your aim is to continually exist and that is determined by your consumers.
In concluding; what does it all mean? In the simulated case, the COVID-19 will definitely hamper our economy. However, it helps to paint a clear picture of competitiveness and preparedness for many of our local organisations, including those considered market leaders from a corporate strategy perspective. In the current global environment, it should be cases of extending already existing practices; however, if this is not the case, it’s time to start. As a business leader, seek opportunities to evaluate and align your institution. In the same manner SARS spurred e-commerce in China which is now above twice that of the US, there are opportunities for you. What if you realise that remote work helps organisational output? What if it makes you realise that you need to focus more on your people framework? What if it makes you realise that you need to have an omni-channel experience for your customers?
COVID19 will pass, the impact will be calculated, but what we do know is that business will continue. One wouldn’t wish a virus to enable that which should be normal, but disruption usually forces companies to act. We are building organisations dealing with global consumers. Don’t build as a response, but as a means of becoming a global player. Game on!