Manish Sharma, group chief executive of Accenture Operations, shares three principles for agile operations to overcome the many challenges businesses are expected to face in the near and long-term due to the pandemic.
How can businesses plan for unknown business disruption? It’s long been an important question, but COVID-19 has given it renewed emphasis. The pandemic has shown that large scale disruption is not a one-off event. Uncertainty can persist as events unfold, but enterprises must embrace change and continually course-correct at the pace it occurs. This means strengthening the ability to predict disruption and change tack as it is required.Â
While this is a challenge for businesses, I’m encouraged to see that it’s one that many are approaching with a spirit of reinvention. According to a recent reportOpens a new window from Accenture, more than three-quarters of business executives plan to redesign how staff work, accelerate digital transformation plans, and fundamentally change how they engage with customers. Necessity is the mother of invention, and in this case, it’s leading to a new generation of more agile and responsive companies. That can only be a good thing.Â
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The “Headwinds†Buffeting Business Operations
As the pandemic has played out, we’ve come to realize that this crisis is going to ebb and flow. At times, it may feel close to normality, and sometimes, not so much. This means business operations must be engineered to continually turn the change you see into the impact you want. At present, three “headwinds†remain in the center field as businesses plot a course to recovery.
In the absence of a united federal-level response, individuals must decide for themselves what is and aren’t safe. Meanwhile, businesses must adapt to fluctuations in consumer and employee expectations not clearly understood. How, for example, can a restaurant chain manage its resources in a world where demand is hard to predict, and employees choose to stay home?
There’s also the issue of regional divergence and the economy. From a regional lens, no two countries or even national regions are responding to the crisis in the same way; that creates significant challenges as they try to roll out policies and procedures across multiple jurisdictions. As far as economic certainty, while the U.S. fiscal stimulus package was initially successful, long-term prospects are far less certain. Without knowing what support will be available to businesses, effective planning becomes all the more difficult.Â
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Three principles for Agile Operations
What can businesses do to navigate this uncertainty? We’ve seen three key principles that can help companies anticipate change and alter their path accordingly.
1. Reset strategic decision-making
A decision should not be set in stone. Periodically revisit the assumptions you’ve made about critical uncertainties and identify gaps in understanding that may have arisen since they were first defined. Determine which mitigating actions to accelerate, which to continue as planned, which to stop, and whether any new measures need to be initiated.
2. Redefine investment plans
Model outcomes, creating an updated view of the impact on your P&L, as well as credit and liquidity headroom. Where areas of overcapacity are identified, reset cost structures to what they ‘should be’, creating investment capacity for areas that are more likely to see growth across scenarios.
3. Automate early warning systems
Invest in early-warning data systems that increase your ability to monitor how the critical uncertainties are evolving in real-time, and how they are impacting your internal metrics against your implied base case.
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Own Your Future
Given the scale of the challenges facing us today, as individuals as well as business people, it can be all too easy to give in to feeling powerless. But the businesses that will make it through and thrive in the years ahead will be those that take charge of their destinies and look to get ahead.Â
These companies will continually monitor events as they unfold and course-correct time and again, outmaneuvering uncertainty by predicting, preparing, and responding. They will also accelerate their digital transformations, embracing cloud, AI, analytics, flexible IT infrastructure, and intelligent operationsOpens a new window to enable them to lead through insight and agility. These businesses will be alert and ready, characteristics that will leave them well prepared for anything the future has in store if maintained beyond the present crisis.Â
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