The aftermath of the novel coronavirus pandemic has exposed the lack of resilience in many business’ strategies and day-to-day operations. To be better prepared for systemic risks, a mindset of systemic thinking, responsibility and transparency play a pivotal role in designing resilient business strategies for the uncertainties of the future.
The outbreak of COVID-19 slammed most of the world to its knees in a record-breaking time. Countries and businesses are facing unprecedented economic and social challenges. Social distancing has transformed our daily routines in childcare, work, and leisure activities. Many families are coping with the reality of securing their livelihood in the face of layoffs looming on the horizon.
Oddly enough, while a massive amount of businesses are struggling for survival in the short-term, some are absorbing the shock and are starting to bounce back. They are turning the rapidly shifting state of the world into long-term business opportunities. What creates this mindset that makes them so resilient in the face of uncertainty? What are the drivers for reshaping your business to be more future-proof?
Think in systems: No business is an island
Ever since the Industrial Revolution, we humans have viewed the surrounding natural world as something that will replenish itself infinitely. It’s been something to exploit to turn a profit. We’re tracking standards such as GDP and mistaking it to be an indicator of the overall well-being of not just our economies, but also of our planet and people.
Surely, the resulting economic growth has raised the quality of life for many but at the same time, we’re prioritising our businesses over the balance we should strive to maintain with our natural ecosystems and sociopolitical systems. During the current pandemic, the permanently interconnected nature of everything has become very real - the world economy is in a freefall and we’re socially isolated because of a global domino effect caused by a single novel virus.
In order to amp up their resilience, businesses need to embrace the delicate interplay between their own operations, natural ecosystems and sociopolitical systems. To be future-proof means examining how potential future scenarios, even black swan events like the coronavirus, could unfold on a systemic level and what possible implications they could have for your business. It means looking into possible uncertainties and shifts in labour, material, legislative, and financial environments and designing alternative solutions against such scenarios in advance.
Businesses who are turning a blind eye to systemic thinking are exposing themselves to systemic risks such as further virus outbreaks. According to Fortune-magazine, 75% of companies have already reported supply chain disruptions that are likely to lead to throttling down or termination of manufacturing operations.
Act responsibly: The rise of a conscious consumer
The closer crises like COVID-19 come to our private lives, the more profound the effect they have on our behaviour. While there have been some extreme cases of selfish action such as hoarding, many are banding together and taking direct action to maximize collective well-being. Humanity is now probably more in tune with the fragile state of our societies and the environment than ever before.
The outbreak ushered in a rising demand for socially and environmentally responsible products and services. As the crisis drags on, consumers are looking for companies that are taking responsible action not just globally, but also locally. The promise of globalisation is getting backlash in the face of growing concern for our homes, families and close communities. Factors such as what is the social cost or fairness of producing a good or service have started to weigh heavily in whatever we choose to spend our money on.
For businesses, this change in the nature of market demand opens up the perfect window of opportunity to re-evaluate their brand values and turn them into action. The ones that adapt to the novel scenario the quickest have a clear business advantage over others. Of course, no business plans to operate in an irresponsible way, but simply doing nothing to align your values and actions with the new reality may lead to negative consequences for your business.
Be transparent: Full disclosure equals loyalty
When the current pandemic was declared, we came again face to face with a situation where a few facts got mixed with massive amounts of fear, speculation and false rumours. David J. Rothkopf called this phenomenon “Infodemic” already back in 2003 during the SARS outbreak.
It’s natural that a major crisis stirs up uncertainty in people and makes them more susceptible to disinformation than they would normally be. In times of need, we may become primed to believe in anything that conforms with our world view. The more socially isolated we become, the more we fall back on social media as a backup to staying informed about what’s going on in our surroundings. Even though social media too is a legit source of information, it has the potential to amplify the infodemic much like planes amplify the spread of the virus.
Given the influx of disinformation, it’s no surprise that consumers are becoming increasingly wary of businesses’ claims too. As trust in the written word erodes, people demand stronger communication and transparency. For businesses that successfully align their communication and operations with the growing need for trustworthy information, the benefits are substantial. One study shows that 94% of consumers remain loyal to brands that offer complete transparency.
If your business isn't yet demonstrating openness, honesty, and straightforwardness as some of its core values, it may be the perfect time to start doing so. Full transparency to why and how data is collected and how it’s being operated on builds trust. Opening up the steps in your supply chain and value chain will further increase transparency to how you create value to consumers and what the related social and environmental costs are.
The mindset for becoming resilient
Once the crisis passes, we may be looking at inhabiting a different kind of a world. In the new normal, the set of values and actions that resonate with consumers and businesses may be radically different from those of the past. Systemic thinking, responsibility and transparency will no longer be a luxury, they will be imperative for your business to survive in the long-term. At Vincit, we’re committed to creating digital services based on systemic thinking, transparency and responsibility to create a better tomorrow for people, businesses and the planet.
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