Long-term Impact of COVID-19: How companies should plan for the ‘new normal’

What is it about?

The COVID-19 pandemic has had a major impact on businesses world-wide. While eventually it has become clear that the impacts are multi-faceted and far reaching, at the start of the pandemic, companies were concentrating only on urgent or short-term challenges to maintain business and cash flows. This study surveyed 300 companies in 55 countries and 24 industries, from April to May 2020, and confirmed that only 10% of them had planned for long-term challenges based on strategies such as reaction, recession, rebound, and reimagination. In contrast, about 85% had taken measures to protect against immediate threats such as employee health and safety and recession. Nevertheless, it is imperative that businesses tackle long-term challenges simultaneously with the short-term ones.

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Photo by Gene Gallin on Unsplash

Photo by Gene Gallin on Unsplash

Why is it important?

The COVID-19 pandemic is reshaping cultures, trends, and lifestyles and has made it clear that it will result in a ‘new normal’. Once the recession in the near-term has passed, business will need to first prepare for a rebound in demand and then reimagine business models, operations, and products. While companies typically do have approaches to tackling challenges at multiple timescales, these traditional approaches may not be applicable in the pandemic scenario because the pandemic itself is unprecedented and the societal shifts that come with it are difficult to predict. For instance, long-term customer behavioural shifts are unpredictable. Further, in some cases—such as the need for new medical infrastructure, medicines, and vaccines—normally longer-term timelines of bureaucracy have had to be expedited to extremely short timelines to meet skyrocketing emergency demand. Thus, classic strategies based on planning may not be effective for tackling multi-timescale challenges during this pandemic and a novel approach combining an array of strategic approaches is needed. KEY TAKEAWAY To deal with the pandemic's long-term consequences, companies must foster strategic flexibility across different timescales, allowing them to adjust their strategy as and when needed.