Warm welcome to our webinar the 19th November: Managing the Cost of IT Spend in Manufacturing.
Since the 23rd March 2020, when the UK transitioned overnight into a self-enforced national lockdown in an attempt to curtail the transmission of COVID-19, executives have been almost entirely focused on damage limitation to their people, business infrastructure and trading position. As we now emerge from lockdown, in the absence of a viable vaccine and attempt to manage the further spread of the virus by local, less economically damaging measures, we must focus on other important events looming large on the immediate time horizon. If not handled correctly and with knowledge, insight and experience these events will be as equally damaging to many of our UK businesses as the virus itself.
The level of entrepreneurship in an economy is cyclical, and historically precedes the economic cycle. The post-pandemic recovery of the global economy, nations and value chains will rely on the level of entrepreneurship to increase and lift new and existing organisations and ultimately whole economies. Never before in most people’s working lives has the entrepreneurial spirit been more important for organisations to survive, innovate, explore opportunities and thrive through the down-turn triggered by the pandemic and beyond.
As we return to the workplace and attempt to emerge from beneath the shadow of COVID-19 we will see that, for most organisations around the world, the pandemic has laid waste to the P&L and Balance Sheet to the extent that they now both exhibit significantly more red than black. Undoubtedly, planning for and executing a successful recovery will cost money. So, every function in the organisation will now be under scrutiny. Not least those functions previously classified as “indirects” or “back office” such as finance, legal, human resources and information technology, etc. Because money is tight, and the capital markets are hesitant to lend on reasonable terms in the present uncertain times, all internal costs will become a focus of attention.
Every executive running a busy organisation has, at one time or another, stared through the office window and thought “… if only I were King (or Queen) for a day and could just stop the business merry-go-round for long enough to re-shape and re-position my business it could all be so very different...” Well, probably none of us will ever be a King or a Queen. And, in any case, there is a wise old idiom we should remember which asserts that you should always “be careful what you wish for, lest it come true”. Never has this been truer than in respect of the COVID-19 pandemic. That certainly stopped the business merry-go-round for us all, in no uncertain terms. Having been on forced lock-down for several months now we have all had plenty of time to watch and reflect on the damage it has done to our industries, businesses, suppliers, customers and markets.
While there would seem to be little to thank COVID-19 for it has forced us all, as business executives, to confront an unspoken truth. Since at least the dawn of the digital era, however you want to recognise that - be it the widespread use of the internet and the development of broadband; or the creation and proliferation of connected mobile devices in our commercial and domestic lives – we have never really needed to continue working the same old way we always have. We have all succumbed to one of the most basic failings of the human condition - the unconscious bias toward the maintenance of the comfortable norm in the sense of trudging each day to the office or factory and back while comprehensively failing to rapidly grasp the competitive advantage available to us from the advances in, and convergence of, all the technologies we have invented. So, just like the Luddites of the 19th century, we must now re-consider our options lest we continue sleepwalking towards our own demise accelerated by the onset of the pandemic.
We have entered into a major shake-up of the economy, possibly of a magnitude of the great depression or the post WW2 period. Although major corporations have published better than expected Q2 reports recently, the market situation has made many companies insolvent and several governments have introduced legislation to avoid hostile foreign take-over’s of their countries’ otherwise proud and normally thriving businesses.
Many are worried that sustainability will not be prioritised as societies and businesses are gradually recovering from the effects of the pandemic. Such concerns are based on the observation that companies as well as consumers are struggling just to survive and that any investments whatsoever in sustainability will be considered a non-affordable luxury.
As we emerge from beneath the shadow of COVID-19 and return to the workplace our thoughts begin to embrace the uncertainties that confront us. More especially, how best to quickly restart our organisations in an environment where the rules are yet undefined, but likely to be very different than before. What this pandemic has taught us is that we need to configure our organisations differently. They need to be much more agile, yet inherently more robust. And, we need to accelerate our restart process to claim first-mover advantage in a marketplace that will very likely be much smaller, more selective, more aggressive, and very much more competitive than before. All this speaks of an organisational model that has an inherently flatter structure, distributed leadership, wider spans of individual control, devolved authorities and accountabilities, higher levels of visibility and rapid decision-making capabilities. Intuitively, this means the business can be continually tuned to operate at maximum effectiveness as a closely knit entity without the historical stove-pipe behaviours, tribes and process encumbrances that have existed before. It also requires a closely aligned, properly integrated technology infrastructure to help support, enable and drive it. Welcome to digital acceleration!