Market turmoil has sparked fears of a recession caused by COVID-19. To gain insight into future paths, business leaders need to pay close attention to market signals across asset classes, but also look outside the market for recession and recovery patterns, as well as the history of epidemics and shocks.
The risk of COVID-19 is considered so aggressive across various asset classes that some people fear a recession in the global economy is an induced consequence. Triggering incidents will rapidly set off a chain reaction in an interlocked global economy.
The effect of this pandemic has caused many businesses to fail, for example: Travel industry, entertainment industry, stores. And, of course, these industries will consult in various chain reactions to other economic aspects of business.
Some organizations are much better than others at managing this level of uncertainty. Even some of them are successful. They find opportunities where others don’t and support their organization so they can anticipate fluctuations early and return sooner. These companies enjoy what we call the “uncertainty advantage.” With data, processes, commitment, and the right mindset, other people can build these advantages in their organizations too.
Businesses bounce back and strive even better than before, for example: F&B (online promos, ready to cook meals), in-store shops (online shops), and hospitality (staycation promos)
Almost all companies do multivariate models. Nearly all have protocols to reduce risk and anticipate exposure, and nearly all have business continuity plans to provide operational flexibility. However, the reality is that many organizations do not approach these aspects in the right way. They place a lot of emphasis on the short term and rely heavily on familiar patterns to the detriment of counter-intuitive.
As expectations keep changing, the priority for most leaders is to get through the next few months and quarters. Few companies have the courage to consider making a bolder directional correction or looking for a silver line in an economic downturn that could see their business achieve even greater long-term success.
Analysis by BCG found that there are three sources of uncertainty advantages which can construct your advantages in uncertainty. Those are:
Companies with the Signal Advantage take a broad approach to collecting data, gathering information within a range of addresses, ranging from holistic topics such as economics, environment, and geopolitics to business-specific areas such as customer, market, and technological trends. Instead of tracking 5 or 6 variables, for example, as many organizations do, they track 70 or 100. Advanced modeling tools allow them to fill in this data, develop early warning systems, and plot patterns across different time horizons to see how the impacts grow or weaken, or turn.
No analysis, no matter how strong, can accurately predict the future. But companies with the uncertainty advantages don’t need rigor. Instead, they are looking for chain holes in the form of strategic openings and untapped opportunities. Using simulations, war games and trend forecasting, the team developed strategic choices under a variety of stress-testing strategies and futures that made sense against multiple outcomes. Individuals are encouraged to develop not only ready-made ideas, including new business models, products and services, but also the conditions for success – for example, external alliances, joint ventures, lobbying and other factors that can help push the desired scenario into reality.
The analysis should consider the feasibility study of each scenario in a comprehensive manner, taking into account financial requirements, expected returns, legal and regulatory complexity, market acceptability and technical feasibility. Establishing correct practices and rewarding employees for their contributions are also important. These steps build organizational learning and instill a “what if” mindset that causes teams to consider innovative alternatives as part of their business as usual.
Decisiveness Advantage helps organizations uncover a variety of strategic responses to uncertainty.
Uncertainty Advantages requires the ability to recover from the direct or indirect effects of negative events. Companies that have developed this capability can classify system shocks and quickly restore operational stability without disrupting the organization. To achieve this “resilient benefit,” leaders look at the growing business and macroeconomic environment and think about the requirements they might impose on the organization, the capabilities they might need, the actions they can’t regret, and the plans to take.
A flexible business fosters choice, agility, and attention, so you can find different ways to achieve your goals. They consider the resources they need and begin to lay the groundwork for obtaining them. They also prepare the workforce. Gather lessons from past crises, create emergency protocols for business continuity and disaster recovery, and do preparatory exercises to provide employees with guidance to use. Think early provides agility, eliminates confusion, and reduces the risk of mistakes when negative events occur in the organization.
To overcome disadvantages, companies just need to become better at detecting signals and more decisive in acting on them, and more proactive in building practices. Crisis shows a tendency for companies to step back. By detecting signals, imagining what the world will be like in 3 to 5 years, and what it will take to win the future, organizations are not in the practice of activating their workforce in dire situations and adjusting performance over the years.
This means you need to adapt to customer’s current behavior and retain customers by serving them better. For this, you can use OneTalk by TapTalk.io as an omnichannel messaging provider to provide them with world class customer service.
OneTalk can help you increase your support with one of other features, Mobile Agent, where your agent can handle customers even from their cell phones because OneTalk provides an app that can be accessed from your phone. The other feature is Broadcast Message and Start New Conversation. Broadcast message feature allows you to send messages to multiple recipients all at once. Your marketing strategy will be more interactive with this feature, sending them multimedia content such as photos, videos, and even pdf files. Meanwhile, Start New Conversation features allow you to do proactive chat and start a new case so your business can reach your customers first. With these and a lot of other features provided by OneTalk, you can easily construct your advantages in uncertainty.