We had got habituated to the new normal in 2020. After coming out of the lockdown and with the inoculation drives going on, we thought that the worse was behind us. The second wave that has hit us in 2021 caught us off guard and it is teaching us to fit in with next new normal.
It is testing our business adaptability and agility which we presumed we had achieved while encountering the first wave. In the second wave too, Covid-19 has impacted businesses, the entire ecosystem, disrupted the supply chain and has affected consumer behaviour.
The Global Economic Prospects have envisaged pandemic’s impact on the world economy. The baseline forecasted impact is 5.2 percent contraction in Global GDP in 2020. We are not sure if we have hit the bottom of the cycle as yet with this wave and so it is hard to put a finger on what could be the impact. This also means that we are not certain on how to be prepared for more hard times that may follow.
The global market is going through a severe contraction in growth and a crunch in liquidity. In the coming years, the businesses will require to demonstrate stability or survival at least as predictable growth may no longer be valid. Optimization of resources and increase in efficiency is the essential need of the hour to survive in these tough times as we cannot rely on growth. The economic statistics indicate that it is a hard time for companies that are focusing on growth alone for survival. Businesses will need to increase their metabolism to digest this change in the environment. This impact might force business to change their fundamentals and the basic premise of doing business and they may need to adapt to a rapid change in market realities in the years to come.
Optimization is the key
To navigate through these tough times, businesses need to optimise. In the times to come businesses are likely to experience limited growth, drastic change in consumer behaviour, disrupted the supply chain and scarcity of resources.
It is time for small businesses and big corporations to think of striking a balance between Innovation, Improvement and Jugaad to be in business. Striking the balance is very critical in the current scenario as it is difficult to predict the impact of the rapid changes in the global economic parameters on the various sectors. Businesses are largely focusing on maintaining continuity, especially in their core area. It is time to weigh between cutting costs, driving productivity and implementing safety required for Next New Normal. Keeping this in mind, businesses will have to be selective while exploring innovation or committing investment for innovation.
Innovation is getting initiated in an organised manner with clear goals to do something that has not been done before. Jugaad which is the other side of the coin, is the way of doing something which has already been done before but getting executed cost-effectively.
Improvement is focusing on the optimisation of resources and efficient utilisation of the existing supply chain. There is a sense of urgency to harness process excellence.
In this new normal, the focus areas for attention of improvement are supply chain optimization, improving cash flow, working on capital efficiency, customer self-service, smart sourcing; process automation, implementation of shared services, improving inventory management and many more. When the economy is in the phase of contraction, it is imperative to increase the market share by increasing competitiveness. It is only possible by delivering value beyond the commitment and businesses will have to use a mix of innovation, optimization and Jugaad to tide over this time and survive in this new normal.
Views expressed above are the author’s own.
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