While many businesses still struggle with the immediate effects of the Covid-19 pandemic, it is the purpose of strategy to look at the longer term—to the time after the crisis and beyond. This means that strategy is less a matter of responding to the particulars of this crisis, and more a matter of preparing for a robust future.
To do this, it is essential to address key trends. Some of these trends are industry specific. These concern only specific products, markets, or regions. Other trends are “mega trends” that were there before Covid-19 and are still there. Examples are climate change and population growth. Covid-19 has no direct effect on those.
But there are also trends that Covid-19 has put in motion, accelerated, or altered significantly. They were there already before the pandemic, but they have come to the surface in a new or more impactful way as before—and in a way that they need to be part of every business strategy for surviving and thriving the coming five to ten years. The following four stand out.
Trend 1: Further Digitalization
The most obvious of the four trends is further digitalization. This trend is obviously clearly going on for decades and will probably go on for many decades too. To see this, we just have to look at the most recent version of Gartner’s annual Hype Cycle of Emerging Technologies. Of the 30 technology trends listed in the 2020 version, there is only less than a handful not related to IT.
But it is not just more of the same. In many ways, 2020 has marked a change in how digitalization has an impact on business. Probably still working from home while reading this, we all experience this: remote working via Zoom, Teams and other applications, as well as e-learning and many other ‘e’ experiences have taken a flight since the start of the Covid-19 pandemic.
As Gartner mentions in its Strategic Predictions for 2021 and Beyond, these trends will continue to influence or lives, both privately and at work. As they predict, for example, by 2025, “40% of physical-experiences businesses will improve financial results and outperform competitors by extending into paid virtual,”75% of conversations at work will be recorded and analyzed, enabling the discovery of added organizational value or risk,” and “content moderation services for user-generated content will be surveyed as a top CEO priority by 30% of large organizations.”
While these are just some examples, they stand for a development that has been set in motion and which Covid-19 has pushed in certain directions. Therefore, it is safe to say that every business needs to embrace further digitalization as a key trend in its strategy.
Trend 2: Responsible Business
Another trend that we already witness for a number of years is an increased focus on responsibility, sustainability and transparency in business, and also at consumers. The time that business could merely focus on profits and shareholder value maximization seem over. Of course, such companies still exist, and they may even prosper financially. But the mindset has changed.
An example is the “Millionaires against Pitchforks,” a group of more than hundred millionaires who spread a letter during the Davos 2020 meeting of the World Economic Forum in which they ask governments to make them pay more taxes to solve the inequality problem.
Other examples are that the trend towards more sustainable and responsible business has driven the car industry to make the transition to electric vehicles and is driving energy companies such as Shell to shift to sustainable forms of energy. Furthermore, the Triple Bottom Line and the UN’s Sustainable Development Goals are increasingly embraced by businesses all over our planet.
Along the lines of the trend behind these anecdotal examples, we may say that every business needs to embrace responsible business as a key trend in its strategy.
Trend 3: Resilient Organization
Until Covid-19, only few organizations thought systematically about resilience. The primary focus in business was—and still is—on efficiency in its various forms: cost-cutting, lean, profit maximization, growth, and so on. While this has led to prospering organizations, it has also led to organizations that are fragile, as Covid-19 is painfully revealing.
As summarized in this article, the efficiency paradigm is deeply embedded in our thinking about business. So deeply that many might not even recognize it as a paradigm anymore. But it is a paradigm—a way of looking—and not an objective truth that business should be all about or even primarily about efficiency.
While the previous two trends are actual trends, for which supporting data could be found, it is probably still too early to call the resilience trend and actual trend. There clearly is more talk about resilience today. Business resilience, for example, is one of McKinsey’s recent trending topics. However, whether the attention to resilience will stay once the pandemic is over, is hard to say. Maybe the focus will switch fully back to efficiency.
But nevertheless, in a world where the next pandemic or any other type of crisis may happen any time, every business needs to embrace resilience as a key trend in its strategy if it is to survive and thrive in the face of such crises.
Trend 4: Good Employership
While it is not an actual English word, the final trend is one toward good employership (”werkgeverschap” in Dutch). It means a being a good employer, being good to one’s employees by offering working conditions in which they flourish and feel good. This includes paying a proper salary, but also providing employees with a certain degree of autonomy and control over their work, a good work-life balance, and an inspiring, safe and healthy work place. In other words, it means taking care of one’s employees.
This trend was already going on pre-Covid-19. With new generations entering the labor market, ideas about careers and work are gradually changing. Employees are increasingly looking for jobs that fit their idea of a proper and meaningful life. This means they focus more on what they like than on the necessity of having a job—I’m speaking primarily of economies that allow this luxury position with respect to jobs, realizing that this does not apply everywhere.
The relevance of this trend, though, is growing. More than ever, the job market is becoming the main market that matters to organizations. In many industries, especially technology-based ones, the shortage of skilled people is the main barrier to growth and continuity—not a lack of demand from the conventional market side. This makes that these organizations’ primary concern is how to attract and keep the right people. Good employership is needed for that.
Covid-19 is accelerating this trend. It has given employee safety more priority to make sure that employees can work safely, no matter what. It has also challenged basic ideas about the meaning of an office, the possibilities of working from home or anywhere, what work-life balance really means, and whether or not traveling is necessary.
In short, in a world where skilled people are scarce and increasingly demanding, every business needs to embrace good employership as a key trend in its strategy.
Are you already embracing these four trends in your strategy for the next few years?