Success factors for companies in a post-pandemic world
The world has changed with Covid-19: it is even more competitive, more digital and competition is increasingly global. It is facing this new situation that the question arises again: what are the critical success factors for businesses of the future?
The old formula "align people, technology and processes around a winning strategy" will not change post-pandemic. The big change is essentially in how organisations should put it into practice.
Let's start with the first vertex of this virtuous triangle: the People. The main challenge today is to attract and retain talent, which was already scarce and for which the pandemic has accelerated the shortage, especially in the information technology sector. This is an area where adopting remote working has already revealed - and will continue to reveal - dramatic consequences for organisations. The new competitors for Portuguese talent are no longer just national companies or entities operating in our geographic area. Currently, there is a large universe of European companies hiring remote workers in Portugal.
In this context, it becomes critical to invest in the development of talents, to invest in staff training, in combining skills, in bringing companies closer to universities (for the opportunities in attracting talent) and in a retention strategy based not only on remuneration (as was typical in the past), but on the permanent growth of employees.
No least important, to empower the workforce, will be finding the right balance between face-to-face and remote work, in a future that involves, in many organisations, the adoption of a hybrid model. It's, therefore, created a new challenge: After finding and retaining staff, it is necessary to adopt the most appropriate model that maximises the workforce. The pandemic forced the adoption of remote working and allowed us to quickly realise the advantages and disadvantages of this model. This has brought several new issues to the centre of the discussion: how to manage the career of remote workers? How to ensure they're not discriminated against face-to-face workers? What is the balance, in terms of remuneration, between them?
Some American companies, such as Google, already index the salary not only according to the employee's function, but also the cost of living where he or she lives. Others are moving towards task-based pay models for remote workers, abolishing the old fixed-wage models for these workers. Resolving all the issues and find an equilibrated model will be a critical factor for business success post-pandemic.
Leading onto the second vertex, the Technology and Processes, we should bear in mind that the pandemic has accentuated the need to take the leap to digital. Some of the consequences were immediate: more videoconferences, less travels, more automation, more remote working, increase of e-commerce and changes even in sectors which we thought were immune to this movement, such as the increase of telemedicine in health.
The digital transformation stopped being an option and we attended the birth of totally digital models which will overlap incumbent models. Result: the companies that will not realise this transformation will lose growing relevance in the market and will end up disappearing, being substituted by new digital players. It is worth remembering, in this respect, data from BCG consultancy, according to which only 30% of the companies that face radical disruption in their industry survive.
Often, this transformation process fails and the problem is not even related to a lack of technology, as this is the best that exists. The main difficulty lies in putting technology at the heart of digital transformation.
Let's be clear: digital transformation is people, from the bottom to the top of organisations, and transformation processes succeed or fail because of people. In 2018, a study by an executive search firm in the UK left an alarming message in this regard: only 5% of boards managers of UK non-tech companies assumed they had digital skills. Unless the trend is reversed, it is a short road to the abyss!
Finally, let's pay attention to Strategy. In addition to aligning People, Technology and Processes, to succeed in this new world, companies will also need to implement a three-factor strategy.
The first is speed, whether in creating product, attracting customers, changing processes or reacting to market changes. Looking at the past can help us better understand the future: it took 68 years for the aviation industry to reach 50 million users; television needed 22 years; Facebook three years; and Pokémon GO just 19 days.
The second is adaptability, which is critical in the current paradigm in which we live. Take the example of the world's largest producer of masks, a Chinese company backed by US investor Warren Buffett that before the pandemic was engaged in the production of electric vehicles. It has retooled and now produces 5 million masks a day.
The third factor is the ability to forge the right alliances, whether with partners, distributors or even competitors. The truth is that the world is too fast and with too many variables to have the ambition to walk alone. It's in also this framework that the added value of belonging to business networks to share knowledge and experiences is placed. Why is all this important? Above all, because technology has lowered the barriers to entry and often competition is no longer only from companies in the sector to which we belong.
At this point, it is easily understood - and accepted - that the formula of the critical success factors of the companies of the past is not so different from the companies of the future. But with some capital nuances that can make the difference between success and failure for an organisation: aligning the right people around processes and technology designed in light of the current context and within a fast and adaptable strategy... always alert to competition that can come from anywhere.