One of the big standouts for me in the recent environment is just how much of a shock COVID-19 has been for organizations. This is because many have become complacent about their data over the past decade and they’re now exposed.
As Warren Buffet said, "Only when the tide goes out do you discover who's been swimming naked."
To deal with the current economic situation everyone now has to lift the lid on their organization.
Historically, when we’ve come into a recessionary environment such as the GFC, we’ve seen a build-up towards it so organizations, at some level, are prepared. But with COVID-19, the externality was so significant and sudden that many were fundamentally unprepared.
It was all too easy
For the last 10 years or so, most industries and organizations haven’t had to do much to grow. Organic year on year growth has been easy for senior management to attain and the organization and boards have been generally happy with the status quo.
These organizations haven’t been data-led because senior management hasn’t had to dig into the detail of their organization to grow, they’ve just been able to manage from a high-level strategic perspective. As a result, they don’t understand their organization in enough detail to be able to move quickly when things change.
Organizations now need to respond faster with data and that’s one of the significant changes that we’re seeing in this environment today.
The difficult work of data
Now, organizations are looking at all elements of risk in their business.
They’re asking questions like:
- Where’s risk in my supply chain?
- What do my suppliers look like?
- Do they have the capacity to continue to supply me?
- Will they go out of business?
- What does my distribution look like?
- Can I still get products to market?
These are questions that senior management or the board probably hasn’t asked for a long time.
To be able to answer these questions and react quickly, senior management has to be able to access granular data.
Being strategic and high level is easy but continually being able to dive down into the detail is difficult work. This is a core competency that senior management should foster so they can make strategic choices and take advantage of the opportunities that exist in this environment.
Some organizations have been agile enough to react to the opportunities that are being created and these are the more interesting ones to watch. They’re saying this has happened, how do I actually grow my business in this environment?
Software organizations are changing the way they take their product to market, particularly in the health and risk areas. A lot of manufacturers have also pivoted to produce ventilators and companies like Bundaberg Rum are now producing hand sanitizers. They had the infrastructure, the people, the supply chains, and the distribution facilities and they’ve been able to pivot and do something that will grow their business in a new direction.
We’ve also had conversations with very large international brands who are now shifting their distribution channels from wholesale to direct to consumers. This is the right environment to do that because everyone is shopping at home. The direct to consumer business can completely change a lot of local brands that historically have relied on bricks and mortar distribution.
How well do you understand your business?
At times like these, the value of data and understanding your business is so important.
It’s great to see more businesses looking at how they access data about their business and then seeing that understanding permeate all the way through to their strategy.
I hope that organizations take this opportunity to embed analytics and change the way they do things so they can react quickly to sudden shocks like COVID-19 in the future.
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