Rethinking business strategy between the pandemic and the recession

15 February 2023 Consultancy.uk 5 min. read
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Between the massive disruption of the pandemic’s lockdown phase, and a steadily approaching global recession, businesses have a critical window of opportunity to plan for the future. Cassie-lee Osborne, a Senior Management Consultant at Enfuse Group, has detailed how firms can best revisit their strategies at this crucial time, without compromising on their fundamentals.

The last three years have been extremely difficult for businesses around the world. The unprecedented global pandemic of 2020 brought with it a moderate recession, and lockdowns to prevent the virus’ spread meant that the recovery was modest in 2021. Then, in 2022, massive inflation and supply chain disruption meant that most companies struggled with absorbing rising costs, and maintaining consumer engagement – as many customers reigned in their spending.

To combat those headwinds, many firms have already adopted traditional strategies such as spending cuts and recruitment freezes. But with these trends seeming likely to result in a deep recession for 2023, Cassie-lee Osborne believes that firms may need to think about more than just reflexive manoeuvres, if they are to survive and thrive in a future economic recovery.

Cassie-lee Osborne, Senior Management Consultant, Enfuse Group.

The Enfuse Group Senior Management Consultant explained on the firm’s website, “Rather than continuing to operate in ‘survival mode’ to wait out the recession or continue business as ‘normal’ without a clear path forward, today presents the perfect opportunity for business leaders to revisit their business strategy. This will allow your organisation to plan how the company will get back to growth (or accelerate growth), proactively identify threats or seize new opportunities, reassess company targets and to give their employees much needed optimism as we stare down another year of turbulence (especially as success during the pandemic does not equate to success during a recession).”

According to Osborne, first and foremost, business leaders need to ask themselves a series of important questions, to determine if a business strategy needs revisiting. Companies should decide if their mission and vision can still inspire workers and customers; if the company has a clear goal or aspiration to achieve; if its offer is still relevant to the needs of clients; and if existing strategic goals are still relevant amid present market conditions. Leaders also need to be clear if they are still progressing on their business goals; and if their strategic intent is properly communicated to filter through the whole organisation.

Risks for revisiting strategy

Osborne warns that if the answer to any of those matters is a ‘no’, leaders should consider exploring what opportunities might exist for their organisation to become stronger and more successful in 2023. That may be easier said than done, though, and they should also be mindful of a number of pitfalls when developing a new strategy.

Firstly, she noted, firms should beware of “taking on too much too quickly.” Staff must have a sustainable path forward that gives them “optimism about the future – not an unmanageable workload.” Some firms have learned to be ‘lean’ through the pandemic, and are already operating on reduced headcounts. Adding additional workload onto employees in such a situation can risk a worsening skills shortage – via burnout, or workers simply moving on – and “a silent ‘resistance’ to adopt and drive the strategy.”

Continuing, Osborne cautioned, “[Be careful about] not prioritising the basics. It’s very easy to be drawn to new innovative trends that could potentially leapfrog your company ahead of your competitors. However, if your processes are inefficient and your technology is outdated, then perhaps it might be a better option to initially focus on getting the foundations right before pursuing new ventures. This will ultimately drive down your costs giving you more flexibility with projects later.”

At the same time, when revisiting strategy, it can be difficult to bring together senior leaders within an organisation, especially when “day-to-day demands for their time are greater than ever”. But the organisation must move forward as a single entity – and firms cannot afford to have multiple departmental strategies, with no consolidated view of how each strategy contributes to the overall business outcomes.

“It is crucial for business leaders to carve out time together to connect and discuss how the organisation should move forward as a single entity,” Osborne went on, “to ensure alignment and drive support for the overall strategic direction of the company. Having This will also prove beneficial when communicating the business strategy to the broader organisation, as employees will be able to see the broader picture and how their contributions will drive success within the company.  Our recommendation to bring together senior leaders is to schedule a multi-day off-site workshop, away from distractions where the focus can be on creating the path forward for the organisation.”

Finally, firms must be aware that while their instincts at the moment may be to scale back costs, failing to invest properly in change can lead to “uninspiring strategies and unsuccessful delivery.” Osborne suggested that whether a company decides to significantly pivot the direction of their strategy or only make small changes, it is crucial that enough money, time, and effort is invested into the transformation, alongside “an acceptance of a certain level of risk.” This can actually help address funding shortages too – if money is short in the organisation, then strategy “should articulate how additional funds will be acquired and when other value adding activities can begin.”

Osborne concluded, “By revisiting business strategy to ensure it is fit-for-purpose as we enter another year of ambiguity, organisations can paint a positive future for their organisation that articulates how their company will recover and grow in the years to come, while also setting realistic targets that is responsive to the current environment at hand. For those who remain unconvinced that the time is now to revisit your business strategy, be wary of the opportunity costs of continuing the status quo - especially if your competitors seize the opportunity of recession.”