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Survivor SA 2020: Making a plan for lockdown limbo

Posted by Flux on 

12 August 2020

This article was originally published on Retailing Africa’s website. Scroll down to continue reading …

by Louise Burgers

How do we reimagine our businesses and new business models, in the midst of the biggest economic crisis the world has faced since the Second World War? Business trends expert, Dion Chang, has some answers.

After five months of lockdown, many businesses are stuck in lockdown limbo. The realisation that this pandemic will continue disrupting everything in our lives well into 2021, is disheartening for many and an opportunity for others. In a bid to assist companies to break free from the inertia of uncertainty and develop a strategy (or multiple strategies); Flux Trends hosted a unique mini-masterclass with Flux Trends founder, Dion Chang, last week, August 6.

As Flux outlines, the coronavirus has created unprecedented complications and challenges for all companies and dealing with the ‘Great Staggering’ (the period between initial lockdown and full freedom from restrictions) is proving to be more difficult, Chang said; describing the concept of Anticipatory Grief and the open-endedness of a life in limbo, as part of the reason business owners were experiencing high levels of anxiety, whether they were small companies or corporate executives.

Chang also brought in stats from the Global Web Index research report into consumer insights and mindsets; as well as finance expert Lynne Marais of Chelete; and Morne Venter, deputy head at the School of Creative Technologies, Open Window, and a lecturer in interactive design (UX design); to bolster the line-up for the business owners attending the premier online session. The session was facilitated by Flux futurist, Bronwyn Williams.

Five months into lockdown, Chang said we are reaching a second wave of economic impact in South Africa. “What we are starting to see now, is a long haul towards the rest of the year and the realisation that this is not going to change for the foreseeable future – at least the next six to eight months – and that we had better make a plan to just get on with life.”

Context: from VUCA to BANI
Business is also moving from VUCA to BANI, in glib business college speak, said Chang. VUCA stands for volatility, uncertainty, complexity and ambiguity and has always been used in the context of disruption with technology or in the context of the fourth industrial revolution. To aid businesses in reorganising for an unpredictable world, the acronym BANI has been suggested by Wired magazine, and stands for: brittleness, anxiety, nonlinearity and incomprehensibility – which Chang felt was better suited to the current environment we find ourselves in and what business leaders were currently dealing with.

There is no linear model for how the world works now; and that is illustrated significantly in out of home leisure spend, where four in 10 consumers (40%) in 13 out of the 17 markets surveyed, said they would be eating out less frequently in restaurants in the future. The restaurant industry will have problems for the long haul, Chang warned.

Adapt or die

So, how do businesses adapt for a Covid-centric world going forward? Chang quoted six scenarios, including insights from research conducted by Capita Consulting and Wired magazine recently in a broad study which included executives from retail to hospitality, tech, finance and private equity:

  1. Change amplified: This pandemic has been a catalyst for changes that were already there or for those technologies that were already creating disruption; and business needs to match the velocity of that change. This is the new survive or thrive factor: match the speed of the change amplified by the Covid pandemic and lockdown shifts in consumer behaviour across sectors.
  2. Opportunity not a problem: This was a rare opportunity, not a problem, for businesses to zero-base all their forecasts and assumptions about their own business and business models. “All metrics of the past have literally been washed away – the slate is wiped clean,” Chang said.
  3. Adapting to brittleness – and the non-linear way of doing things. Disruption will be here for a while and change will be rapid at times; so this time is about nurturing socialisation and persuading clients, customers, guests and employees, that your services are safe and easy to use. As Chang said: “This is an important one. Are your services safe to use? Are your premises safe to visit?”
  4. Resilience: All fixed costs should now be under review. For the very first time, in more than a decade, resilience now trumps efficiency, said Chang, quoting from the Wired article. “Do whatever you can to survive in the next three months; in the next six months; do whatever you can to keep the ship afloat.”
  5. Humanising your business. Understand anticipatory grief and how your employees and customers and suppliers and people in your networks are experiencing it. Empathy is the new goal – from language, tone, whatever you do to push your brand ahead – empathy is your new currency.
  6. Rethinking business models. Reorganisation is under way – you can’t just open as normal for business, said Chang, and hope it will survive. Consumers may not need what you now have to sell; consumer behaviours and habits have changed under lockdown; and just reopening may not solve all your problems, Chang explained. You have to rethink your business model. One example, was how the Brooklyn Hotel in New York in the US, has turned rooms into pop-up offices to enable people remotely working from home; to get away from home for some time to work in quiet if they need to. In Sweden, another hotel has changed each room into private in-house dining, including overnight stays if required.

Collaboration currency

Collaboration is the new currency, and the Hilton Hotel internationally, has partnered with Lysol disinfectant to provide guidelines on cleaning rooms, even going as far as to provide a seal on the door of a cleaned room. They have removed pens and paper and are making sure that guests understand that there are very high hygiene standards. Global Web Index also reports that vacation plans for the foreseeable future will see over 50% of consumers either staying at home; or taking local vacations in their own countries. This presents a huge opportunity for local tourism to be innovative and attract new consumers from within their own country.

“If you are in hospitality or tourism, gun for your local market as we will not be venturing overseas. If you are a food provider or public service company, safety is paramount – consider making a small video to reassure your customers that your services are safe,” advised Chang. He referenced a safety video made by Burger King in France, which went viral with its humorous – but important message – about its sanitary protocols. Atmospherics in retail is also very important and these subtle hints need to be there for consumers to feel safe during the pandemic.

Impact: Buy South African
In addressing supply chain lockdown challenges, where the reliance on a supply chain that was linked to China was evident the world over when China closed its borders due to COVID-19, disrupting supply chains – including those of South African discount and mainstream retailers – local sourcing is the obvious answer, which will stimulate our own economy recovery too. Supply chain issues surfacing in the local South African market now, included stockouts, orders being cancelled, orders delayed, customers closed down, and so on. What Flux is advising business is to reimagine business models and supply chains.

Chang cited the example of Italian restaurant, Pronto, in Johannesburg, which converted its restaurant business into a retail deli when it couldn’t operate under lockdown; and the switch has given the owner an opportunity to connect with Italian suppliers all over Johannesburg to source the best produce and products and converted her supply chain into a local one. The owner has indicated that they are now committed to supporting local suppliers and small farmers and women-owned businesses.

“With the decimation of many businesses in our industries, it is important to support local industry,” Chang reiterated.

In an interview ahead of the Flux Masterclass, Dion Chang, spoke about how resilience is the most important quality any CEO or business owner can have right now. They need to be able to do anything and everything necessary to save their businesses during pandemic panic; trying out new strategies, testing, collaborating and testing again.

*In Part 2 of this mini-masterclass report back, we will look at financial tips on how to survive the financial chaos and challenges ahead; and how to design the optimum user experience for customers under continued Covid restrictions and safety measures.

 

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