Covid19 has brought the whole world to stand still. World over the economy has come to grinding halt. We do not know when the things will be at normalcy. what has happened is reality, and what is unknown is uncertainty. We can look to Covid19 as threat to our existence or as opportunity. Covid19 has affected large and small , from established businesses to startups. Covid19 has caught the whole world unaware so nothing much can be done now but to wait and play along. The important question being asked as to what next.
How do we maintained continuity of business ?
The larger question is how should we maintained continuity in future. Leadership around the world is grappling with the current crises but there is very little that can be done at this point of time. Management has to think about such future crises and how should they be handled. Universally the answer being put forward is to shift to on line business model. But we can not shift the business model overnight and not every business can shift to on line business model. it would take substantial time to change. The bigger question is for those who are not based on the on line business model say manufacturing sector or service industry. The e commerce model was anyways on the online business model and will continue to do so.
Is digitization the only answer to such type of problem ?
Digitization has been a wave for last 5 to 6 years and it is not new. Unfortunately many companies were not implementing the same for multiple reasons like cost, effort, time, culture etc. Covid19 situation will push these companies to undertake digitization at much faster pace.
Manufacturing and service industry – Apart from actual manufacturing / or last mile delivery many of the processes can be automated. The activities facing the customer acquisitions, retention , lead generations, pre sales activities can easily be digitized. There are certain industries where digitization is way too less and they would certainly suffer the losses. The reason for them is simply complacency.
Agriculture / farming – This segment is worst hit since it is hugely dependent on human capital specially in developing countries. Asian and African countries will certainly suffer since technology advancement and implementation is way too less. Of course the geographical and demo graphical aspects are also responsible for this.
Having said this the above mentioned sectors have to move aggressively for digitization but such implementations are costly and require substantial time. Technologies like Augmented reality, ERP. Artificial intelligence , Robotics, CRM, Drone, etc need huge investment but it would now become necessary .
Investment in technology is not the only challenge.
Digitization through investment in technology alone can not solve the problem and for any management challenge to implement the same is far bigger. For conventional and established industries it is not only the machine but people, culture, process everything will undergo a change. This would require serious strategy and impeccable execution. Nevertheless the process has to start earnestly.
Covid19 and startup world
Covid19 has placed a different kind of challenge in front of startups. However i would classify them in to different categories
- Startups at the idea stage – Startups at the idea stage has an opportunity to retest, verify and introspect about their model. This is the time where they have the opportunity to think if they need to make a pivot in the proposed business model. This kind of situation was not anticipated and many business models will undergo change and it would impact the startup if those companies happen to be their end customers or suppliers.
- Startups at early stage of the life cycle – These startups would be hard hit since they are already operational and have raised initial capital and there has been some revenue traction. Unfortunately they would be under sever cash crunch and this time will push them backwards. But optimistically this is also the time where they can re-access their initial strategies , invest time in to data analysis. This would also open up some thought process for possible collaborations , joining hands or even for opportunity to ride on each others strength.
- Startups at the maturity stage – They are of course well established in business and have already raised multiple rounds of business. Unfortunately for these companies the situation is like stock market where it would be a waiting game.
These are exceptional times but certainly it has taught us a lot on personal and professional level.