recover, reposition, and redesign · 2020. 6. 23. · organizations to navigate disruptive change...

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COVID-19 RESPONSE PERSPECTIVE

Recover, Reposition, and Redesign


We empower forward-thinking organizations to navigate

disruptive change andOWN THE FUTURE

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Clay ChristensenINNOSIGHT CO-FOUNDERHarvard Business School Professor

Awarded the Number 1 Management Thinker in the World in 2011 and 2013 (Thinkers50)

STRONG INTELLECTUAL HERITAGE AND LEGACY


Executive Summary

T H E C O M P L I C A T I O N T H E O P P O R T U N I T Y T H E W A Y F O R W A R D

The COVID-19 pandemic has swept the world, interrupting daily life and threatening businesses’ balance sheets

To survive, businesses must take immediate action to deal with crisis management and oversight. However, focusing on the near-term cannot be at the expense of longer-term growth

This pandemic has fundamentally shifted consumer behavior. New patterns and preferences are being established which will guide consumer behavior for many years to come

These behavior shifts create a short window of opportunity for businesses, as consumers are newly receptive to offerings that capitalize on their evolving preferences

Businesses have an opportunity to convert this crisis into new growth. Growth comes from two primary sources:• Repositioned offerings that

capture lost value and gain share

• Redesigned offerings that appeal to new consumer preferences

Seizing this opportunity requires an organization to take four concrete steps1. Evaluate the Disruption:

Consider what this disruption means for your market and your organization

2. Reshape your Strategy: Think critically about how to pivot your strategy

3. Reposition for Resiliency:Refine your core offerings based on evolving consumer behaviors

4. Redesign for Growth:Create a new set of offerings that take advantage of new consumer preferences

© 2020 Huron Consulting Group Inc. and affiliates 3

UNDERSTANDING BIG EVENTS

WHY WE NEED TO THINK AND ACT DIFFERENTLY

3


SUMMARY: Principles that influence how to think about recovering from different crises based on past learnings and historical patterns of Disruption

THERE IS A SILVER LINING:Despite significant challenges, breakthrough innovations often emerge during crises

1

DON’T JUST ‘RECOVER’, REPOSITION & REDESIGN: Crises reshape individual behavior, altering demand and how companies compete

2

NOT ALL BEHAVIORS ARE EQUAL:Certain new behaviors become habitual, while legacy habits can reemerge post crisis 3

BE CAREFUL, THIS TOO WILL PASS:Experimentation and openness to learning subsides as individuals define a new normal4

P R I N C I P L E S

Adopt a growth mindset; focus on capturing share and repositioning for long-term growth

Observe behaviors to understand how priorities and the basis of competition are shifting

Innovate in ways that reinforce key behaviors that are favorable to your sustained success

Pursue Bold Moves to accelerate redesign and enhance long-term sustainability

I M P L I C A T I O N S


THERE IS A SILVER L INING: Past disruptions indicate signs of hope

T H E S I L V E R L I N I N G C O M P A N I E S F O R M E D I N R E C E S S I O N Y E A R S

P R O D U C T S F O R M E D I N C R I S I S Y E A R S

1 9 5 7 T r a n s i s t o r R a d i o

2 0 0 1 i P o d M P 3 P l a y e r

1 9 8 1 P e r s o n a l C o m p u t e r s

1 9 6 1 D i s p o s a b l e D i a p e r s“There is no better time to start a new company or a new idea than a depression or recession… There [are] a lot of people who need to get really creative to create something new”-- Jack Dorsey, CEO & Founder, Twitter

Valuation of the 15 unicorn companies founded in 2007-2009

~ $ 2 4 0 B

Source: “The Silver Lining”, 2009, authored by Innosight Senior Partner Scott Anthony, #9 on Thinkers-50, 2019

Airbnb

DropboxSquare

SONYP&G

Apple

Ann Taylor Bain & Company Colgate-Palmolive

Church & Dwight Co., Inc.

Black & Decker Starwood Hotels & Resorts Cummins ConAgra Foods

Bridgestone Compaq Digital Mattel

Marvel Dow Harley-Davidson Motor Company Whole Foods

Lilly Dow Jones Enterprise Hershey

Merrill Lynch Toys R Us


DON’T JUST RECOVER, REPOSIT ION & REDESIGN : Crises can shape new patterns of consumption behavior and drive moderate-to-significant changes in an industry

SignificantModerate

U n d e r g r o u n d S t r i k e o f 2 0 1 4

F i n a n c i a l C r i s i s o f 2 0 0 8

T e r r o r i s t a t t a c k o f 2 0 0 1

Airport security and biases changed forever after the September 2001 terrorist attack

How will attitudes around data sharing and monitoring change post crisis?

How will preferences change across different consumer segments?

What new “routes” in and out of the system will consumers create?

Foreclosures stuck with millennials, who at the same age own ~30% less property than the previous generation

The London Underground strike lasted 2 weeks causing consumers to try new routes, which persisted after reopening

Meal Kits Thrive During Coronavirus Lockdown

Coronavirus Should Finally Smash the Barriers to Telemedicine

Coronavirus Puts the Sharing Economy on Life Support

E M E R G I N G B E H A V I O R S H I F T S

Source: Innosight Secondary Research; The Wall Street Journal; Axios; Bloomberg; Brookings Institute

Telecommuting will likely continue long after the pandemic

IMPACT

Bloomberg

WALL STREET JOURNAL

AXIOS

BROOKINGS


NOT ALL BEHAVIORS ARE EQUAL: Organizations need to observe, understand, and learn quickly to influence favorable behaviors that stick

D I S R U P T I O N D R I V E S N E W B E H A V I O R S I M P L I C A T I O N S

What new behaviors are we seeing across both internal and external stakeholders?

What do these new behaviors tell us about changing consumer needs and will these changes “stick”?

Which behaviors do we want to ”stick” long-term and how can we innovate to reinforce them?

O B S E R V E

U N D E R S T A N D

I N F L U E N C E

Rearrange priorities and goals→ Concerns for personal and

family safety increase

Shifts the circumstances surrounding an individual → Social distancing governs

personal interactions

Encourages higher levels of experimentation → Learning how to be productive

on video

Crises like COVID-19 ... … can substantially shake up needs(and what people do to address them)

Changes which needs are most important → Prioritize family time over work

Triggers an individual to seek out a new solution to an important need → At home fitness routine

Shifts the “definition of good” consumers use to evaluate different solutions to the need → Home delivery becomes important

Imposes or removes system-level barriers that shape how someone can address the need → Shelter in place mandates

Image for ChangeImage for COVID


BE CAREFUL, TH IS TOO WILL PASS : Move swiftly to utilize window of high receptivity to make bold internal changes and big strategic moves that leapfrog progress

FITBITExperimenting with new partnerships

In April 2020, Fitbit announced a partnership with a telemedicine startup. Through the Fitbit app, users can schedule virtual doctor’s appointments, be screened for COVID-19, and refill prescriptions2. This partnership expands Fitbit’s presence from fitness into the broader health and wellness market

O B S E R V E C O N S U M E R B E H A V I O R C H A N G E S …

Source: Kurt Lewin's Change Model 1) Axios; 2) PRNewswire

Changing external and internal influences create conditions thatloosen up entrenched behaviors …

... followed by a short period of high receptivity and rapid experimentation to transition to a new set of of behaviors ...

... that quickly lead to newhabits formed, and loyalties established which will largely persist until a new discontinuity emerges

U N F R E E Z I N G

E X P E R I M E N T A T I ON

R E F R E E Z I N G

T I M E

T I M E

… A N D U T I L I Z E W I N D O W F O R B O L D M O V E S

Take advantage of this narrow EXPERIMENTATION window to simultaneously Reposition and Redesign operations

CLEARExperimenting with a new business model

With air travel decimated by COVID-19, Clear has pivoted its biometric ID tech from an airport security screening application to an employee health screening application.1 This move opens up both new customers and new value propositions for Clear to exploit once the COVID-19 crisis has passed

https://www.axios.com/coronavirus-health-screening-digital-id-48f5ee5b-05c4-4b5e-8fda-4d2f59b946b0.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top

https://www.prnewswire.com/news-releases/virtual-health-platform-plushcare-offers-telemedicine-services-to-fitbit-users-amid-covid-19-pandemic-301041010.html

© 2020 Huron Consulting Group Inc. and affiliates 9

MOVING FORWARD

HOW TO CAPTURE LOST VALUE AND COMPETE D IFFERENTLY

9


L O N G T E R M V I E W: Once the immediate crisis is under control, reposition to capture lost value and gain share, while redesigning your offerings to win in a new environment

C O M M O N F A I L U R E M O D E S

You must take immediate action to deal with the management and oversight of the crisis

Focusing exclusively on the near term misses the opportunity for new growth

Reposition your offerings to recapture lost value and capture new demand

Redesign your offerings to compete in a new environment

RAPID RESPONSE ACTIONS ARE NECESSARY BUT NOT SUFFICIENT

A COMPREHENSIVE STRATEGY HARNESSES NEW OPPORTUNITY

moving too slowly or waiting to act in hopes of more certainty in the future

not dedicating sufficient resources to new opportunities due to an over-emphasis on the near term1. 2.


TAKING ACT ION: To successfully reposition and redesign, organizations must ask themselves a set of critical questions

EVALUATE THE DISRUPTION

REDESIGN FOR GROWTH

RESHAPE YOURSTRATEGY

REPOSITION FOR RESILIENCE

Before taking any action, first consider what this disruption

means for your market and your organization

Once you understand how the world has changed, reshape your strategy to strike a balance between resilience and growth

21

With your reshaped strategy, you can reposition your core to maximize your resiliency through the crisis

3With your reshaped strategy, you

can redesign your offerings to best position you for growth through and after the crisis

4


RECOVERY TACTICS: How we help firms navigate disruption

2. RESHAPE YOUR STRATEGYUndoubtedly, the plan and metrics you used to govern your strategy in the past have changed; your new priorities must be clear and communicable in order to guide your organization through disruption with conviction in the choices you have made Key Activities:• Assess the need for strategic pivots and create an action plan

complete with “no-regret” and “scenario-based” activities• Adjust the portfolio to balance repositioned vs redesigned

offerings• Organize governance to enhance accountability and monitor

progress against critical metrics

1. EVALUATE THE DISRUPTIONDuring times of uncertainty, it is critical to understand the unique macro and micro changes that are taking place within your market or industry; evaluating the sustainability of your business will ensure the appropriate actions are taken in response to a crisisKey Activities:• Identify emerging expectations and needs of customers &

consumers• Stress test the business to assess position and determine

strategic implications• Challenge assumptions related to key trends and scenario

planning

3. REPOSITION FOR RESILIENCYRegardless of strategy, the priority must be the survival of the core businesses and assets including your people; focusing on the financial and cultural resilience of the organization will help ensure that you come out of this disruptive period stronger than before Key Activities:• Transform cost structures to drive improved performance &

growth• Identify levers to preserve both cash and optionality• Systematically identify and tackle blockers that would inhibit the

ability to make progress

4. REDESIGN FOR GROWTHAny disruption provides your organization with an occasion for learning and growth; you must identify “silver linings” in any crisis and rapidly shape, launch, and scale your response to opportunities that present themselves during the tumultKey Activities: • Build innovation culture and infrastructure to enable rapid

experimentation• Reshape the value proposition for consumers and employees• Drive new growth opportunities from concept to scale


DEEPER V IEW: Key considerations to take action and drive both near-term resiliency and long-term sustainability

R E P O S I T I O NDrive near-term Resiliency

R E D E S I G NCreate long-term Sustainability

P e o p l e , O p e r a t i n g M o d e l , a n d C h a n g e M a n a g e m e n tHow can we ensure our response becomes an enduring source of inspiration, hard-wire the agility learned during the crisis and ensure we don’t revert to legacy behaviors?

Support Services (e.g., Talent, HR, IT)

Consumer & Customer Experience

Sales & Marketing

Manufacturing & Supply Chain

Products & Services

Leadership & Governance

• How have our external and internal assumptions changed?• How has demand for our products & services changed, and how

does this impact our portfolio of services and assets?• Are our processes optimized to preserve cash?• How do we stabilize our supply chain?• Is digital access to our products and services optimized? Does our

access strategy support the shift to virtual interactions, purchasing, and delivery?

• How do we address emerging capability gaps and ensure sufficient capacity to support virtual internal and external interactions?

• How do we deliver a safe environment that meets the heightened demands of our workforce and consumers?

• What is the new workforce model that drives needed productivity while also mitigating burnout and turnover risk?

• How are customer and consumer needs changing?

• What role do we want to play in the evolving market landscape? How does that change the nature of our relationship with customers, consumers, suppliers, and other key stakeholders?

• Who are the partners we need to engage with in order to meet the evolved needs of customers and consumers?

• Given our role and the changing basis of competition, what are new sources of differentiation? How does this impact our scope of products & services?

• How do our processes and capabilities need to change to deliver value?

• In what ways should our business model evolve?

• How can we transform our cost structure?

First, outline how you will succeed in the new normal by E V A L U A T I N G the D I S R U P T I O N and R E S H A P I N G your S T R A T E G Y


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recover, reposition, and redesign · 2020. 6. 23. · organizations to navigate disruptive change...

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