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Five keys for a successful business rebound – Integrate a new decision-making framework [Chapter 5]

As a strategy and innovation consulting agency for major corporate decision-makers, we have been exchanging with our clients since the beginning of the economic crisis linked to Covid19 on the roadmaps of their ExCom for restarting.
In a series of 5 successive posts, we would like to share with you here our vision of the keys to a successful recovery resulting from the analysis of these strategic roadmaps.
  1. Knowing where you’re starting from
  2. Thinking recovery beyond the company’s borders
  3. Don’t assume that everything will change or that everything will be as it was before
  4. Take into account the psychological impacts of containment
  5. Integrate a new decision-making framework

We also invite you to share this analysis during a webinar to be held on May 5th from 10 to 11 am.

Chapter 5: Integrate a new decision-making framework

The post-Covid world19 is a world with a new dimension of uncertainty that our companies and economic decision-makers have not had until now in their decision-making frameworks.

The current concerns of our companies are multiple, but they are mainly focused on business activity: capacity to generate turnover, objective of respecting a budget, costs-optimization, competitive pressure, new services and products to imagine… Uncertainty exists, but experience, accounting provisions and the structure of the company are all elements that help our managers to foresee uncertainty, to try to anticipate it and to reassure themselves.

However, we have never had to ask ourselves, as we do today, whether the constraints on individual freedoms allow their employees to come to work and our customers to come and consume.

The management of the crisis reveals a certain acceptance by humanity on the fact that saving a human life deserved to sacrifice “whatever it costs” in the present time our social and economic organizations, despite the future consequences on other human lives (psychological consequences, risks of famine, etc.), some analyses of which seek to make a mathematical assessment. It is no longer the logic of the precautionary principle that is at work, but the belief in a scientific interventionism in which we place all our hopes for immortality. And this paradigm places us in a truly new era. Confinement is not just an isolated episode, but the prelude to future crises that humanity will fight with measures similar to those of today. In the future, other similar local or global health crises will again occur. Massive communication relayed by social networks amplifies these phenomena and puts pressure on political decision-makers, who are forced to take decisions as radical as stopping global economic flows. Finally, population growth and the densification of territories only accentuate the risks.

It is therefore inevitable that new risks will have to be taken into account in a structural way in the face of fears of future health crises. What are these new risks to be taken into account? How to adopt a new decision-making framework? What decisions should be taken at the start of the new phase to ensure that the transformation is a success?

A triptych of risks: economic, individual liberties, health 

In this new context, coupled with the fear of new health crises and the anticipation that these crises will be dealt with by a hyper-escalation of radical measures to deal with them, companies must change their decision-making frame of reference. Today, if their reference system is based solely on a risk-benefit assessment, tomorrow it will have to be based on a new triptych: economic risk analysis, analysis of risks to individual freedoms and analysis of health risks.

This new frame of reference will structure and condition the executability of all our action plans, starting with those of the Covid19 post-crisis economic recovery.

As an example, this triptych of risks is particularly visible in the recovery plans of French companies in May. Deconfinement had been announced for 11 May, but the reality of government decisions invites companies to maintain teleworking and short-time working arrangements until the beginning of June. It is therefore the health risk that must be taken into account first in this case (reorganising access to the workplace, limiting the flow of employees), before the risk to employees’ individual liberties (encouraged to telework and limit their travel), these two risks being imposed on the economic risk for these companies, which are still far from evolving in an environment conducive to a real economic recovery, finally hypothetically relegated in June.

A new standard for work organization and companies demographics

This new triptych of risks has consequences on the organisation of work in companies and their demographics. The current benchmarks in terms of the architecture of premises, geographical locations, and the integration of economic basins into regional urban planning are profoundly affected by the new analytical grid.

The trend in office interiors in recent years has been towards the development of open spaces and even living offices, which reduce the physical distance between workstations and do not assign fixed positions to collaborators. According to our triptych, from the point of view of health risks, these methods of work space organisation are no longer applicable. The distances between workstations must be increased and either fixed workstations must be reassigned or the workstations must be disinfected between use by two different persons. This mechanically increases the economic cost of each workstation, and as office space is not expandable so quickly, teleworking will have to be increased in parallel in an imposed manner, which has an impact on the third part of our triptych concerning the individual freedoms of employees.

In terms of business premises, the trend in recent years has been the construction of large, concentrated business centres, with towers of dozens of floors accessible by batteries of lifts that can sometimes hold up to 25 people. From a health risk point of view, barrier distances limit the number of people with simultaneous access to the elevators. It is impossible to imagine waiting times of several hours for employees to access their workstations. Taking the stairs on a massive scale is hardly conceivable for safety reasons. From an economic point of view, the impact on productivity is too strong to ignore it and prioritize a limitation of employees authorized to go to the office during the same time slot. Here again, the health risk has a direct impact on the economic aspects and individual freedoms to be taken into account in decisions. Beyond the pace of business recovery in these towers, are they viable workspaces in the long term? They are not, at present, adapted and easily adaptable to more frequent health alerts.

What is true on a building scale is also true on a city scale. Limiting access to public transportation poses the same problem as elevators in a tower. The productivity of an employee who would take 2 hours to access his work instead of 45 minutes is strongly impacted. In Ile-de-France, despite maintaining teleworking if possible in May, the rate of congestion and saturation due to access restrictions in transport at the restart will be considerable. While users have become accustomed to being squeezed into metro trains every morning, are they ready to get back into these situations even after the crisis has passed? Models for the distance between home and work, already a major topic of the debate on yellow jackets in 2018 – 2019 in France, will necessarily have to be reviewed in the light of this triptych. In the short term, the price per m² in the suburbs of metropolises will collapse, the price per m² of office space. In the medium and long term, work will be reorganised towards peri-urban centres, going against the latest models of hyper-concentration in urban hypercentres. Indeed, what is the point of working in the centre of Paris in offices where one cannot exploit the entire workspace? The economic cost would be too high for companies, and employees would find it more difficult to get there by public transport. The freedom of individuals to choose where they live and where they work will therefore also be severely curtailed.

Thus, because of the triptych of risks and the fear of future Covid20, 21 and 22 crises, health risk imposes its rhythm on individual liberties and economic interests. This implies completely rethinking the way we work, the organization and interior layout of the physical workplace, the means of access to work, the architecture of buildings, and the models of centralized and decentralized urban planning.

Managerial commitment and capacity of decision-makers to carry out the defined plans

If, as of today, in the planning, budget definition and writing of strategic plans, we must systematically take into account the risk of a similar health crisis arising, this calls into question the value of commitment and individual responsibility. Indeed, in each proposal he makes, the leader, the manager, the political leader can always say “I commit myself to this subject to the condition that this or that health alert does not appear”. This will reduce the individual risk-taking and the personal commitment of the decision-maker without any conditions on the success of a project.

In this context, can we anticipate a potential loss of confidence in the financial markets? If we start to think that managers are committing themselves to “unless” actions, then the markets will review their risk assessment models, banks will increase their prudential obligations once again after Basel III, valuation models will integrate new parameters… The investment and fund-raising capacity of financial markets and institutions is essential to support a recovery that is not confined to cost-cutting programmes but is able to engage in stimulus and innovation programmes. Their responsiveness in adapting in a favourable direction to the global financial system to finance businesses could be the key to escaping a financial crisis that would not be due to a lack of liquidity but to a change of model.

2 reasons to believe in it: the capacity of the human brain to retain the positive and a rebound as a way to break with immobility

The appearance of this new triptych of risks can frighten and disorient us. However, we like to analyze situations with the optimism of an innovator.

There are two major reasons for us to believe in a successful restart in an economic system and a societal framework capable of reinventing itself:

  • From an individual point of view, we believe in the human brain’s ability to retain only the positive if it is communicated to it from the right angle. Individuals express a certain “fed up” with the saturation of anxiety-provoking information, all the more so if they are deprived of the usual entertainment (sports news, cinema outings, events, even societal and political debates…). By turning the discourse towards opportunities to reinvent a better world, we believe that it is possible to overcome post-traumatic stress disorder (cf. article 4) and to retain from this crisis, decades from now, beyond the human dramas, that it has also changed humanity for the better. The personal questioning of individuals as economic agents, in terms of their way of consuming, their way of working, their way of managing, makes it possible to orchestrate these transformations. For example, company managers will have to know how to communicate differently in a context of increasing virtual teams, to give more meaning to their projects, to gain in agility and reactivity to deal with the unexpected.
  • From a collective point of view, the obligation to change the decision-making frame of reference represents an extraordinary opportunity to change the course of economic history. In the short term, rather than the temptation to work only on optimising and reducing costs to reassure shareholders and investors, we are convinced that this is the right time for companies to act counter-cyclically by investing in breakthrough innovation, raising debt, forming partnerships on new models (success fees, equity investments, etc.), and carrying out acquisitions while the money from the economic recovery is still available. It would be a shame if this money were only spent on cost-cutting programmes and the return of an old model whose 125 nanometre diameter virus was enough to cripple the functioning of the entire planet. For a company to simply cut costs and seek to rebuild a past model is to risk dying from something other than the current crisis. Investing in innovative, disruptive models means participating in this new world and learning how to take advantage of it. A crisis always creates opportunities for new innovations, which quickly become indispensable on a daily basis. Just look back at the success of companies created from the ashes of the 2008 financial crisis, such as Airbnb (2008), Groupon (2008), Slack (2009), Uber (2009), Whatsapp (2009), Instagram (2010), Deepmind (2010), Zoom (2011), or innovations like Bitcoin (2009). This crisis is therefore a tremendous opportunity for companies to break with the status quo and embark on the path of disruptive innovation.

Chapter 2 of All Businesses starts today

How can you get started again according to this new standard, giving yourself every chance to succeed in adopting business models that are in disarray and that are likely to put your company back on the road to growth?

To succeed in this shift, writing the first page of chapter 2 of all companies, we defend a 3-step vision:

  • Time 1: Restart. Companies will gradually reopen their premises by adopting the first measures adapting to the new standard and in particular to the health risk (such as the layout of premises, teleworking, etc.), but they will already be building strategic plans for longer-term recovery according to this new standard (how can I imagine my premises of tomorrow? how can I reorganise my managerial lines? what innovations can I launch to meet new needs?) This is a initialisation period with our new reference framework.
  • Time 2 : Back to the equilibrium. Only one watchword: efficiency of execution. Once the restart actions are well defined, this time is a time of operational excellence to implement them. Numerous actions must be undertaken, such as mainly :
    • Simplification of management indicators
    • Efficiency in decision-making and appropriate governance (very high frequency of execution control points: daily, weekly, monthly, quarterly)
    • The individual responsibility of the managerial chain
    • A new and inspiring way to mobilize teams (cf. article 4)
    • Further digitisation of processes to facilitate remote working
    • HR adaptation on team training and employee appraisal processes
  • Time 3: cost reduction or the invention of a new production tool. Depending on the transformation program decided by your company, and its commitment to breakthrough innovations in its production tool as well as in its service or final product launched on the market, this 3rd step corresponds to a stabilization of the new operational model implemented.

To succeed in these three steps towards a successful Chapter 2, this implies great rigour and efficiency in decision making and excellence in execution (no deviation from what is expected). In our uncertain context, being lucid and convinced of what we want to build and sticking to it with great rigour is essential to carry out this transformation.

We are all the actors of these new pages to write. Let us succeed together in this historic turnaround!


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