Strategic Planning post Covid-19
The ongoing covid-19 pandemic is showing signs of ebbing and economies opening up, and vaccination is ramped up to facilitate the speedy return to normality. Businesses are now grappling with how to approach a post-Covid era and remain in business when such a calamity occurs again in the future. For these reasons, strategic planning is a business priority that should not be overlooked as businesses struggle to rebuild and survive sustainably and profitably after the covid-19 pandemic. Although the importance and principles of strategic planning will not change after the pandemic, the approaches employed will change irreversibly as firms prepare for an increasingly uncertain, ambiguous, volatile, and complex business environment post-covid-19. Firms will have to be more creative, innovative, and deliberate with their strategic planning to avoid being threatened with decimation when similar crises emerge in the future. McAlister (para 5) observes that companies are embarking on planning for the future and reviewing their strategic plan to determine whether they are robust enough to propel the firms firmly into the post-covid-19 era. This discussion delves into how businesses can apply strategic planning to survive after the covid-19 pandemic, and keep their businesses running profitably, sustainably, and resiliently enough to withstand similar or worse headwinds in the future.
Importance of Revamped Strategic Planning
Businesses have continuously developed strategic plans to help them achieve their business goals and define their growth and profitability pathways. One traditional approach to strategic planning that has been used by business executives is conducting an environmental survey to determine the opportunities, threats, and risks facing a business entity before charting a strategy for leveraging the opportunities and minimizing the threats and risks, while sustaining an enduring competitive advantage in a complex business environment. Tools such as the SWOT analysis, PESLTE analysis, and Porter’s five forces analysis that been traditionally used by businesses to assess their internal and external environment before strategizing how the firms can approach the marketplace strategically.
However, one area of strategy formulation expected to undergo radical changes in risk assessment. In the pre-pandemic era, business analyzed their risks and ended up with a list of the most likely ones to occur and most impactful on the business. Consequently, risks with a low probability of occurring and least impactful were often ignored as firms sought to deploy their scarce recourse without compromising their bottom-line. But, the covid-19 pandemic was an unforeseen risk that has devastated many business enterprises because the firms did not have plans in place to address such as widespread, sudden, and devastating crisis resented by the pandemic. Consequently, many of the strategic plans that had been developed by businesses proved ineffective in protecting business firms from the vagaries of the pandemic. Business ground to a halt while some business models were obliterated, as supply chains were irreversibly disrupted and customer behavior changed (Huy 14). These eventualities have been unforgettable lessons to firms.
Similarly, the focus of strategic plans is likely to change radically. In the pre-Covid-era, businesses set strategic plans that focused on profitability and outcompeting rivals. The scope of such plans was narrow because it was premised on a relatively stable and predictable business environment. However, the same approach cannot be used in the post-Covid era because businesses have learned fast that such crises can recur, and do so with increased frequency and severity. For instance, firms realized the vulnerability of relying on China as the world’s factory, when the country could no longer fulfill orders of parts and finished products, because of the countrywide lockdown. Therefore, strategic planning is likely to take a long-term view away from short-term gains. In addition, it is expected to become an ongoing process rather than a yearly event, to guard against unforeseen changes in the business environment.
Focus of the Strategic Plans
The covid-19 pandemic has revealed what businesses should focus on when making their strategic plans. The business environment has changed dramatically and although some aspects of it might return to the normal pre-Covid status, many others will change permanently or disappear altogether. For instance, the fear of traveling may prevail for an extended period, thus affecting the hospitality industry irreparably (Patnail, de Mola, and Bates para 1). Yet, the lockdowns have made people miss the outdoors and social interaction, which might help rebuild the hospitality industry also. In the same vein, some work could be performed permanently from home as some employees have already embraced this during the pandemic and appear to like it. In turn, the workplace may need to be reconfigured to accommodate working both physically and virtually, which is likely to present challenges to the human resources managers. This calls for a more extensive, creative, and flexible strategic planning effort by firms.
The covid-19 pandemic presented business scenarios that have not been considered before in strategic planning by firms. Therefore, scenario planning is likely to take a more central role in strategic planning in the post-Covid era. Scenario building is a traditional tool of strategic planning that has been used to hypothesis the likely eventualities in firms that would emanate from different business environments. Scenario planning is predictive and helps firms visualize their businesses in the future by examining other possible realities. Scenario analysis can help business executives identify and explore the effects of different uncertainties. It involves considering various assumptions that would control a business and determining how an organization would respond to the different hypothetical business environments.
To facilitate the new strategic planning approaches, firms are likely to resort to more use of advanced digital technologies to formulate their strategic plans. Artificial intelligence and machine learning tools are already being deployed to understand the changes in consumer behavior currently (Huy para 10; Patnail, de Mola, and Bates para 6). Such tools would become critical in deciphering how consumer behavior has shifted following the covid-19 pandemic and how long these changes are likely to last. These tools can be used to make predictive models that can support the post-Covid strategic plans created by firms. In this regard, the goal of strategic planning is likely to change from accuracy as its main goal, towards planning for a myriad of possible and unimaginable occurrences in the post-Covid era.
Recommendations to Business Firms
After considering the likely situation that firms would encounter in the post-Covid 19 era, the following recommendations are presented to facilitate corporate survival. Firstly, business executives should reexamine their business models and strategies to identify whether their firms are ready for the post-Covid era. It is likely that the pandemic has shifted the business environment so dramatically that a new business model would be necessary for survival in the new environment and conditions. Similarly, the strategic plans should identify any new opportunities that emerged during the pandemic and leverage them in the business model (McAlister para 8). In this regard, strategic planning should aim at increasing market responsiveness and building resilience (Huy para 5).
Secondly, firms should reevaluate their workforce in light of the emerging working conditions after the pandemic. Business executives should remodel their workplaces to accommodate both working styles; in-office and working-from-home. This might also mean rationalizing the workforce to make them fit the emerging working structure at the workplace. Recruitment and training might be necessary to ensure that the workers are conversant with virtual technologies like videoconferencing for meetings, virtual private networks for accessing the corporate network (McAlister para 12). In turn, the strategic plans should include revamps ways of appraising and motivating employees, especially those working remotely. This plan would involve the human resource management, which should be dynamic and creative enough to devise ways of attracting and retaining talent, amid increased Covid-related unemployment and transformed workplace.
Thirdly, business executive should consider outsourcing some aspects of strategic planning, such as risk analysis, if they do not have sufficient expertise in-house. External consultants can inject an inward-looking perspective that may lack in the organization, and thus improve the quality of the decisions make and plans formulated. They may also bring in critical knowledge and perspectives lacking within a firm. Harnessing external human resources can support a firm’s transition during the critical time of revival threats.
Covid-19 pandemic is likely to change the business environment dramatically and irreversibly, as its effects are still unfolding. Organizations are likely to face unfathomable changes to their business models and working environment, thus calling for radical changes. Therefore, strategic planning is critical for addressing the issues being faced and are likely to be faced by firms in the post-Covid era. Strategic planning should focus on building long-term resilience, flexibility, and adaptability to ensure that firm can weather similar occurrences in the future.
Patnail, Dev, Michelle Loret de Mola, and Brady Bates. “Creating a post-Covid business plan.” Harvard Business Review. 2021. https://hbr.org/2021/01/creating-a-post-covid-business-plan. Accessed 06 December 2021.