A Framework For Response to Economic Shock and Uncertainty
On March 11, 2020, the World Health Organization declared the novel coronavirus (COVID-19) a pandemic. In response, governments restricted large social gatherings, closed non-essential business locations, and advised individuals to stay home. This sudden change in business operations and human behavior jolted the economy to a bleak reversal of its steady, bullish market. Though intuitive that a pandemic would slow the global economy, its manifestation was not as predictable. Since March, certain industries have regressed more than others—think airlines, lodging, restaurants, and entertainment—while other industries have grown—like grocery stores, online shopping, and digital entertainment. Yet, not all companies within their respective industries have been impacted equally. Some companies have utilized digital capabilities to adapt service offerings; some companies have implemented thought-out, business continuity plans; some companies have done both. Regardless, organizations hoping to survive and grow beyond the current pandemic will require an organized framework for addressing the long-term economic implications of COVID-19. For this, we propose the following framework: Now/Next/Future.
We developed the Now/Next/Future framework in response to the impact of COVID-19 to help companies react, respond, and plan strategically during times of economic shock and uncertainty. This framework emphasizes three specific, interconnected workstreams:
- Now | How will you react to meet critical needs?
- Next | How will you respond to changing inputs?
- Future | How will you plan to compete in the new normal?
Within the framework, each of the workstreams focuses on a key timeframe during a crisis.
- Now aims to stabilize the business—reacting to rapid external change, assessing the internal impact, and executing business continuity plans.
- Next leads a response to optimize resources during the crisis—using strategic innovation to address the temporary changes in supply, demand, and behavior.
- Future crafts a plan to navigate the new definition of normal following the crisis—forecasting fundamental shifts in consumer behavior and the macro-environment.
While each targets a separate time horizon, they are designed to run concurrently. This encourages companies to remain forward-looking while still tackling immediate challenges.
Though companies may use their own approaches to organize their response within the framework, we identified five key dimensions to help guide organizations as they assess, plan, and act across the Now, Next, and Future workstreams. These five dimensions include:
- Customers | How will you continue to engage, drive loyalty, and deliver value to customers?
- Employees | How will you balance cash flow, human welfare, and long-term perception?
- Operations | How will you optimize operations and organizational capabilities?
- Finance | How will you model and achieve financial viability?
- Data & Tech | How will you adapt data & tech to support quick changes & long-term strategy?
These five dimensions are designed to help companies assess impacts and identify key considerations as they explore relevant responses to the crisis. The following table provides an example of how they fit into the Now/Next/Future model with some questions to help guide planning and execution:
Inevitably, companies responding to the crisis will pursue separate initiatives and develop their own strategies to tailor-fit gaps and pain points. However, emerging insights will drive common initiatives across organizations’ Next and Future workstreams. Envision essential digital transformation, accelerated direct-to-consumer channels, and data-driven customer relationships. While not an exhaustive list, these themes surfaced and are currently enabling companies to meet both essential and non-essential customer needs. Looking ahead, new consumer habits and growing digital-first behavior will elevate companies who have evolved to fit the mold of the new post-pandemic normal. Whether an organization leads or lags in digital maturity, they must be prepared to address customers now asking, “Why should I do this in person?”
Though not a panacea for protecting company health during crises, the Now/Next/Future framework, along with its five dimensions, is designed to help companies develop optimal, strategic responses by encouraging companies to:
- Assess internal assets & capabilities
- Forecast changing behaviors & macro-conditions
- Explore the impacts of the crisis across the five dimensions of each workstream
- Identify critical action items to address impacts
- Prioritize overall initiatives by workstream categorization—Now, Next, then Future, respectively
- Assemble a roadmap to accomplish critical actions items
For individuals, the action is clear—stay home, social distance, wash your hands, and exercise vigilance. For companies—stabilize your organization, innovate to meet changing supply, demand, and behavior, and plan to compete in the new normal following the crisis. Visit our insights page to download the framework for free.
About our Subject Matter Experts / Authors
Kevin is a Managing Partner for Credera’s Denver office and Operations at Credera. Kevin has over 20 years of management consulting, strategy, and operations experience. At Credera, Kevin is responsible for the Denver go-to-market strategy and leading both corporate and delivery operations. His experience includes strategic growth initiatives, financial and operational process design, mergers and acquisitions due diligence, and post-merger integration. Prior to joining Credera, Kevin worked in venture capital and was a management consultant at Accenture. He earned his MBA from The University of Chicago and his B.A. from Taylor University. Kevin has a passion for charter school education, is an avid reader, and the proud father of three girls.
Gail is a Vice President and Partner at Credera with over 25 years of strategic planning and performance management experience. Prior to joining Credera, Gail worked in management consulting at Andersen Consulting (now Accenture), the Balanced Scorecard Institute and other firms, and she served as Chief Strategy Officer at a global software company. She has worked with clients across multiple industries including organizations such as Fluor Corporation, ADP, Lockheed-Martin, Greyhound Lines, BrightPoint, Tolko, SmithGroupJJR, TATA Chemicals, and Mary Kay Inc. as well as mission-driven organizations such as NASA, U.S. Air Force, Federal Government of Botswana, Susan G. Komen for the Cure, University of Texas Medical Branch, and U.S. Office of Secretary of Defense. She is a co-author of a textbook, The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard and Gail has trained and certified several hundred industry professionals in the balanced scorecard methodology. Gail earned her B.S. in Industrial Engineering (with a focus on Automation & Robotics) from The University of Texas at Arlington and her MBA from Abilene Christian University.