Next New Normal: Increase Metabolism To Digest Change

We had gotten habituated to the new normal by 2020. After coming out of the lockdown and with the inoculation drives going on, we thought that the worst was behind us. The second wave that hit us in 2021 caught us off-guard, and it is teaching us to fit in with the next new normal.

It is testing our business adaptability and agility, which we presumed we had achieved while encountering the first wave. In the second wave too, COVID-19 has impacted businesses, disrupted the supply chain, and affected consumer behaviour.

The Global Economic Prospects have anticipated the pandemic’s impact on the world economy. The baseline forecasted impact is a 5.2 percent contraction in Global GDP in 2020. We are not sure if we have hit the bottom of the cycle as yet with this wave, so it is hard to put a finger on what the impact could be. This also means that we are not certain how to be prepared for the hard times that may follow.

The global market is going through a severe contraction in growth and a crunch in liquidity. In the coming years, businesses will need to demonstrate stability or survival, at least as predictable growth may no longer be valid. Optimisation of resources and an increase in efficiency are the essential needs of the hour to survive in these tough times, as we cannot rely on growth. The economic statistics indicate that it is a hard time for companies that are focusing on growth alone for survival. Businesses will need to increase their metabolism to digest this change in the environment. This impact might force businesses to change their fundamentals and the basic premise of doing business, and they may need to adapt to a rapid change in market realities in the years to come.

Optimisation Is The Key
To navigate through these tough times, businesses need to optimise. In the years to come, businesses are likely to experience limited growth, drastic changes in consumer behaviour, disrupted supply chains, and a scarcity of resources.

It is time for small businesses and big corporations to think about striking a balance between Innovation, Improvement, and Jugaad to be in business. Striking the balance is very critical in the current scenario, as it is difficult to predict the impact of the rapid changes in global economic parameters on the various sectors. Businesses are largely focusing on maintaining continuity, especially in their core areas. It is time to weigh the pros and cons of cutting costs, driving productivity, and implementing the safety required for the Next New Normal. Keeping this in mind, businesses will have to be selective while exploring innovation or committing to investment in innovation.

Innovation is getting initiated in an organised manner with clear goals to do something that has not been done before. Jugaad, which is the other side of the coin, is the way of doing something that has already been done before but getting it executed cost-effectively.

Improvement focuses on the optimisation of resources and the efficient utilisation of the existing supply chain. There is a sense of urgency to harness process excellence.

In this new normal, the focus areas for improvement are supply chain optimisation, improving cash flow, working capital efficiency, customer self-service, smart sourcing; process automation, the implementation of shared services, improving inventory management, and many more. When the economy is in a phase of contraction, it is imperative to increase market share by increasing competitiveness. It is only possible by delivering value beyond the commitment, and businesses will have to use a mix of innovation, optimisation, and Jugaad to tide over this time and survive in this new normal.