These three "accelerated transformations" will be the hallmark of companies that become growth leaders in 2021.
State of the industry
In a September 2020 survey, 36 percent of CEOs at the helm of 149 of the U.S.’s largest companies said they expect business conditions to recover in 2022 or later. And a recent 2020 Small and Medium Business (SMB) Trends report by Salesforce Research stated the overwhelming majority of consumers (88%) expect companies to accelerate digital initiatives due to COVID-19, while only one in three SMB leaders said the pandemic has caused them to move forward any digital initiatives. In both cases, there is opportunity. As companies forge ahead this year, despite ongoing economic cloudiness, those that choose to accelerate their corporate and technology transformations are a step ahead of the competition.
The way forward
Over the course of 2020, Propeller business consultants had a virtual front row seat into the transformative responses of industry leaders across energy, consumer products, healthcare, financial services, and information technology. As a result, Propeller identified three prevailing business trends for 2021, each capable of helping companies move out from under the economic impact of COVID-19 to become nimbler, more customer-attuned and leader-inspired organizations.
1. Rapid organizational alignment around key strategy shifts
Large organizations often aspire to be agile but historically get bogged down by their structure and competing priorities. The COVID-19 pandemic forced accelerated agile change never seen before in companies across the U.S.—and organizations now have evidence of how quickly they can pivot.
Propeller identified five common characteristics of companies capable of creating rapid organizational alignment around strategy shifts—despite ongoing economic challenges. To their credit, these approaches are more reflective of the operational mindset typically found in emerging startups. Conversely, companies unable to realize rapid transformations are often hindered by barriers that can make change slow or impossible.
5 characteristics for creating rapid organizational alignment:
|Willing to pivot on corporate strategies to meet changing market dynamics and demands||Stake in the ground mentality focused on previously established one, three, and five-year initiatives|
|Flexible leaders capable of adapting to and leading new corporate strategies||Change-averse leadership mindset|
|Flatter, more adaptive organizational structure that allows new strategies to move quickly||Multiple hierarchical layers capable of stalling critical change initiatives|
|A premium is placed on employee enablement by adopting emerging collaboration and productivity technology||Risk-averse and won’t be first movers on the adoption of new technologies to benefit employees|
|Employee encouragement in solution ownership is promoted and supported||Employee ownership of solutions is discouraged because it’s an expensive risk|
Organizations that began large-scale strategy deployments in 2020, or those planning corporate strategy shifts in 2021, have realized their limitations at this critical juncture. Many have on-boarded consultancy and specialty partners to bring a caliber of focus to help them act small and adjust at a faster pace. By virtue of being outside experts, consulting partners can inject a necessary speed and agility around internal efficiencies needed for both short and long-term growth.
Companies across every industry are especially looking for expert help in change management as they reimagine systems to deliver their brand directly to consumers.
— David Woltze, Managing Director, Silicon Valley
2. Brand-direct selling, audience segmentation, and customer experience
The recent disappearance of intermediary product distributors like JC Penney, Foot Locker, and Neiman Marcus is a shift that was already underway, largely driven by consumer preference for brand-direct and online shopping experiences. COVID-19’s arrival and market disruption served to accelerate the inevitable. Brick and mortar businesses without a vibrant online channel, or those that waded into 2020 cash-poor, were especially vulnerable. In 2021, consumers will reward companies that authentically— and holistically—meet their needs.
Consumers are seeking brand-direct experiences. For business decision makers, it means their companies won’t be going back to the way things were pre-COVID. Their future growth and sustainability now requires a complete shift in strategy.
— Evan Downey, Senior Director of Finance
Companies investing in a wholesale reset of their end-to-end technologies to capture the hearts and minds of consumers are initiating strategies with three key aims: investments that offer new and meaningful ways for customers to engage with a company’s products and experience their brand; internal-facing technologies that maximize operational efficiency with a largely remote workforce; and data and analytics solutions that help them make better decisions and forecasts.
Evidence of this are companies like Nike, already a leader in direct-to-consumer selling strategies and who saw record digital sales starting April 2020. In October last year, they announced global senior leadership changes designed to speed their Consumer Direct Acceleration program. These leadership changes, in combination with a strategic alignment of their operating model around their consumer-direct focus, give Nike greater focus and agility to serve their consumers—and a nimbler, flatter organization with which to do it.
Before 2020, companies could typically move at a steady but not rushed pace in their digital evolutions with only a moderate disruption risk. Now, survival suddenly requires being fully armed with a digital advantage and there is no margin for error or lost time.
— Bryan Rogers, Managing Director, San Francisco office
Small and medium-sized companies must adopt new platforms and operational systems to create more direct-to-consumer experiences. For restaurants, that may be integrating with platforms like Grub Hub or UberEATS—while B2C companies of all sizes have an opportunity to invest in expanded consumer outreach marketing through platforms like Facebook Marketplace, Instagram, Google My Business, and LinkedIn. Data-informed audience segmentation can help companies differentiate the strength of their brand through direct-selling.
3. Leadership effectiveness to maintain an exceptional talent base
Leadership effectiveness will take center stage in 2021. Companies that understand it is “their employees” that are the key ingredient propelling their next wave of growth have an advantage in attracting and sustaining great talent. When leaders daily demonstrate a genuine “people over profits” approach to those they lead, that’s a super skill. In fact, the human-to-human dynamic is more needed and more powerful than ever right now. Most companies, during challenging and accelerated change, lose sight of the individual and what they bring to the team in individual contribution, especially in a remote work landscape. Leaders must proactively create a structural support system to meet the needs of employees at every level.
Organizations that utilized the past 10 months of COVID-19 disruption to review skills sets, break down silos and unnecessary hierarchy, and foster inclusion in a new virtual workplace world—those companies are better positioned for market leadership moving through 2021.
Companies that seized the opportunity in 2020 to position the right people in the right roles and renovate their leadership approach—are better positioned for sustained growth.
— Sunil Kasturi, Chief Growth Officer
Another leadership practice for maintaining an exceptional talent base is the ability to lead others with organizational grit—a modeling and encouragement of resourcefulness, agility, and cross-team facilitation. This leadership approach promotes a post-pandemic operating model that solves for speed and rapid decision making—considered the next-horizon power that will drive productivity and propel resilient companies into new waves of growth.
If there was ever a time in the last decade to embrace grit and embody it individually and as organizations, that time is now.
— Sunil Kasturi
Finally, as companies move into a changed 2021 business environment and must transform to stay competitive, those that broaden their talent sources, including consulting partners, are able to challenge assumptions to help them get unstuck from decision paths that have worked a certain way in the past but are no longer adequate in today’s changing landscape. This often takes the form of barriers that require fast-dissolving to keep leaders, teams, and companies coalesced around net-new strategies and implementations.
In summary, speed and agility, once the bastion of Silicon Valley startups, has now become the key DNA marker in companies that will emerge stronger and more financially viable in the post-pandemic world—no matter their size. Companies capable of capitalizing on this moment to create rapid organizational alignment around wholesale strategy shifts that, at their core, desire to meet the changed needs of the consumer and the employee—those will be the companies to watch in this new year and forward.