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To think that any V-shaped recovery of the economy from now onwards will be spontaneous and smooth is being naive. As a student of International Business and an Anthropologist, I have been studying consumer & business behaviors and Socio-Political behaviors, and the findings are fascinating.
The economy has its own characteristics of cycles, the bust and the boom in continuation. As is the rule of nature, after every high, there shall be a low. However, significant turbulences like wars, pandemics, and natural disasters can create unusual, unpredictable behaviors in the economy. Emergency measures of lockdowns and structural changes in the economy can create tectonic shifts in business dynamics. COVID-19 shall go down in history as one such shift.
Member Nations, while at the level of the World Trade Organization, seek consensus on collaborative growth. However, National interest runs supreme, thus the slow and tedious process of consensus-based world order. While WTO’s interest lies only in trade, services, and intellectual property United Nations carries the mandate of a much larger dimension along with the World Bank. Thus aptly called the Brettenwood Twins created post World War II.
The dynamics today are intricate. The world dynamics are now strongly oriented towards hybrid warfare, where the economy is the target. The military is hard power, but information, intelligence, content, market, and currency are soft powers. The 21st century is emerging as the era of soft power.
So what happens when the economy takes the path of recovery? All Nations want their share of the market and accelerate their economies. Liberalization, privatization, and globalization shall remain the basic rules. Free trade agreements and Regional trade agreements shall continue; however, after every significant shift, economic alliances become a priority. In most situations, shared boundaries remain conflict areas because land and food are priorities for all Nations. However, that can be a smokescreen in the hybrid war. Hybrid warfare is essentially about paralyzing the Nation and its economy through multiple fronts where it’s culture and ethos must also be dented. Even if the intellectual assets of a country can be made vulnerable, it suits hybrid warfare. Ultimately each Nation has created its assets and capacities in terms of infrastructure, which need to be utilized else the economy will capitulate, taking the Nation along with it. Thus turbulences both internal and external to every country become part and parcel of global dynamics.
Thus the economy is the most valuable determinant today; it also becomes a vulnerable facet of hybrid warfare. Organizations of the 21st Century must therefore brace up to the new reality of constant turbulence. These turbulences will be inherent to all economies. If that is true, then the hypothesis that the 21st Century is Volatile, Uncertain, Complex & Ambiguous becomes a reality.
So what should the Organizations do? As a Business Coach, I see specific dimensions that need immediate focus in every organization.
- The Senior Leadership of the organization must co-create. Each human asset within the organization must be oriented towards co-creation. It is a higher attribute than collaboration; it is about sourcing ideas across departments of interdependence and making them successful. If you can’t co-create, you are sunk.
- Turbulence triggers blue ocean innovation. Creativity and Innovation based on technology must become a priority. It is interesting to note that now business boundaries are blurring, and technology and businesses are intertwining to create radically different models. The domains are amalgamating. Thus don’t get fixated on domain convergence; go for domain diversity.
- Information & Communication Technologies (ICT) are making global boundaries blurred and empowering the consumer. It is imperative now to crowdsource ideas and listen to the chatter in the digital world. In the digital world, your presence there is a critical element. Invest in digital assets extensively. ICT is the core focus area of the World Economic Forum and Nations. How can businesses operate as islands? Adapt or perish.
- Consumer behavior shifts after every significant occurrence. Some habits will remain, and many will change. Organizations thus must be ready to reinvent their products, services, and business models. To believe that the migration of consumers will not happen is a myth.
- Lean and mean is the way. Cut the flab, let the inefficiencies surface, and fix them through technology. Flab creates cash burns. Turbulent economies need deep pockets.
- In the business value chain, only productive assets must be maintained. Create a web of outsourced specialists in the non-core areas and bring in extensive technology enablers and drivers in the core business areas. Make your value chain agile and technology-driven. Remove redundancies immediately and ruthlessly.
- Work designs and critical success factors must be determined and controlled. Skills and Competency matrix must be redesigned for this new reality. Monitor your productivity levels. Work from anywhere and cutting dead time is the key to success in the new economy.
- Knowledge management and augmentation shall be the force multiplier as new knowledge gets created every moment in time. Knowledge shall be the critical definer of every firm and Nation. Tech-enabled knowledge systems shall create sustainable organizations and Nations.
- Supply chains shall be the new space of power. Nations and organizations that create highly responsive and cost-effective supply chains shall be the winners. Countries that invest in supply chain infrastructure shall become the significant destinations of world trade. Supply chain control through information automation and analytics are a must now.
- Web of outsourced tech-savvy domain experts shall emerge as the critical knowledge assets. Organizations must become open to the idea of contracted time-based knowledge engagements.
The world will see the emergence of Digital Nomads who will operate from anywhere, anytime in a ubiquitous mode. They will be Multi-tasking Tech-Savvy domain specialists who will work on a contract basis. These new breed intellectual assets are the future business builders.
Technology and knowledge shall integrate to create sustainable Nations and Organizations. Agile Tech-Savvy Learning Organizations shall be the ones that will sustain this turbulence. Organizations that will create sustainable businesses in this new turbulent V-shaped economy shall yield tremendous soft power in their consumer connect through sophisticated use of knowledge, technology, analytics, and competent workforce. Critical success factors would be agility and disruptive innovations.
Competition with global brands is inevitable. Foreign investments will shift into Nations where consumers exist. Population and Leadership, both business and political, will determine this inflow of FDI. Turbulence and unrest will be the new norm, providing the impetus for growth and Innovation.
Are you ready for this turbulent V-shaped economy? For all, you know this is the character of the new economy, and the wise senior Leadership that steers the organization must now carry the baton. They must nurture the middle and the bottom of the pyramid to operate as intrapreneurs. Welcome to the turbulent V-shaped economy recovery.