Strategy in the Time of Covid

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Preamble

A recent post from Recon Strategy outlined the longer-term strategic implications of Covid-19 on 12 healthcare sectors. This post highlights the opportunity to redeploy corporate strategy assets to focus on the most important short-term strategy imperatives to not only ensure organizational resilience but to set up for success coming out of this crisis.

Corporate strategy teams have tremendous analytical, creative, and operationally savvy resources that are accustomed to jumping into new situations, getting quickly up-to-speed, and delivering value. Leaders should proactively point these resources towards these areas of greatest need in the short-term.

Like in a war, the engine of production needs to be focused on the things that really matter.

Strategy for Strategy

As the number of strategy concepts has multiplied I have found the “Strategy Palette” (BCG Henderson institute) helpful to select (and importantly to explain) the optimal approach for each situation. This meta-framework places industries into 4 quadrants based on the levels of “predictability” and “malleability” of their environments. In addition the authors suggest survival strategies for environments that are so “harsh” that the optimal approach has little to do with competition but is centered on sustaining the organization to fight another day by focusing, cutting costs, and preserving capital with an eye to subsequently entering one of the 4 strategic quadrants.

The Covid crisis places most healthcare (and other) organizations into a new strategic environment, which I’ll call the 5th quadrant (I co-founded a company by this name many moons ago so I’ll use it even though it’s not a thing).

The 5th quadrant

The 5th quadrant is unique because it requires simultaneously processing elements of each of the different strategic environments in the strategy palette. Strategy teams need to grapple with industry-shifting changes in both predictability and malleability, and they need to do so in an environment that is not just harsh but is also emergent (in most harsh situations you can see the problems a mile away, not so here).

  • We have lower predictability on some aspects of the future (e.g. structural changes to healthcare sectors) and improved clarity on others (e.g. telehealth acceptance)
  • We have a higher ability to shape the future in some ways (e.g. openness to sharing data for research) and lower dimensions of freedom in others (e.g. cross-border controls)

The short-term imperative is to deal with today’s harsh environment while keeping an eye on the long-term implications of choices made today.

Pivoting the strategy team

Today’s short term needs are very different from the usual corporate strategy team priorities, which are often centered on business strategy planning cycles and on well-defined “projects”. The focus needs to be on mitigating (and in some cases drawing advantage from) the shocks that healthcare firms are facing in multiple areas.

Here are some areas for proactive strategy teams to focus on:

Strategy team role in Covid

Specific examples of questions for each follow:

  1. Demand: What should we be doing to enable patients to access our services and in what way do we need to modify our business model? (for instance note that the answer is not “telehealth”, it needs to address the workflow, technology, training, make v. buy etc. and a business-model that needs to come together on the fly).
  2. Supply: What are the most critical gaps in our supply chain that we need to anticipate and what are the levers we can deploy and the “new” economics associated with the tradeoffs between efficiency and resilience?
  3. Operations: What is the approach to anticipate and rapidly respond to critical operational challenges and how do we strike the right balance between empowering the frontline and coordinating centrally?
  4. Employees: What are the ways in which our employees are stressed by the situation and what can we do to help them (not just access to physical and mental health care)?
  5. Cashflow: What are the changes to tradeoffs between capital efficiency and sustainability that we need to act on today?
  6. Partners: What should we be doing to ensure sustainability of our critical partners and what are the right win-win approaches for us and our partners?
  7. Competition: What do we need to do differently relative to our competitors including where does it make sense to partner with them (obviously without triggering anti-competitive issues)?
  8. Corporate development: What new opportunities and risks does the environment create for M&A and related activity that’s in process as well as that was planned?
  9. Contracts: What is the status of all our (thousands of) contracts including leases and service contracts and what levers do we have and should we be pulling and when?
  10. Social responsibility: What should we be focusing our available resources on and how to do so to best support the communities we operate in and that our employees care about?

The competencies of strategy teams are well-suited to help with these topics including the ability to:

  • Quickly collect, analyze, and draw inference from data that’s not easily accessible
  • Surface insight to top management from all parts of the organization e.g. across layers, departments, and divisions
  • Navigate interdependencies across departments, divisions, and locations
  • Reconcile and make sense of disparate internal and external viewpoints
  • Distil the tradeoffs and key choices and the rationale behind each option

Importantly this work will help engage people across the organization.

A Silver Lining 

While many employees are fully engaged working directly or indirectly to help patients and keep research going, there are also many who have time on their hands and the capacity to think more broadly.

There’s a huge opportunity for the leaders and the corporate strategy team to find them and engage them in problem solving. Doing this will also keep the best people connected and valued through this difficult and stressful time.

We have found that collaborative and creative work including, for instance brainstorming workshops can be done incredibly well remotely and doing it builds skills and best-practices for virtual teams, which is an important asset in itself.

But getting to insights from everyone in a large organization requires scalable ways of crowdsourcing.

Capturing and acting on employee insights

Often in large distributed organizations with multiple business units and locations, the real insights are buried in the organization and it’s hard to efficiently draw it out and separate the wheat from the chaff.

We’re partnering with Entromy to deploy their organization insight generator specifically tuned for healthcare organizations in the context of the Covid crisis. This online tool allows us to survey employees in a way that’s light-touch and that can quickly draw insights from their structured and unstructured responses to hone in on problem areas, surface creative ideas, and identify best practices. We can do this quickly and cost-effectively across large distributed firms within days. Just to put this in perspective, a typical survey of say 10 to 50,000 employees could take at least a couple weeks to get out the door and then another few weeks to get back and process, and even then the unstructured ideas are often lost. We can do that in days using this automated platform that already has a tuned set of questions and benchmarks.

Conclusion

Strategy teams need to shift focus to identifying and acting on Covid priorities because choices we make relating to this crisis involve trade-offs that have fundamental long-term implications and because they have unique capabilities that are well-suited for this crisis.