New Business Models in the era of Uncertainty

Changes are usually made by companies in times of normality and usually when things are going well.

But the truth is that the global backdrop and business environment has changed in the last 10 years. How?

More frequent and often larger and unexpected crises are observed. The climate in which businesses are called upon to survive and grow is a climate of continuing uncertainty.

A few years ago it was the global economic crisis that lasted until recently. Now is the next crisis of COVID19 – a health crisis leading to a global financial crisis.

The common thing to all previous and subsequent crises is Uncertainty – Uncertainty

In such circumstances, in order for an organization to ensure resilience, it is necessary to develop specific business skills such as speed in adaptation, cognitive ability and flexibility. Digitization and digital function capabilities are also required for abstraction, rapid analysis and processing of data and information.

In other words, the business model will be different and requires adjustments and/or radical changes in business models:

• Strategic and operational planning. Porter’s techniques and models are now inadequate. Learning and using new tools such as Blue Ocean Strategy is required. However, the lean operation tools are still useful.
• Sales and Marketing adapted among other things to the new purchasing behaviors of consumers that will be more personalized to the individual needs and expectations of consumers, buyers and which will require continuous analysis of main data and information and their adaptation at faster times.
• Liquidity management. It becomes a strategic process since in times of uncertainty the liquidity drawdown becomes more difficult. As a result, business adjustment will increasingly be made with equity and businesses will often be asked to cover their operating costs from stocks.
• Supply chain. The supply chain is significantly affected in times of crisis such as that of COVID-19. Countries islands such as Cyprus are particularly affected. Adequate procurement coverage in relation to keeping as little inventory as possible becomes a difficult exercise that requires sophisticated forecasting models with built-in algorithms to deal with supply emergencies.

• Funding. Traditional ways of financing through Financial Institutions fail to meet the needs. New tools will be needed such as attracting investors, staff shares purchasing plans, barter-type agreements, and targeted state grant plans. And when I say targeted, I mean projects that lead to improved profitability results and, by extension, higher taxation so that these projects are self-funded.
• Technology management (materialistic and software)

• Information management, data and behaviours and decision-making trends. All of the above should be studied in the light of the use of information technology that give the necessary cognitive ability to businesses for quick decisions and adjustments.

New models, methods and practices are also needed:

• Administration and leadership. Traditional ways of organizing and managing have not been effective for many years. Hierarchical organizational charts(vertical or horizontal) are unable to respond to  the  new  Flexible (agile) organisations are required together with job performance specifications instead of job descriptions. Performance specifications are strong in terms of clarity of expected results rather than responsibility for work. In addition, win/win-win relationships and accountability and valuation systems   are strengthened. Finally, encouraging pay systems are incorporated into work on the basis of specific, measurable and within a time limit results.
• Communication and engagement. Formal and informal communication systems will be reinforced by the need for more frequent but shorter and effective contact with staff. Communication systems will incorporate video conferencing technologies as well as other technologies such as tasking, practice-keeping, etc.

• Performance management and remuneration systems. In addition to what has been mentioned above in the management and leadership sector, companies will begin to integrate into the returns and remuneration systems and other pay packages such as acquisition of shares, fees for doing business not as usual, etc.
• Motivating. People/employees will increasingly ask for what is not bought with money and significantly affect their degree of pleasure at work. This will require total changes in the culture and motivation mechanisms associated with both work content and the working environment.

In ConiCon for the last 10 years and especially after the financial crisis of 2013, we have been involved in projects of restructuring, strategic and operational planning, culture change, implementation of performance management systems and incentive payment systems, simple production and operation in small, medium and large organizations in the sectors of manufacturing, trading, telecommunication, online service, IT.

Yiannakis Mouzouris
Strategy and Performance Management
Expert / Business Consultant / Trainer
B.Sc. Mechanical Engineering
M.Sc.Engineering Management, US