It is safe to say that the COVID-19 period was and still is a very intense time for business strategy professionals. More knowledge than ever was needed to ensure that a company could at least get through 2020 and 2021 with a reasonable performance. It is no coincidence that companies have turned more than ever to their internal strategists, but mostly to external experts, to develop a new business direction. Many are asking what is needed to build a strategy now, in 2022, that will not only provide a way out, but also a potentially more productive future for a company. Is it a time for calm, a time to seek security? Or is now the time to take risks, perhaps more than ever? What really makes a good business strategist? The answers to these questions are today a “hot topic” in every business segment worldwide!
What’s past is past
This is perhaps the most important principle that needs to be established if we are to put in place a workable and effective strategy for the years ahead. Although even in strategy education, it is often recommended to young consultants and mentor planters that there is a lot to be learned from the past, and this is generally true. But it is now an era that is very difficult to find anything like it in a strategic approach. The great thing about really good strategists is that in a situation that seems brand new, in a situation where traditional knowledge is running out, they can always find a ‘strategic recipe’ from the past that can be refined, adapted, tailored and applied to the circumstances in order to succeed in the end. In most cases, these solutions seem genuinely new, sometimes ground-breaking, and it is only up to the strategist’s level of sincerity whether he or she keeps the partner, the business decision-maker who commissioned the strategy, in this belief, or reveals his or her cards. This is why the BIG 4 firms have cornered this market for so long. If you wanted a complex business strategy, you had to go to them, because they had an international network and could easily provide recipes. It is another matter that it was up to the consultants to adapt the recipe to the specific circumstances, so there were regions where a serious international consultancy had an incredibly good image, while in others local businesspeople found it a huge disappointment to work together. The solutions became flatter and more generic, while the pricing remained extremely high. As a result, the level of frustration has also increased to a serious level. But this process was already in place before the pandemic, and the virus crisis has only helped to clarify the picture. However, an increasing number of small, boutique consultancies, initially operating locally, have been able to grow, particularly in the field of strategic consultancy. Of course, these smaller firms are also staffed by competent experts with a very strong professional background, who have seen the weaknesses of the large multi-system, but have been able to retain the advantages of the international network. Whichever direction a company chose, it was sure to have access to recipes that worked in strategic areas. The question was how much effort the consultant would put into translating this into practice, and whether he could do it at all at local level. But that time has passed. At least when it comes to finding effective solutions to current strategic challenges. With very special exceptions, no one has the experience, no one can offer a proven solution that pre-dates the virus crisis, is properly documented and can actually be applied to the strategic problems caused by COVID-19.
Mental crisis
Many people have analysed, and many more are asking professionals, what makes the current situation so special at the strategic level that the solutions of the past are simply failing and not worth touching. The answer is simple and in some ways a bit “banal”. All past economic crises have been triggered by a particular economic segment or business sector, and have generally grown in magnitude because of spill-over effects. As the crisis escalated, the effects were always later felt in the lives of a particular section of society in a particular region, and from there caused local, regional, or even global economic problems. From a strategic point of view, therefore, and without devaluing the serious expertise of any strategist, the task was to seek out the documentation, analyses and conclusions of the process of the crash that preceded the crisis in question, in a calm and objective manner, and to draw the appropriate “run-off process”. Then, crisis management always had to focus on the sector in which the crisis had occurred, while ‘writing off’ the damage caused by its effects, and the strategy could always be based on the assumption that the market would rebound in a similar framework. Although the “Great Recession” had already thrown a spanner in the works, as everyone did and expected the same after 2008. It is no coincidence that the first serious failure of faith in strategic consultancy is associated with this period, since the ‘tried and tested recipes’ did not work. But the process started in a very similar way to what happened before, with the real estate sector exploding in a particular region, the US. The only thing that the clever experts did not take into account even then was that, in addition to the dry economic facts, there is an “element” of crisis analysis called ‘the man’. So they did not consider how the human psyche can react, and in most cases overreact, to a crisis. This is one of the reasons why, from 2009 onwards, different regions and countries have recovered from the crisis in very different ways and to very different degrees. In fact, there are countries that have not been hit very hard mentally by the pandemic because the entire solvent demand, the people themselves, have still not been able to recover from the psychological situation caused by the last crisis. Very few economists thought that the events that started in 2008 would now amount to a “negligible test” just over ten years later! And so they have! You could say that the last warning for the economy has been given. Of course, we are only focusing on the economy, and we do not want to go into how many very clear warnings have been given to humanity as a whole in other respects over the past decades. But this is now a very serious mental health crisis – which we are experiencing today – which economic actors did not really grasp last year. This year, too, we can see that we are just beginning to understand what has happened here and what the impact will be in the long term. Because people’s private lives here have not only been under attack, but we can say that we have been at war for two years and we are increasingly having to take up jobs and live our lives in war conditions. People’s mindsets, priorities, expectations have been completely transformed, the world around us has been turned upside down. So today, a strategist must build a new strategy in the midst of war conditions that will provide a solution for a business in an unknown future!