In my first blog from this year’s Collision1 from Home conference I highlighted the urgent need for courageous leaders to guide us through the disruption in our new reality. The need for courage was closely linked with the reality of ‘acceleration’ – acceleration of advanced technology, acceleration of new workplace models, accelerated growth in some industries and declines in others and accelerated adoption of digital social interactions.
Insights about why courageous leaders are needed in this hyper-accelerated world is the subject of this second blog from Collision from Home.
As Armughan Ahmad (Canadian Managing Partner, Digital and Technology Solutions, KPMG in Canada) described it in the ‘Future skills for a new reality’ roundtable, the education system and corporations have had to accelerate their digitization efforts due to COVID-19. Both now also have a responsibility to ensure that they are upskilling their talent in order to thrive in the new reality.
Armughan summarized four key digitization trends that weaved their way throughout the conference.
- Virtual work/learning environment: Organizations that did not previously promote work from home environments quickly adapted; some companies with pre-existing remote workforces are already moving towards making that a more permanent approach.
- Automation: Coming out of COVID-19, automation will be crucial. STEAM (Science, Technology, Engineering, Arts and Mathematics), especially the arts, will become increasingly important as companies look for people who are empathic and creative to add the human element to their automation processes.
- E-commerce over bricks and mortar: In Canada, as an example, small businesses with fewer than 100 employees contribute approximately 51% to the country’s GDP. Among these small businesses are family owned restaurants which are typically some of the last to move toward e-commerce. These companies will need to undergo a digital transformation including employee training to thrive in the digital age.
- Supply chain changes: Many companies rely on offshore supply chains because they are more cost effective. Companies are now looking to source locally, which also opens the door for automation.
Consumer behavior and expectations are accelerating rapidly as well, which is why Rishi Khosla, Co-founder of OakNorth Bank, has suggested that finance will never be the same as we enter a new reality.
How customers will change the face of finance
The financial crisis for SMEs highlighted the absence of relationships and connections between small and medium businesses and banks, Rishi said. In the 1980s, it was common for bank branch managers to take care of a small number of small-business customers. They reviewed their business plans and were well aware of their customers’ funding requirements.
In the 1990s, most banks took away the knowledge that was in the field and replaced it with computer-generated cash flow analyses and a “computer says no” approach. Rishi said that a great deal was lost in this centralized decision-making model by taking away the direct customer knowledge and relationships. It is his belief that the new reality will bring back the vital importance of customer relationship-building given the urgency to help entrepreneurial businesses grow.
The effects of COVID-19 continue to be felt around the globe and all types of organizations, well beyond the banks, are making every effort to anticipate and prepare for the changes that are coming in their customers’ needs, behaviors and preferences. A new report entitled “Consumers and the new reality” was released recently by KPMG and it digs deep into issues such as these:
- The new consumer is deferring non-essential spending and decreasing their discretionary purchases. They are less inclined to pay a premium for branded products and nice-to-have experiences.
- They are digitally savvy and have embraced digital access for purchases and customer support. Consumers of all ages are keen for this to continue.
- They want to buy from companies they trust and building that trust has become more complex. They want to trust that you will put their needs first and that their data will be secure.
There is no doubt that hyper-acceleration requires resilience for business survival and future success, the agility to evolve over time and respond quickly when circumstances change. If you’re interested in reading more about resilience in a hyper-accelerated environment, I think you’ll find the KPMG COVID-19 Guide to Maintaining Enterprise Resilience (PDF 3.9MB) to be useful tool.
We at KPMG Private Enterprise have always believed in the tremendous possibilities for entrepreneurs and emerging growth companies. I encourage you to follow our regular KPMG Private Enterprise series of blog posts as we share insights from across KPMG member firms on the impact that COVID-19 may have on your business strategy and operations, and how to embrace the new reality of a post COVID-19 world.