The coronavirus pandemic has undoubtedly made a massive impact across the technology industry far and wide and is/will be a topic that dominates the strategies of tech CEOs for the close future. While we are adjusting to a new reality, how are tech CEOs of small and midsize service providers pivoting ‘back to normal' and what short- and long-term changes are they making?
Phase one of responding to the coronavirus crisis was about reacting and responding to the external event that was taking place and working with customers and operations as plans were disrupted. The market is unfortunately still in decline as customers conserve cash and reduce spending for the foreseeable future. This is the reality of where we are now in phase two and the imminent action needed is that of stabilisation.
Redirecting to New Realities
Many countries are still following the implementations of public health and governmental restrictions. In order to adjust to this new reality, tech CEOs must redirect their focus and resources with the aim of achieving two goals. First, remaining financially and operationally viable, second improving their position for future recovery.
The first phase of recovery starts earlier than many tech CEOs think. As soon as the organisation gains its operation footing back from the initial shock of the external event, this should be seen as the beginning and this could be a few months or a few quarters from the event itself.
We recommend the following actions for when this time comes:
- Find a new north star: Previous goals and aims may no longer be relevant, tech CEOs must set a new north star to lead the company forward in this new reality, this will help assess progress and make future decisions
- Reallocate the portfolio and product investments: Operations and investments may need re-jigging in response to the external event, look at where resources can be reassigned and new products developed for example for when consumer demand picks back up
- Revenue, revenue, revenue: Focus on earning as much as possible by immediately redefining current products and services to suit new customer and buyer priorities as well as getting the most out of current customers
- Empathy wins: Strengthen your organisation's brand in the short- and long-term by demonstrating real empathy to existing customers who may be struggling. How can your business support them to get more value out of their current contract for example?
A new normal
It is worth noting that technology firms are currently working under different operational circumstances. The majority of tech CEOs of "Gartner's Tech CEO Research Circle" (https://circle.gartner.com) have reported that their organisations have implemented a variety of changes as a result of the COVID-19 pandemic including:
- Adjusting sales models towards remote selling: 84% (39% are implementing short-term, whilst 45% plan to implement long-term)
- Adding/increasing flexible working hours: 81% (39% are implementing short-term, whilst 42% plan to implement long-term)
- Adding/increasing remote work: 90% (35% are implementing short-term, whilst 55% plan to implement long-term)
- Creating new products (39%), adjusting pricing to existing products (32%), and/or added free trials (29%) to better meet customer needs
Many of these measures will be lifted when the pandemic is ‘over' however in most cases, a third to a half of them are planning to keep these changes long-term. The disruption of COVID-19 has made many firms shift their focus on demand generation efforts from new business to existing customers (55%), and targeting more specific new business prospects (55%) to achieve greater returns.
The pandemic has taught many tech CEOs some harsh lessons, and they have made short- and long-term strategic changes in areas ranging from customer experience to their own internal employees working policies. Whilst the pandemic will end, these changes will carry on for what we'd argue to be the better for tech firms worldwide.
Bouncing forward, not back
Organisations should not bounce back from a disruptive crisis; they must instead bounce forward. Phase two is the start of this bounce. Tech CEOs must ensure they are making decisions to make the organisation successful for the future, not to resemble where they were before the crisis took hold.
The tech CEOs that will ‘win' this battle will take incredibly hard actions and make difficult choices, for the right reasons. They will acknowledge the market of weak customer demand and redefine/relaunch existing products appropriately as well as reallocate resources to build the products they will need in the recovery phase. Strong leadership, effective product management and heightened customer relationships will be key here.
In an uncertain time, we cannot predict what the future will hold, but those in leadership must take action in anticipation or face falling behind.
Rene Buest is research director analyst at Gartner
Only 34 per cent of those questioned said they are now experiencing lower-than-normal demand for their services, compared with 61 per cent previously.
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