By Alberto Lopez Valenzuela, Founder and CEO, alva, and author of The Connecting Leader
While there is much talk of the world “returning to normality” with the worst of Covid-19 now hopefully behind us, it seems unlikely that society will allow businesses to simply revert to how they behaved before.
Having been plunged into uncertainty by Coronavirus, businesses have been rapidly rethinking their stakeholder management priorities, conscious that the corporate reputation rulebook is being rewritten. Some are already showing they have learnt from these valuable lessons as the Black Lives Matter crisis unfolds.
My assessment is that we’re now in the middle of a second distinct phase of the changes initiated by Covid-19, and will sooner or later be moving into a third, fourth and final phase. And after that, a new reality will emerge.
Each of these phases has seen the needs of different stakeholder groups come to the fore, prompting corresponding corporate responses.
Shock and survival
Roughly corresponding with the second half of March and most of April, the early Shock Phase involved an outpouring of altruism from businesses in all sectors, committed to doing the right thing, whatever the cost.
The stakeholder groups that were the focus of this charitable period were society at large, the local communities surrounding a given business, and key workers, especially those in healthcare. Empathy and solidarity were the order of the day; resources were redirected into healthcare, to support the vulnerable with donations, and to allow payment holidays.
In late May, businesses moved into the Existential Phase. Here, the stakeholders most in focus were company employees, as decisions had to be made about whether furloughed staff could be retained, and how best to ensure job security.
In making pragmatic decisions for their survival, the importance of each company’s people – and who could and could not do be done without – had to be weighed up. This evolved into a focus on employee health and wellbeing, as firms attempted to ensure that staff were protected, safe and comfortable as they moved to reopen their businesses.
Recovery, then letting our hair down
Around late June, we’re likely to enter the Recovery Phase, with businesses turning their attention to the chance to reopen and recoup some of the losses experienced during the worst of the crisis.
This will mean a refocus on financial stakeholders – companies will seek to assuage shareholder concerns on their viability. Decisions over whether to pay out dividends or channel cashflow back into the business will become front-page news, while firms will also look to project an image of ‘business as usual’, ahead of this actually having been realised. Shareholders’ needs have come under scrutiny, and their dominance as the primary stakeholders in business decisions has been seriously questioned.
Sooner or later, we’ll enter the Pent-up Demand Phase. After suffering the deprivations of lockdown, demand for pre-Covid luxuries will soar. People are likely to feel they deserve that big night out, the rush of retail therapy, or a long-awaited holiday abroad. And as financial hardships will mean many consumers’ spending power is reduced, companies will need to be especially creative as they jockey for position to be the beneficiaries of this wave of spending.
We might repeat the above cycle, or parts of it, more than once.
But in time, we will get to the New Reality, a post-pandemic take on capitalism that may well rewrite the rules of business as usual. Through the phases of business response to Covid-19, it was demonstrated that companies were generally able to rebalance their stakeholder focus as events shifted.
The virus has proved that the business world is able to step away from hierarchical shareholder-centric capitalism in which financial stakeholders are always the top priority, and move towards a model in which stakeholder prioritisation is fluid and based upon shifting needs.
This more stakeholder-focused model would mean businesses positioning themselves as part of society, with equal responsibilities to employees, customers, the community and their shareholders, rather than solely as a conduit for channelling profits to investors.
It would build on the growing emphasis on environmental, social and governance (ESG) issues, and we may begin to see increased finance streams being redirected into fair employee pay, community programmes and enhanced customer service.
The trade-off for shareholders on the receiving end of reduced dividends is simple, and very attractive – a stake in more robust businesses that are better able to survive whatever the future brings.
If so, the Coronavirus may ultimately be remembered as the catalyst for the realisation of a fairer, more enlightened form of capitalism that allows society and the planet as a whole to thrive.
GOING GLOBAL: 7 TIPS TO GET STARTED
The idea of selling your products or services to new markets across the globe is an attractive prospect for any business, large or small. But while reaching new customers and unlocking the potential for further growth can seem exciting initially, adapting your business to foreign markets is no small feat. Factors such as cost, communication and cultural differences can all affect your business’ success when going global. This guide will explore some of the key considerations to make when you’re thinking of expanding your business overseas.
Evaluate Your Finances
One of the main questions to ask when looking to go global is whether or not your business can afford to do so. Crossing borders can be a complicated and expensive process which can take away time and resources from other opportunities at home. Growth for businesses abroad is often a slow process; establishing products and services in other countries takes time, so you will need to factor this into your planning. Thorough analysis of domestic and international markets should always be undertaken before making the decision to expand your business overseas.
Location, Location, Location
Choosing the right location is crucial to the success of your business expansion. International business network Going Global Live says that taking your business to the right countries initially can save you money on excessive marketing and advertising, putting you face-to-face with your target market from the outset. You should weigh up the pros and cons of potential locations, such as the likelihood of being able to fill your new HQ with prime, homegrown talent, as well as access to desired markets aided by foreign investment bodies. It is also important to consider the relevant laws and regulations laid out by national and regional governments.
Ensure You Have the Right Infrastructure
Making sure your business has the right infrastructure to handle expansion abroad will put you in a good place going forward. Implementing a clear management strategy, both locally and centrally, will set your business up for a smooth and successful launch overseas. Having up-to-date IT and communications systems at the centre of your business will allow you to share information and data securely. When it comes to shipping, choosing the best – and most efficient – transport and storage providers will give you the peace of mind that your products are safe in transit. Companies such as S Jones are ideal for businesses looking for more information on storage solutions for shipping overseas.
Build a Strong Team
Appointing a strong team to oversee your expansion is crucial to your company’s success in new markets. Hiring people with a good knowledge of your target market, as well as a focus on your business’ interests, is key when establishing your overseas HQ. Working with local partners can help you to communicate your business’ unique selling point in a meaningful way. Having an experienced partner or mentor that you can trust to oversee the expansion will allow you to stay focused on the bigger picture and ensure that your attention isn’t taken away from your core customer base.
Once you’ve made the move to globalise your business, be sure to have faith in your ideas and don’t be deterred by slow progress. Dr Shai Vyakarnam of the Cranfield School of Management says that while there is a fine balance between faith and stubbornness, you’ll need “incredible levels of self-belief and faith in your idea” to succeed, and that you “only need to be able to turn a few key people in your favour and the others will follow”. Making well-informed decisions quickly will allow you to stay on track and will nullify the threat of any lingering self-doubt. While progress may be slow at first, be sure to remain patient and be prepared to build personal relationships to gain the trust of your new partners and customer base.
Consider the Impact of New Ideas
When implementing new ideas for your business as whole, consider how they will be received by your new international customers, as well as by your existing customer base at home. What might be seen as a positive idea in your home country could be perceived as offensive or alienating by your customers abroad. Factors such as differing time zones, languages and cultural appropriateness should always be taken into consideration when making key decisions to eliminate the risk of alienating foreign customers and damaging your reputation overseas.
While it is important to have faith in your business and be patient initially, you should also be willing to make changes as things develop. Acting on the advice of experts is key to navigating new markets successfully. It may be that your products and services require innovation to meet demand, or that cultural differences lead you to make changes to your marketing strategy. Being adaptable will give you the best chance of meeting consumer demand on a global scale.
When trying to expand your business to an entirely new customer base, try to bear in mind some of the above points. As long as you remain patient and open-minded, then you should have little difficulty in marketing your business globally.
Homepage, S Jones Containers, https://www.sjonescontainers.co.uk/
‘7 Tips for optimizing international business communication’, 99designs, https://99designs.co.uk/blog/tips/tips-for-optimizing-international-business-communication/
‘Going Global: How To Expand Your Business Internationally’, Business News Daily, https://www.businessnewsdaily.com/8211-expand-business-internationally.html
‘Going Global Means Thinking Global: 8 Tips to Consider’, Cranfield School of Management, https://www.google.co.uk/amp/s/blog.som.cranfield.ac.uk/blog/going-global-means-thinking-global-tips%3fhs_amp=true
‘Our Top Tips for Going Global…’, Going Global Live, https://www.goinggloballive.co.uk/news/blog.asp?blog_id=21679
REDUCING FRICTION ONLINE HAS BECOME BUSINESS CRITICAL
Andrew Shikiar, Executive Director at the FIDO Alliance
The global pandemic has pushed the importance of remote access and authentication right up the agenda for many businesses. All those occasions where people would normally show up in person to open a bank account or pick-up some high street essentials were simply not possible for large parts of the year. Even as restrictions have eased across the country, these kinds of face-to-face transactions remain an unappealing prospect or a last-resort to many.
Not surprisingly, this has led to unprecedented demand for online and remote services. This brings with it a host of challenges and opportunities, and we have seen many examples of companies brilliantly adapting and reacting to this new way of life. But one issue that businesses and individuals have been grappling with for years – that of frictionless transactions and authentication – has now been put under a brighter spotlight as it is increasingly critical to get right.
Friction impacts the bottom line
The core challenge facing businesses is how to strike the right balance between giving customers the best possible experience of online service, and the necessary regulatory and security implications that directly affect – and often contradict – that ideal user experience.
We’ve all likely experienced the very real kinds of friction I’m talking about – it’s the account you gave up on registering for, or the purchase you abandoned because the process was just too frustrating.
Friction like this has direct bottom line impacts through the loss of sales and/or disaffected customers – and it is substantially more pronounced in the current climate. People have less money to spend, they are spending a greater proportion of this reduced pot online, and businesses are competing for their livelihoods to claim their share. Providing a frictionless experience can be the difference between success and failure.
Banking and retail lose out
Nowhere is this problem more keenly felt than in the retail and banking industries. Countless transactions simply don’t happen each year due to issues with passwords or mobile One Time Passwords (OTPs) at the point of signing-up or checking-out.
Data from Statista shows that 69.57% of digital shopping carts and baskets are abandoned and the purchase not completed. And Mastercard’s analysis estimates that up to 20% of mobile e-commerce transactions are abandoned or otherwise fail (e.g., from undelivered SMS OTPs) mid-way.
In addition, independent web usability research institute Baynard found that one out of five consumers abandoned their online shopping carts citing the checkout process as “too long and complicated”. That means 20% of customers taking their custom elsewhere, likely to a competitor, because the process presented too much friction.
Passwords are a major part of the problem
Organisations have struggled to strike that balance between frictionless yet secure online log-ins in large part because of historical dependence on passwords – which simply aren’t fit for purpose in today’s online economy. Passwords were designed to be simple but, as we can all likely attest, they have become incredibly cumbersome and difficult to manage.
The demands placed on consumers to remember and keep track of the array of different passwords they need, and the different requirements of password complexity which varies from provider to provider, is proving to be untenable.
Not only are passwords a major cause of consumers giving up on purchases or preventing them from signing up for new services, but they also fail in delivering on their primary objective: to protect accounts and sensitive data. All too often the password has proven to be a single point of failure, and one that is all too easy for hackers and fraudsters to get hold of – a trend accelerated by the coronavirus pandemic.
There has been a move toward developing and adopting open standards that enable any online service provider to authenticate users in a way that is both highly secure and almost completely frictionless – with all major platform and cloud service providers coalescing around a common approach.
It’s clear from the way consumers have embraced using their fingerprints and FaceID to unlock their devices that simple, natural gestures work – and that they are often preferred over using a password. By adopting the latest authentication standards, organisations can enable their customers to use these same easy gestures on their every-day devices to prove their identity and approve even the most sensitive of transactions.
The standards also improve security by moving away from the traditional model where your password or similar piece of ‘secret’ information is stored on a server, to one where credentials are stored on an individual’s device. This means they cannot be phished or divulged through other means of social engineering, while also inherently stopping the large-scale breaches that impact millions or billions of users in one go.
Due to these developments, the kind of poor user experience that leads to abandoned shopping carts and lost customers during the sign-up process is completely avoidable. There is now nothing stopping banks, retailers, and a range of other businesses from offering a superior, and low-friction user experience while also maintaining the safety and integrity of the networked economy.
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