You need to transform your business so it’s ready and resilient for your ever changing world.
Your Future Business needs you to do this now.
Jennifer Choo, Jean Oi, Christopher Thomas, and Xue Wu wrote an interesting article in The Diplomat, called After Covid-19: Rebooting Business in China.
It’s a survey of Chinese business leaders regarding China’s post-Covid-19 economy and the future of US-China economic relations. It’s a good overview of how Chinese businesses are reopening and how Chinese business leaders are viewing their prospects for the future.
Here are my key takeaways…
Key Questions for the Future of Business
The authors framed and explored the following types of questions:
- What kinds of businesses have done better and what kinds have done worse?
- What role has the government played in economic assistance and business reopening?
- How do China’s business leaders view the deterioration in U.S.-China relations, the possibility of decoupling, and even future access to technology?
Digital Transformation is the Most Important Change for Your Future Business
As if digital transformation wasn’t already hot enough, it just got hotter.
And the big barriers are technical talent and organization structures. I would say that a lot of companies are going to have to hit refresh and that change will happen at the speed of culture.
Choo, Oi, Thomas, and Wu write:
“Concerns regarding access to technology are particularly relevant because a large majority of respondents (63 percent), across the board, saw digital transformation as the single most important change their companies needed to make at this time.
The majority also identified the lack of technical talent (58 percent) and organizational structures (57 percent) as the biggest barriers to their ability to make such changes.”
Different Companies are Living in Different Worlds (Don’t Get Left Behind)
In terms of the impact of Covid-19, some businesses have done better, while many have done worse. Depending on the size of the business and the industry, it can be like living in a different world.
Choo, Oi, Thomas, and Wu write:
“We found that 80 percent of all companies surveyed were experiencing serious economic fallout, including lower-than-expected demand and forced reduction of their workforce.
This was true even for companies that were entirely focused on the Chinese local market.
Less than half of all companies surveyed, for example, have seen their demand and sales restored to their projected levels prior to COVID-19. However, these disruptions are not uniform across China’s businesses.
While some companies are in distress, others report doing better as a consequence of COVID-19, with optimism for their futures.
Different companies, depending on the industry and size, are, in short, living in different worlds.”
Tech and Online Companies Recovered Faster
The future of business is here, but it’s not evenly distributed.
Economic recovery is not uniform.
Tech and online companies recovered faster. And the trend favors technology firms and large firms that can weather the storms.
Choo, Oi, Thomas, and Wu write:
“In general, tech and online companies have recovered faster, at twice the rate of non-tech companies, to their pre-pandemic expectations. By contrast, one-third of non-tech companies have seen their demand drop by more than half. Perhaps not surprisingly, tech and online companies are twice as optimistic about their future (e.g., future market size and future competition) as their non-tech counterparts.”
“…the picture of recovery is hardly uniform. There appear to be real economic winners and losers in China coming out of this pandemic, and the trend continues to favor technology firms and large firms.”
Future Supply Chains Need to Prioritize Resilience
One pattern of recovery is an emphasis on resilience.
Choo, Oi, Thomas, and Wu write:
“Prospects for economic separation also loomed large when the questions turned to supply chains for local tech/online companies in China.
Sixteen percent of these respondents stated that they will be implementing heavy supply chain localization, moving to PRC-based suppliers as much as possible.
Another 8 percent are planning to move to a regionalized supply chain strategy, whereas another 22 percent responded that they would conduct an end-to-end supply chain review to focus on resilience.”
Tech Giants Gain the Lion’s Share of Market Power in a Digital Economy
It should come as no surprise that Covid-19 is accelerating the extreme advantage of tech giants and big brands to weather the storms, in an economic downturn.
Choo, Oi, Thomas, and Wu write:
“…the advantages wielded by technology companies and large enterprises align with what some have observed in the United States as well.
Levels of market concentration in the U.S. (as is true in China) have been rising over the last few decades and now, large U.S. companies that have the reserves to weather the storm will most likely survive the prolonged economic downturn that has been predicted.
Of these, technology giants in the United States similarly look to post the farthest gains as the digitization of work and life have become increasingly important to the economy.
Both countries, in other words, have seen their inequality levels rise to unprecedented heights in contemporary times and are facing a future where this trend may accelerate, thanks to COVID-19. The implications of such an economic concentration of wealth and market power may be significant.”
We’ve heard for a long time that Digital Transformation is key to business survival, but this really takes it to a whole new level.
You Might Also Like
Best Digital Transformation Books
Amazon Leadership Principles for Innovation and Impact
Digital Transformation Defined
Digital Transformation Explained
Digital Transformation is Ongoing
Every Employee is a Digital Employee
How To Drive Digital Transformation by Engaging Your Customers
How To Drive Digital Transformation by Optimizing Operations
How To Create and Cultivate a Digital Culture
How To Hit Refresh on Your Company for the Digital Era
How Leaders are Building Digital Skills
The Power of Scenarios for Driving Digital Transformation
3 Ways to Accelerate Business Value
Leave a Reply