Using Net Promoter Score in your business strategy

What is Net Promoter Score (NPS)?

NPS is a measure of customer advocacy for your business, product or service.

It is frequently used as a proxy for customer satisfaction.

How do you measure and calculate NPS?

NPS is measured by asking customers one simple question: "How likely is it that you would recommend [brand] to a friend or colleague?" Answers are provided as a score from 0 to 10. 0 indicates "Not at all likely", and 10 represents "Extremely likely".

Based on their response, customers are then divided into three groups:

1. 0-6: Detractors
2. 7-8: Neutral
3. 9-10: Promoters

The final score is calculated by subtracting the percentage of customers who are detractors from the percentage of customers who are supporters.

Scores can range from -100, where all customers are detractors, to +100, where all customers are promoters.

What NPS is not

NPS is an extremely valuable indicator of the health of a business. Its widespread adoption also makes it a useful for benchmarking. It is easy to compare NPS scores across businesses and even across industries.

However, it is not particularly strategic. This is because:

1. It provides no indication of what the organisation is doing to achieve its score.
2. It is completely generic and does not capture the extent to which the brand is differentiated in the market.

And so, whilst I do advocate the all organisations should use it, I also also advocate that they should supplement it with other more strategic customer indicators.

Some tips for using Net Promoter Score

Despite its simplicity, it is still possible to use NPS badly.

So here are five tips for using it well.

1. Ask the NPS question as a single question, on its own, as close to the point of interaction as possible.

If possible, build the question right into the product or service. That way you get what they really feel while actually using your service. Not some half-remembered feeling which has been clouded by everything they've experienced since your product.

This is relatively easy to do if your product or service is digital. But it can also be achieved using some sort of simple terminal as customers leave your premises, or by follow-up email or text.

The further you get from the point of use, the less value you will get. Organisations who collect NPS as part of an annual customer survey tend to the get the least value of all.

2. Make it as easy as possible for the user to answer the question.

The simplest solution is to  present them with a series of round buttons labelled 0 to 10 with labels at the extreme ends of the series. The customer simply clicks on a button and it's done. No 'confirm' or 'submit' button is needed.

Even if you make it that easy, some people either still can't be bothered or will prefer not to answer.

3. Ask supplementary questions judiciously

NPS offers no explanation for the score.

So it might be useful to ask follow up questions. These can be tailored to the score they've already provide.

Most importantly, the original NPS score should be registered regardless of whether or not they are asked or answer any follow up questions.

4. Link the NPS answer to your unique customer identifiers

This enables you to segment your customer base by various other criteria and see if the NPS score varies between segments. (You obviously need to be careful to consider the statistical significance of any variations.)

5. Ask it about once a year

If your customers use your product or service repeatedly (which you probably hope they do!) don't ask them for an NPS score every time they do. About once a year should be enough. You might consider asking them more frequently if you notice a significant change in their usage pattern.

5 critical success factors for strategy execution

Many strategies fail in execution. These critical success factors will ensure that your strategy is not one of them.

1. An Integrated Strategy with Clear Goals.

A good strategy describes the why, the what, and the how. These are tied to specific, quantified business outcomes. It is communicated in clear and concise language that everyone in the organisation can understand and relate to.

Most organisations of any size go on to have an IT strategy, and HR strategy, a Marketing strategy, etc.

These should answer the question:

• "How will we use IT, etc. to deliver our strategy?"
  and not:
• "What is the strategy for our IT department?"

This is a subtle but important distinction in achieving alignment.

In the video in this post, Michael Porter argues that strategy must be integrated. Organisations with "an IT strategy, an HR strategy, etc." are less likely to have a strategy at all.

2. Leadership Commitment from CEO Through Middle Management.

Leadership should be both engaged and aligned. There is no room for spectators or armchair critics. This includes the often-overlooked middle-management. Ownership and accountabilities should be clearly defined.

Strategy involves making choices. The best strategies result from choices between many attractive options. But this means the honest people might have preferred different choices.

A good strategy process recognises that there is a time to debate those differences of opinion and a time to align behind the strategic choices that have been made. The two should not be confused. It should be permissible for people to say: "That is not the choice I would have made were it up to me, but I accept and will align with that choice." Leaders who cannot align should choose to leave or be told to do so.

Once leaders are aligned, they should use every opportunity available to show this through their words and actions.

3. Deploy the right skills.

Inevitably, a new strategy requires an organisation to do things it had not been doing before.

This requires employees to demonstrate new capabilities and skills. Often times, employees won't have those skills. Or their capabilities in that area may be underdeveloped or even rusty.

To be successful, an organisation must either train its existing people in those capabilities and skills, or bring new people in who already have them.

Unfortunately, in some circumstances, the organisation will have to let people go if they are unable or unwilling to change. Although difficult, that may be for the best. No-one wants to be a square peg in a round hole. Organisations doing so should do so with dignity and support. Those that remain will judge the organisation based on how it treated those that left.

4. Adopt an Agile Mindset.

There are still instances where old-fashioned waterfall management of large programmes remains the only option. But they are becoming fewer and further between.

In all other instances, an agile mindset will fare better.

• Break changes down into their smallest possible components. Sequences and deliver them incrementally.
• Identify and address roadblocks quickly.
• Accept that not everything will go to plan and not all changes will be successful.
• Learn lessons from each success and failure and feed these back into the process.
• Prepare to undo unsuccessfully steps. This will reduce the costs of failure relative to the benefits of the lessons learned.
• Make adjustments to the plan on an ongoing basis. It is not cast in stone.

5. Monitor Progress Towards Outcomes.

It's easy to get swept up in the doing - the execution. However, it is important the organisation tracks not only:

1. Is it doing what it set out to do?
   but also
2. Is it achieving the outcomes it set out to achieve?

Of the two, the latter is by far the more important. And the more often overlooked. It also requires that your strategy was expressed with clear goals in the first place. (See success factor 1 above.)

Progress should be tracked monthly, if not weekly, and reported widely. It should be objective and transparent.

Inevitably, generating, recording, processing, analysing and reporting the data used for such KPIs will take some work. This work should be considered to be at least as important as the work to deliver the strategy itself.

If you're struggling with any of these critical success factors, please contact me for a free no-obligation consultation.

What if your map is wrong?

If you want to get from point A to point B, you might use a map.

But, what if your map is wrong.

A familiar map of the world

Most of us are familiar with a map of the world which is based on the Mercator Projection (show to the left).

The Mercator Projection has many virtues. But it also has many limitations.

Notice, for example, the relative sizes of Greenland and Africa. In reality, Africa is 14 times larger than Greenland.

These distortions occur because the map is a flat representation of a geospherical world.

Whilst the Mercator Projection is the map most of us are most familiar with, it is not the only one.

A sideways look at the word

For example, here is an equally 'valid' sideways map of the world. You probably have to look at it quite carefully to recognise what it is.

We're used to the idea that North appears at the top of the map, but, as this map shows, there is no reason why this should be so. Putting West at the top is equally 'valid' even if we find it a little disconcerting.

Each map has different purposes. The Mercator Projection is the way it is because it was most useful to European explorers. The sideways map, on the other hand, is better for showing the highlighted shipping routes from China to Rotterdam and New York.

The Dymaxion Projection

This curious Dymaxion Map create by Buckminster Fuller shows that the major landmasses are actually much more contiguous than the Mercator Projection might lead us to believe.

Types of maps

In addition to these different projections, there are numerous other types of maps, such as:

• political maps, which shows the boundaries of countries.
• topological maps, which show mountains and other features of the natural environment.
• cadastral maps which show property boundaries and built structures.
• thematic maps, which show any number of different attributes, like population density, for example.

Does any of this matter?

Most of the time: no, it doesn't. Most of us can get through the day with relatively simple street maps of our local area. Google maps with some sort of GPS is more than enough for most purposes.

But what if you have something more ambitious in mind?

What if you're planning on sailing around the world? Or expanding your business globally?

It has long been argued that the popular Mercator Projection gives us a Euro-centric view of the world. This, understandably rankles inhabitants of other parts of the world. It gives us a false sense of the distances between different points on the globe. And, given that people are likely to subconsciously associate size with importance, it distorts our perception of the relative importance of different regions.

So, if you are planning something more ambitious than a trip to the supermarket, it may pay to spend at least a little time making sure you've got the right map to hand.

What's all this got to do with business strategy?

Sometimes, geographic maps do matter in business strategy. For example, if you're planning a geographic expansion or building distribution.

But the point I was making was more of an analogy.

I'm talking about a map of our business environment rather than a geographic map. Instead of showing continents and oceans, a map of our business environment would show the relationships between:

• customers
• competitors
• distributors
• suppliers
• products
• processes
• resources, etc.

Have you ever seen such a map? Probably not. We've been drawing geographic maps for thousands of years. We've only just started drawing maps of business environments. And because business environments are more abstract and changing than the physical world, we've found it much harder to do.

Of course, that does not mean we haven't been trying. There are a large number of frameworks, models and canvases that have emerged in recent years. Like the geographic maps described above, each has its inclusions and omissions, strengths and weaknesses. And each is more or less useful in different circumstances.

Think of your business strategy as a plan to get you from point A to point B. But A and B aren't physical points on the face of the earth. Instead, they represent the current state of your business (A) and what you would like your business to become (B) to be successful.

If you have the right map, you just might get there. If you don't have the right map, you'll probably become disoriented, confused and lost. You'll head off in the wrong direction. Arguments will break out in your organisation about which way to go. You may never get to where you want to be.

If you need help mapping your business environment and plotting your path to success, contact me for a free no-obligation discussion.

About the author: Chris Fox is an independent business strategy development and execution consultant. He helps organisations develop and execute evidence-based future-oriented business strategies for growth and success. He is also the founder of StratNavApp.com, the online tool for collaborative business strategy development and execution.

Who're you looking at?

I am a huge fan of the COVID-19 induced shift towards remote working.

Two of the main benefits for me have been:

1. Less time wasted commuting and travelling to meetings.
2. The ability to meet with anyone with equal ease regardless of physical location.

However, I also understand that remote working might not suit everyone.

Some people have complained of 'Zoom fatigue'. Others struggle with unsuitable home-based workspaces and inadequate child care arrangements. Still others simply miss the buzz and camaraderie of being in a physical office.

I argued in How do you solve a problem like remote working? that the opportunity we now face is not that everyone can work remotely. Nor is it that we'll eventually be able to get everyone back into the office. Rather, it is to recognise that different people have different preferences. Different people are better suited to different environments. Some people are more productive when remote, others are more productive in the office. Once we recognise that, we can take steps to accommodate a broader, more flexible range of working styles and arrangements. And we will benefit from the diversity that affords.

We have a lot of experience with in-office work. As a result, the pros and cons are quite well understood.

But we understand remote work less well. We simply have less experience of it. And to best secure the benefits described above, we need to understand the pros and cons of remote working better.

I've heard many explanations of why some people struggle with remote working. One person told me it was because we couldn't smell and feel over video conference. I am not sure if they were mean smelling and touching a shared physical space, or each other (!) but either way, I am not convinced by that as an explanation.

I've also heard it said that some people find it stressful that they themselves appear on the screen when video conferencing. I am not sure why that should be stressful, but you can, in any event, disable that in most video conferencing systems.

A more likely explanation is that we miss out on some of the non-verbal cues when video conferencing.
I confess that at first, I dismissed this as an explanation. After all, I can see participants facial expressions and body language quite clearly.

But then I realised there is one element of body language I cannot see on a group video conference. I can't see who the other participants are looking at. I can see if they are looking at the camera or not. But I can't necessarily see if they are looking at the screen or not (the screen and camera may be physically separated). More importantly, I can't see which of the faces on the screen they are looking at.

Who people are looking at is very important. It shows where their intention is. It can show if you're paying attention to the speaker or ignoring them. People tend to look (physically) to the person with the greatest perceived authority. But we lose those cues in a group video conference.

On the positive side, this can help to break down traditional authority. To create a more egalitarian environment where people are valued more for their contribution than for their position. Meeting facilitators have been trying to achieve this for at least as long as I have been in the workplace! In that sense, remote working could be an even greater step forward than I had previously appreciated.

On the other hand, perhaps it is exactly that loss of positional power which has many people feeling uncomfortable with remote work in the first place!

What do you think? Please let me know in the comments.

Why should you do business strategy?

I think people ask this question because business strategy appears to be a discretionary activity. It appears to be something you can choose to do or not to do.

Most people recognise that a manufacturing business has to buy raw materials, turn them into finished products, and sell them to customers. If you stop doing those things, then your business has stopped. There are similar activities that would seem to be essential to other types of businesses, such as wholesale, retail or service businesses.

But strategy seems more discretionary*. If you stop doing strategy your business will continue to function. For a short time at least. Without strategy, your business may become less relevant over time. But it will take a while before the full effect is felt. And by then the damage is done. Your business is on the back foot. In a weakened state. Trying to catch up with a market where the competitors are stronger and better placed.

*Other functions like marketing or branding may suffer a similar challenge.

So when organisations are under pressure, it is often activities like strategy that are the first to suffer. 

When COVID-19 struck, organisations had their hands full. Setting their teams up working from home. Rebuilding their supply and distribution chains. They were focused on surviving the immediate present. There was little time left to think about what they would need to do to succeed in a decreasingly certain future.

Crises force organisations to become reactive. But strategy is a fundamentally proactive process.

It's ironic that at the exact times when the status quo is most disrupted and the future is least certain, when strategy is most needed, that most organisations are least able and likely think strategically.

And so it is at times like this that it is even more important than ever to have a clear answer to the question: Why should you do business strategy?

I think there are two equally important answers to this question:

1. Strategy is about how to succeed in the future

Experience teaches us about how we succeeded in the past. But we know that the future will be different from the past. We may not know exactly what will change. We may not know how big the change will be. We may not know how quickly it will change. But we do know it will be different. Ironically, experience confirms this.

If we had a crystal ball - if we could see the future clearly - we would have less need for strategy. But we can't. Strategy helps us fill that gap.

Strategy is not about forecasting or predicting the future. That would be a fool's errand. But it does present toolsets and processes that can help us to imagine, anticipate and prepare for not just one future, but a range of possible futures.

These tools include things like macroscanning, game theory and scenario analysis. 

See for example:

1. Scenario Planning for Business Strategy
2. 6 steps for using scenarios in strategic planning (info graphic)
3. And from a way back:
1. How to deal with chronic uncertainty (like Brexit) in business strategy
2. How should strategists respond to the US election result?

Wayne Gretzky, the legendary Canadian ice-hockey player once explained his success on the ice:

"I skate to where the puck is going to be, not to where it has been."

Wayne Gretsky probably only needed to anticipate the next few seconds of play to achieve this. How far ahead should we look when doing business strategy?

That depends on three things:

1. How fast can we move?
2. How long do we need to be there (before we move again)?
3. How fast-changing and uncertain is the environment?

1. How fast can we move?

It takes about 20 minutes to stop an oil tanker travelling at normal speed. So an oil tanker captain has to be able to anticipate at least 20 minutes into the future. (Fortunately, they've gotten pretty good at that, for the most part.)

If it is going to take you 6 months to develop and launch a new product, you need to be able to anticipate demand and market conditions at least 6 months into the future. Similarly, if it is going to take you 2 years to bring a new factory on line, you need to be able to anticipate demand and market conditions at least 2 years into the future.

2. How long do we need to be there?

If it costs you lot of money and resources to get into a position, then you need to be able to stay there for long enough to earn a return on that investment before you have to move to the next position.

Note that the distance you need to look into the future is the sum of both 1 and 2. That is you need to see far enough ahead to allow for the time it will take you to get there plus the time you need to stay there.

3. How fast-changing and uncertain is the environment?

As the Oracle in The Matrix Revolutions says: "No one can see beyond a choice they don't understand."

Some environments are inherently more complex and fast-changing than others. Sometimes it is in the nature of one industry to be more complex and fast-changing than another. Other times it can be a point of crisis (like COVID-19) which introduces complexity and change across many industries for a period of time.

The tools that strategy gives us will help us to a point. But eventually, in complex and fast-changing environments our ability to anticipate into the distant future becomes more clouded.

Then we have to deal with less granular understanding. This requires us to pursue strategies with higher degrees of inherent optionality. Alternatively, we focus less far into the future and restrict ourselves to smaller but more regular moves. Such organisations invest heavily in methodologies like Agile to shorten delivery cycle times and costs. (See also Agility needs a strategy.)

I conclude this section with a quote from William Gibson:

"The future is already here - it's just not very evenly distributed."

The clues lie all around us if we just look at them in the right way.

2. Strategy is about making choices

At any point in time, there is an almost unlimited number of things an organisation could do. And some organisations seem intent on trying to do them all, and often all at the same time!

Sometimes this is because different people can't agree amongst themselves which ones they should and shouldn't do. This creates a problem of alignment - or misalignment. Other times it's because organisations somehow think they can grow faster by trying to be all things to all people (customers). This creates a problem of focus.

But, as Michael Porter points out (in several different ways):

"Strategy is about making choices, trade-offs; it's about deliberately choosing to be different."

"Strategy 101 is about choices: You can't be all things to all people."

"The company without a strategy is willing to try anything."

"The essence of strategy is choosing what not to do."

So strategy provides frameworks for helping organisations to make decisions in a holistic manner; to achieve both alignment and focus in an organisation's efforts.

I like to say that you don't really have a strategy until you've used it to say "no" to an idea which, on a standalone basis, makes good business sense.

As several commentators have noted, COVID-19 didn't fundamentally change things. Instead, what it did was to accelerate existing trends. Changes which many people had anticipated would happen over the next 3-5 years were compressed into the last 4 months. COVID-19 merely sped things up. It removed obstacles holding back trends which had been building for some time. It forced people to confront challenges they had previously been putting off.

As a result, those organisations which had been alive to and preparing for those trends are coping with the crisis much better than those that had not. Their strategic thinking over recent years has been vindicated and rewarded.

But the fact that what we might have anticipated over the next 3-5 years has now already happened does not mean we will enter a period of stability. Instead, some of the things that we might have anticipated over the next 5-10 years are now more likely to happen over the next 3-5 years.

So the need to think strategically - to anticipate and prepare for the future; to align decision making and execution around a clearly articulated plan - is as great as ever. Those organisations able to shift some of their attention from survival to strategy sooner will win markets from those who are not.

Which will you be?

How do you solve a problem like remote working?

The great experiment

A collateral consequence of COVID-19 has been the biggest experiment in remote working in human history.

The responses have been interesting. Some people have struggled with remote working and can't wait for things to return to 'normal'. That is, to return to their offices or other places of work. Others have thrived and are openly hoping they never have to.

Remote working before COVID-19

But the reality is less either/or than that.

The movement towards flexible working has been growing for some time. For example, in the UK in 2018, of the employed population:

• 7.2% reported working mainly from home.
• 30% reported having worked from home sometimes.

(Source: Office for National Statistics.)

And many people working from an office or from home spent varying amounts of time travelling to and visiting client or supplier sites.

The COVID-19 remote working experience

COVID-19 has brought this growing trend into sharp relief. Many more people have been forced to work from home. And at the same time, those trips to other sites have largely been suspended.

Many have struggled to make this transition. There are a number of reasons for this.

• The transition was sudden and unplanned. People struggled to acquire, set up and learn to use the technology required for remote work.
• Many processes are unsuitable for remote work. In general, organisations which had invested in digitising processes found the transition easier.
• Parents with young children struggled to make the transition to remote working on top of the already difficult transition to remote schooling.
• Not all homes are suitable for remote work. Conducting your video calls from a well-appointed study is one thing. Doing so from a kitchen table where your children are also trying to do their homework is quite another.
• The change comes on top of a number of other stresses. For example, people may be concerned about the health of their friends and family. On top of their work lives, their social lives have also been disrupted.
• Newly remote workers have complained of 'Zoom* fatigue'. That is, the sense that a day spent in video-conference meetings feels more tiring than a day in physical meetings. There are many theories about what could cause this. Some of them relate to the other issues described above rather than to the nature of the meetings themselves.

(* I have used Zoom throughout this post as a shorthand for all video-conference and other remote working solutions. I've done so based on its current popularity. The same could be said of Microsoft Teams, Skype, Google Hangouts, Slack, and a host of other similar solutions.)

Some of these struggles will be temporary. Children will return to school. Other stresses will subside. People will get used to the technology. Processes will improve.

And we know from the long-term remote workers that things like Zoom fatigue are neither permanent nor unavoidable.

We're not all the same after all

An important lesson we have learned from this process is that we are not all the same. Of course, we've always known this. But we've never experienced it as far as remote working is concerned at this scale.

We don't all respond the same way to the challenges and opportunities of remote work. If we adjust for the other impacts of COVID-19 we must conclude that whilst some people perform better in an office environment, others perform better in a more remote environment.

Those that perform better in a remote environment feel more productive, less stressed and more engaged.

But in the past, we've been too focussed on assuming everyone should have the same kind of office environment. We've not made allowances for these differences.

It is tempting to make simplistic assumptions. Such as that remote work suits introverts while in-office work suits extroverts. There may be some truth to that. But humans are complex. Some extroverts seem to be able to satisfy their need for social interaction over Zoom. Other introverts find Zoom to be a poor substitute for physical proximity. More research will be required.

Either way, more choice must be a good thing. Historically, the world has been stacked in favour of those better suited to in-office work. Those who perform better in remote working situations have been forced to:

1. Endure the personal cost of working in an in-office environment in which they were less productive,
   or
2. Restrict themselves to the smaller number of careers and employers where remote work has been more widely accepted.

The COVID-19 remote work experiment opens up the possibility of a better world for work. One in which more people can offer their best regardless of their predisposition for in-office or remote working.

The best of both worlds

To exploit this choice we need to stop thinking of office work 'as it was' versus remote work 'as it was'. We need to build new work practices which combine and improve on the best of both.

For example, we've been able to roll out video conferencing to people working from their homes. We need to provide the same facilities for people returning to their offices at their desks. This may increase the bandwidth demands for office buildings. However, failing to do so will reinforce the historical artificial separations between in-office and remote workers.

The advantages of office environments are well understood. For example:

• Serendipitous conversations around the proverbial water cooler.
• Quick conversations as you pass each other in the corridor.
• Greater awareness of peoples' dispositions. When it's OK to interrupt them and when it's better to wait.
• The creation of social bonds with people even when you're not formally meeting with them.
• Those shared cups of coffee or drinks after work.
• Increased non-verbal communications through body language.
• The role of the commute as a buffer zone between work and home life.

However, there are equally many benefits of remote working. For example:

• Fewer interruptions.
• Better work-life-balance as a result of less time spent commuting.
• Less time and money wasted by travelling between meetings.
• The ability to hire the best person for the job; not just the best person for the job who just happens to live near your office or is willing to relocate.
• Greater opportunities for people with certain types of disabilities.
• A reduced environmental footprint.

We should not simply trade off one set of advantages against the other. We should look for new and innovative practices which deliver different combinations of both. And we should think of remote and in-office work as existing on a continuum, rather than as alternatives.

A chance to fix some long-standing problems

In my experience, most organisation recognise that they have a 'toxic' meeting culture. That typically translates to some or all of:

• Too many meetings.
• Poorly structured or absent agendas.
• Inadequate preparation.
• Too many and/or the wrong attendees.
• Poorly chaired meetings.
• Meetings dominated by the most senior and/or loudest voices rather than those best able to contribute.
• No clear outcomes.

'Board effectiveness reviews' have improved the meetings at the tops of some organisations. But these improvements have not permeated most organisations.

Simply moving existing bad meeting practices onto Zoom was doomed to failure. We need new approaches. Some interesting ideas have been put forward:

• Silent meetings
• Holacracy tactical and governance meetings
• Tools like Lucid Meetings

We need to explore, adopt and adapt these to the new, more flexible organisations we create.

Reframing the question

Instead of asking

• Should we return to the office or stay at home once restrictions are lifted?

we should rather be asking

• What have we learned about our operations and working practices during this crisis?
• How do we move forward in more effective and resilient ways?

The answers to these questions may be different for each organisation. But they will have far-reaching consequences.

I've heard many people say "I wouldn't want to be in commercial real estate right now". Will future organisations still want as many flagship head-offices in prestigious locations? Will those that do still want them to house as many of their workers?

We can start to imagine a world in which:

• more people work from home some or all of the time;
• those who want or need to go to an office work from shared regional hubs closer to where they live;
• hot-desking becomes more prevalent as location becomes more fluid;
• businesses with high-street presences revitalise those by letting them double up as remote work locations. (I understand banks are looking at this as an option for the flagging branch networks.)

Transportation and hospitality will likewise be impacted if business travel declines. This could be because there is less need for business travel and because the current pandemic has made people more afraid to do so. And a range of other businesses, such as inner-city sandwich shops, will be impacted.

But for most organisations, the opportunities for change will far outweigh the challenges in terms of:

• improved effectiveness,
• improved resilience,
• reduced costs, and
• increased diversity.

Opportunity amidst disaster

The COVID-19 pandemic has been a human tragedy. The cost in human lives and the impact on families and frontline workers have been immense.

But the second-order disruption creates an opportunity to build a better world. For how we work as well as in other spheres of life. Let's seize that opportunity with both hands.

Should business strategists have foreseen COVID-19?

The answer is: Yes.

But the aim of this article is not to lament what we should have done. Nor is it to crow about what we did do. Instead, it is to consider what we should do going forward.

One of the roles of strategy is to help businesses to be successful into the future. And we must do so for whatever the future brings. When something like COVID-19 comes along, we can't simply excuse ourselves for not having prepared for that future.

Now, I am not suggesting that any business strategist should have predicted exactly what happened.

For example:

• that a virus would emerge from Wuhan in late 2019/early 2020,
• that it would evolve into a pandemic and shut large parts of the world down,
• that it would overburden most countries healthcare systems, and
• that government would respond by locking their populations and economies down.

What could we have foreseen?

But there are many aspects of COVID-19 which were easy to foresee. These include, for example:

• a pandemic,
• a global economic downturn,
• the failure of stretched and global supply chains, and
• remote working.

These are things we've talked about in the past at length. We've even experienced these before. Perhaps not in our own lifetimes. And of course, each time they happen they're different.

We've had pandemics in the past. (You can click on the chart to the right to see it in more detail.) This 2015 Ted Talk by Bill Gates is one of many warnings of what future pandemics might be like. And we've long been aware of emerging strains on our health care systems posed by things like:

• population ageing and
• antibiotic-resistant diseases.

Likewise, we've had global economic downturns in the past. Arguable, as recently as 2008. Some argue that this one will be deeper and longer than any we've encountered to date. But even so. that possibility is not hard to imagine.

We've been worried about the impact of globalisation. Be that on the distribution of wealth or on the environment. We've also worried about possible disruptions to stretched global supply chains. Even if that concern was more fueled by concerns over a trade war between the US and China than by concerns of a pandemic.

And we've been debating the pros and cons of flexible and remote working for years. Until now, the status quo has conspired against them. However, in London, for example, the Olympics (see here), as well as numerous train strikes, have offered regular glimpses of the need for greater flexibility.

Our job as strategists is not to be experts in all of these fields. But we should be aware enough of the possibilities to help our organisations to understand and prepare for the specific consequences they might bring.

What should we do?

There are three steps to be prepared:

1. Be aware.
   
   The first step is to be aware. If we're not watching those Ted Talks, studying that macro-analysis or reading those risk reports then we won't know what's out there.
   
   
2. Consider the impacts.
   
   Then we need to consider the impacts these things might have on our businesses. Each business is unique. And the so the impacts on each business will be different.
   
   Consider, for example, how different the impacts of COVID-19 have been on hotels, airlines, restaurants and the highstreet, contrasted against the impacts on firms like Amazon, Ocado and Zoom.
   
   
3. Integrate this analysis into our planning and execution processes.
   
   If our planning processes amount to simple extrapolations of last year's budget into next year's budget. COVID-19 highlights the significant uncertainties we face. And this underpins the importance of integrating scenario-based analysis and planning. (See: Scenario Planning for Business Strategy).
   
   Once the planning is complete, the results need to be built into your execution processes. Early warning systems need to be put in place. Responses need to be rehearsed. Capacity for rapid change needs to be built.

What are the challenges?

Typical short-comings I have encountered in trying to achieve this include:

1. Fatalism: Decision-makers conclude they can't predict or avoid crises. They call them 'black swans' and place them outside the bounds of normal logic. As a result, they can't or don't know how to prepare for them. Ultimately, they conclude that they're better off just ignoring the possibility.
   
   It's true that you might not be able to guarantee that the Titanic would be unsinkable. But you could make sure she carried enough life-boats.
   
   
2. Theorism: Decision-makers engage in the analysis. But this fails to progress beyond being an "interesting exercise". Once it is complete, everyone goes back to their desks and carries on as before.
   
   The only thing worse than facing a crisis with your head buried in the sand is facing it with your eyes wide open and in the full knowledge that you failed to prepare.
   
   
3. Optimism Bias: This is the expectations that whilst bad things do happen, they won't happen to me. The best time to repair your roof is when the sun is shining. But that's also the time when the need to do so seems less pressing.
   
   When times are good, we fail to prepare for when they are not. And by the time they are not, it is often too late. Running cash reserves and building redundancy into your processes and supply chain seems like an unnecessary waste during the boom years.

We don't know how and when the COVID-19 crisis will end. So far, most businesses have been very reactive. Just trying to survive. But sooner or later* businesses need to start looking forward and preparing to succeed in the future. Whatever that may be.

*I would strongly suggest sooner.