20200427 h&z - on the way to new normal · 20200427 h&z -on the way to new normal...

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Munich, April 27, 2020

On the way to new normal

h&z - On the way to new normal _v1.0.pptx

Corona situation: VUCA is reality

COVID-19 crisis has driven us into a truly VUCA world

§ COVID-19 has caused unprecedented disruption and will be leading to an economic recession in most of our industries

§ It will impact organizations in a multitude of ways and will send most of us in survival mode for the shut down time

§ It‘s not clear when, but at one stage the race will restart

§ You will need to adapt to the new normal, but you will also become the chance to re-write the game and boost new ways of business

§ This is the time when you will need all your hands to recover, your head to set a strategy that makes you a winner in your industry and your heart to take along your people

§ And, we all will need to go beyond our organizational boundaries to create an ecosystem that makes us more resilient in the future


h&z point of view on COVID-19 effects

The COVID-19 crisis has a significant impact on our businesses worldwide – the “new normal“ will be vastly different from what we have seen in the past

V - Shape L - ShapeU - Shape

Vaccination (earliest Q1/21)

Medication (unpredictive)

§ Significant slow down of real economy

§ Jobs will be as much as possible secured by governmental support

§ Rightsizing to new normal in many sectors

§ Strategic rethinking needed

§ Relapse as an option to be taken into account

§ Significant mid-term damage

§ Slow progression towards lower long-term growth

Game changerKey impactConsequences


Five areas are particularly affected

Most industries are affected by COVID-19 from multiple angels

§ Work force needs

distancing

conditions

§ Travel restricted,

collaboration

changed and new

ways of working

§ Supply at risk as

value chains are

intersected

§ Suppliers struggle

and need support

§ Financial stress

drives business

pulse to minimum

§ Cash and liquidity

management

becomes key

Value Chain FinanceBusiness

Mgmt.People

§ Uncertainty makes

planning to a

challenge

§ Business continuity

under stress

Value Chain

§ Highly reduced

customer demand –

now and for a long

time

§ Physical sales

channels are in

harm

Customer

Demand


Impact on different industries

COVID-19 impact differs significantly by industry

Negative impact Positive impact

Value Chain

Finance BusinessMgmt.

People CustomerDemand

Aerospace

Aerospace§ Significant reduction in demand throughout the entire supply

§ Financial stress especially for Airlines and tier 2/3 suppliers – in some areas oversupply

Engineered Goods§ Reduced customer demand and outlook – supply chain in danger

§ Work force in isolation and needs distancing solution to come back

Financial Services Provider§ Physical channel significantly harmed – work force needs distancing

§ Low interest rates will be locked in and will impact the business model

TelCo Provider§ Shift from physical to digital sales & service channels: Demand rising due to

significant rise in mobile work force

§ Chance to enlarge customer basis

Engineered Goods

FinancialServices

TelCoProvider

Impacted areas per industry


There is not one road to the new normal! Agility, constant adoption and re-evaluation are key to sustained success

Operational & strategic realignment to establish a more risk-resilient structure

Quickly calibrate operative processes and right-size your company

Purpose to make a positive contribution to society

Crisis Mode

RE/FORM

OUT/PERFORM

RE/COVERSURVIVE PRE/PARE

RE/COVER is key on the way to new normal, but will not be enough

In combination with a strategic OUT/PERFORM you have a chance to win

Future state

Alternative scenariosdepending on industryand company specifics

Way to new normal


Phases description

For each recovery phase there are concrete fields of action that need to be considered in order to succeed

§ Plan strategic scenarios

§ Define the operational focus of the ramp-up

§ Establish agile management processes

§ Staffing of recovery & strategy team

§ Ensure safety of employees during and after Corona limitations

PRE/PARE

Develop a plan for recovery

§ Sales push in most promising areas

§ Ensure supply and manage suppliers at risk

§ Adapt business to "new normal" volume

§ Secure financing during ramp-up

§ Leverage short-term supply and demand opportunities

§ Agile management and keep cost tight

RE/COVER

Recover operational performance

§ Identify strategic opportunities to win market share in your industry

§ Adopt customer experience to new customer needs

§ Leverage mobile working as a continued benefit

§ Improve resilience in critical areas

§ Empowerment of Teams-of-Teams management

OUT/PERFORM

Strategize to win

§ Organizational war rooms for immediate crisis response

§ Manage cash flow and working capital

§ Comprehensive communication plans

§ Ensure business continuity, financial stability

SURVIVE

Adapt to crisis and manage

§ Create a sustainable eco-system

§ Contribute with your company purpose to the prosperity and development of your business sector

§ Ensure you are a best place to work with your stake in the overall organizational social contract

RE/FORM

Create value beyond financial metrics

Note: Phases will overlap

CRISIS MODE NEW NORMAL FUTURE

STATE


Key questions for your consideration

In all five focus areas across all phases we see particular challenges that need to be addressed

Pre/Pare Re/Cover Out/Perform Re/Form§ What overarching scenarios to develop?§ Where am I particularly affected? Where does

the shoe pinch the most?§ What is the operational focus of the ramp-up?§ What does this mean business plan wise?§ How to staff recovery & strategy team?

§ What is the best steering model to manage during uncertainty?

§ Which KPIs to use to navigate through recovery?

§ With whom and how must I communicate (banks, customers, employees, suppliers)?

§ What can we strategically learn from the crisis?§ How to become permanently faster and more

adaptable? (VUCA4Real, Teams-of-Teams)§ What areas need strategic adjustment?§ What are the strategic winners to gain market

share now?

§ Do we need to adjust our purpose to still be meaningful and relevant?

§ How to set open mindsets for future opportunities and business growth?

§ How to contribute to society to be better prepared next time?

Business Mgmt.

§ How do I segment customers?§ Which customer are most promising?§ Which scenarios to plan the sales ramp-up?§ How is regional demand varying?§ Which products to ramp-up first?

§ What is the best approach towards customers? § Which sales push measures are most

effective?§ What products to select for fast sales?§ What are priorities for quantity allocation?§ How to electrify the whole sales team?

§ Have customer needs changed?§ How do we best adapt customer journeys for a

strategic benefit? § Where are white spots to be leveraged?§ Need for new products/service and how to

bring them to the market as fast as possible?

§ Is our purpose still a competitive advantage in the new market?

§ How can we secure a sustainable business together with our customers?Customer

Demand

§ Which macro scenario to focus on? § Where do we have most supply problems?§ In which spend areas do we have opportunities§ What quantities to plan considering stock, WIP,

take, move, produce?§ How to plan the step-by-step ramp-up?

§ What quantities do we need now and urgently? § How do I adapt my production lines according

to the demand scenarios?§ How to secure supply, back-ups?§ Where can we short-term reduce cost and

minimize external spending?

§ How to adapt the whole value chain be more flexible in the future?

§ How to secure strategic supply? § How to re-shift the supplier portfolio and work

with strategic partner in the future? § How to improve our competitive advantage?

§ How do we make the n-tier value chain more resilient?

§ What business eco-system is needed in the future?

Value Chain

§ For how long is financing secured?§ How to adjust budgets to new normal?§ How to reduce fixed costs in short term?§ How to secure cash?§ Where do we have WC improvement areas?

§ How to secure financing in the ramp-up phase?§ How to decide which planned investments to

make/not to make and when?§ How to implement all short-term NWC

optimizations?

§ Where to optimize fixed cost structures – what to keep, where to switch to variable cost?

§ Are there business models which could strengthen our financial management?

§ Where to clean up the business portfolio?§ How to streamline expand the portfolio?

§ How can our sector be strengthened financiallyin the future?

§ How can funds and aid be released quickly?Financials

§ Which teams to staff and ramp-up first?§ How do I get my (production) teams up and

running again?§ What can be a solution for work distancing?§ Where are areas where we can continue to

leverage mobile working

§ How to organize my working teams?§ How to best protect my employees - do I need

new infrastructure/working models?§ How to overcome the fear of changing work?§ How and what to communicate to my

employees?

§ Which digital working models to be adopted for the future?- Mix of on- and offsite- Remote capability

§ How to virtually lead, motivate and inspire?

§ How can jobs be sustainably secured in the future?

§ How to adjust our social organizational contract?

§ How to attract the best talent?People


Across all phases there are key elements to focus efforts on

Selected good practice tactics

§ Be faster than the competition in leveraging client opportunities

§ Adapted customer

journey to new situation

§ Increase customer analytics

§ Ensure safety of employees

§ Continued leverage of mobile working

§ Review global

organization facing new challenges (size, skills, structure)

§ S&OP based on demand analytics scenarios

§ Proactively manage supply shortages

across all tiers

§ Leverage procurement cost optimization opportunities

§ Right-sizing value chain

§ Clean-up areas you always wanted to clean up

§ Reduce fixed costs with flexible cost

structure

§ Improve portfolio and leverage M&A opportunities

§ Re-assess and navigate with much higher agility

§ Transform to connected

organization with teams-of-teams structure

§ Act fast in strategic areas to win

Value Chain FinanceBusiness

Mgmt.People

Customer Demand


Navigator: Recurring assessment & steering logic

Through recurring assessment, relevant fields of action are identified, and immediate measures are derived to navigate the way forward

Objectives§ Analyze current status quo of your organization and departments

regarding the five focus areas: Business management, value chain, customer demand, people and finance

§ Identify core business areas to define actions and measures§ Guidance through recovery and outperformance on the way to new normal

Set-up§ Navigator for leadership team and key stakeholders§ Recurring evaluation and regular update of the action plans§ Ensure agility throughout the whole process

Plan to navigate to the "new normal" together

§ Establish recurring assessment & steering

§ Overall transformation to a more resilient company

Improve performance and leverage opportunities

Define precise measures with your functional leaders in their respective areas, e.g.

§ Sales Push§ Cost improvement

§ Supply chain stabilization§ Adopt channels and customer

experience

Engage in an entrepreneurial collaboration

§ Tap into the potential of your entire organization

We are looking forward to support you with head, heart and hand

What else would you like to discuss?

20200427 h&z - on the way to new normal · 20200427 h&z -on the way to new normal...

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