COVID-19’s impacts are felt across a wide swath of companies, from Fortune 100 firms to mom-and-pop small businesses. According to a study from economists at the University of Illinois, Harvard Business School, Harvard University, and the University of Chicago, about two percent of small U.S. businesses closed permanently due to the COVID-19 related lockdowns and economic conditions.
The pandemic is a reset button that forces every company to overcome a new status quo. The post COVID-19 landscape is therefore an ideal time for startups, as well as for ready-made solutions that can take firms of any size to the next level. Once a post COVID-19 period begins, companies are all at the same starting line to win the customer experience race. But the speed of the contest will require extreme agility and far reaching capabilities.
There are several impediments to the rapid change necessary for post COVID-19 success. They include a focus on mere survival instead of finding a path forward for growth. Companies hit hard by the pandemic, of course, need to manage costs, focus on safety, and stay in business. But they also must find growth lanes and have some willingness to spend and increase risk tolerance to reach their goals. Firms need to put together new types of teams to learn how to grow in ways that are different. They also must fully invest in cloud-based tools (hello, Zoom meetings), know how to use them, and most of all, apply these tools to the customer’s experience.
The scope of challenges mandates that companies both big and small must embrace change. This action means working together collaboratively, so all sides can come out of the pandemic nimbler and stronger.
Large Firms Need the Little Guys
How can bigger firms digitally transform their businesses to keep up and overcome the myriad of challenges for growth? They need the “little guy” to step in by helping add order to a highly disorganized situation.
Why are the smaller players necessary for the survival of the “big guys?” For several reasons, chief among them is compressed cycles, where innovation must occur at a much faster pace for a company to stay relevant. With customer sentiment changing on a dime, it is imperative that new products and innovation happen faster. Bigger firms, due to sheer size, are unable to innovate fast enough on their own in a way that makes sense for dramatically shifting customer behaviors and needs. They need help from their expanded group of business connections and especially require assistance from smaller, more adaptive companies.
According to a study from McKinsey & Co., larger firms that do not invest enough in innovation face dire consequences. The study provided the examples found in fintech, where traditional banks are struggling to match new technologies through either their own efforts or acquisition. McKinsey & Co. found banks typically allocate only 35% of their IT budgets to innovation, compared to fintech firms which spend 70%, underscoring the competitive edge the smaller firms have for discovering breakthroughs and streamlining processes. This example extends beyond banking to any industry where bigger players have neglected the customer experience and improvement through innovation.
To succeed under a new reality and move forward with growth, business professionals from large and small firms will need to broaden their outreach.
Leveraging the Business Ecosystem
To accelerate growth and find new opportunities after COVID-19, companies of all sizes must focus on their entire “ecosystem.” In this context, their “ecosystem” is the entirety of people involved with a business, from partners to prospects, customers, and vendors. So, everyone from a firm’s accountant and lawyer to their strategic partner and list of top 100 customers are all part of a group that deserves attention and interconnected engagement.
A new platform squarely focused on ecosystem investing is DealRockit. The company has been referred to as “LinkedIn on steroids,” a platform for connections designed to create virtuous cycles for businesses of any size. As an example of the platform’s mechanics, consider the SaaS market, specifically companies that sell software into the professional services markets. A SaaS firm offering a platform to law firms, accountants, and similar entities could greatly expand its business reach by connecting with its entire ecosystem. Insurance carriers, financial institutions, and other larger entities can easily do the same. They could utilize DealRockit to invite their prospects, customers, partners, and other related people into a single space, to spur new deals and broader connections — creating a virtuous cycle where everyone wins.
DealRockit and other platforms that encourage broader collaboration work well because they combine smooth technological and critical human elements together. After the pandemic wanes, this type of connectivity will prove essential for big and small business players alike, as firms strive for revenue while also pushing to become forces for good.
The Way Forward
Moving past COVID-19 requires new ways of thinking. Not just about the impacts of social distancing and virtual services but shifting the ways businesses interact with each other. Achieving growth and prosperity during this time will require large and small firms to invest in their ecosystems together. If they succeed, they’ll pull economies back from disaster and open new avenues for unprecedented innovation and human success.