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Imminent structural shifts in business post-Covid-19 16 Jun 2020

Nigerian President Muhammadu Buhari and other state officials holding a virtual meeting of the
Federal Executive Council

A major impact of the Covid-19 pandemic is that it would forever change the way nations, businesses and individuals work. The new normal, as many now refer to the occurring change, will take some time to get used to. But people who are able to adapt quickly will be able to take advantage of the change in the months ahead and make a success of it.
    
There are certain symbolic structural shifts that will take place as a result of this pandemic and we all need to be aware of them. I will like to examine some of them in this article and in my future columns.

We have seen a massive move to online delivery of services, training and even meetings and conferences. This move online will change the structure and nature of competition amongst businesses in the marketplace. The practice of showing off a spanking new office complex building as a sign of business growth and leverage may no longer be fashionable. Online-based competition is going to intensify instead. The mass movement to developing online business models would favour the underdogs. You can operate from your basement or a small corner of your home and still be huge online. Having a strategy that includes designing a good website can place you in a good position to compete with a multinational, resulting in a levelling effect that would drive prosperity.

A clearly designed website and optimised web presence will enable you punch above your offline weight. You can project a bigger, more prosperous image of your business online. The fact that you are operating from your kitchen is not important to value perception. This is a structural shift in business we will begin to see.
    
Most small businesses in Nigeria are mono-territorial in nature. Their customer-bases are those living within the immediate vicinity of the businesses. Most do not even sell outside their local government areas or states. As businesses reinvent themselves post-Covid-19, those that can would leverage technology and have the capability to be trans-territorial. With an online business model, your customers can come from anywhere in the country – and even beyond for that matter. Going big would be easier when you are online than offline. This is also a major structural shift to expect.

With the limitless opportunities the move online could bring, an increase in virtual business transactions would necessitate more electronic payments. Given this expected shift, the days of large amounts of cash-based transactions would be over. This would result in a boom in the use of electronic payment channels. As the use of cash as a medium of exchange diminishes, business models would also adjust to accommodate this structural shift.

Digital and technology skills will become essential competencies that businesses must have. Small businesses can simply buy these skills from specialist firms that will spring up all over the country in the coming months. Access to these competencies is necessary if businesses are to successfully exploit the new reality of the world of business.

Another structural shift in business would be an increase in remote working. This would force a change in the way many businesses manage their staff. The old-fashioned system of managing attendance to work would give way to management by objectives and outcomes. This would allow staff to work from anywhere. In a recent interview, the Director General of the British Broadcasting Corporation (BBC) said that 92 per cent of the broadcaster's staff have been working from home due to the coronavirus pandemic lockdown. Yet, there has been no break in broadcasting and viewers did not notice any difference. This exemplifies the new reality of innovative ways of working that would arise in a post-Covid world.

Nigeria has remained an economy that focuses more on products and related services rather than on intellectual property (IP), even as many other countries have advanced in the knowledge economy driven by IP. Respect for IP is low in Nigeria. But that will have to change because the most successful businesses post-Covid-19 would be those in the knowledge economy. The value and need for intellectual property will become apparent as the knowledge economy and related services flourish. The season of using knowledge to deliver wonders in the marketplace is upon us.
    
Finally, I see a shift in business financial management such that businesses will favour having more liquidity reserves. Covid-19 is a monumental event with far-reaching implications. Many businesses who were living from hand to mouth so to speak have found it very difficult to ride the storm of this pandemic. With banks being tight on lending; many businesses moved from prospering to collapsing in a very short time due to lack of financial reserves.

With no customers, no income, no turnover and no reserve, some businesses have collapsed during this pandemic, while many others have had to restructure their manpower and other operations to stay afloat. The lesson from this is that every business needs some reserves to call on during emergencies. Building business reserves will be prioritised by more businesses in the post-Covid world.

These structural shifts are necessary not only for businesses but also to help the Nigerian economy move on the path of growth more quickly in the months and years to come. The 1918 influenza pandemic, also known as the Spanish flu, provides additional reference point as to the necessity for these shifts. After the 1918 global pandemic, businesses did not shift quickly to adopt to the new realities resulting from the pandemic that continued until the early 1920s. As a result, the collapse of the global economy that followed led to the Great Depression, which began in the United States in the late 1920s.

Organisations in Nigeria cannot just continue with business as usual. That posture will merely prolong the inevitable recession that confronts us as a nation. A recalibration of business models and approaches is needed to enable us to be innovative in tackling the challenges ahead.

In a future article, I will be exploring how this new reality will necessitate a structural shift in how nations, governments and individuals in Africa operate. As the saying goes, “those who do not learn from history are bound to repeat it.” I hope businesses in Nigeria would learn the vital lessons and make needed adjustments or be confined to the back pages of history in a resurgent Africa that I see would come to be in the decades ahead.