BLOG POST by Neil Bansal

Transformation amidst Covid: An introductory perspective from Coppertree Partners

Covid-19 has accelerated and heightened the level of corporate change and disruption. While I believe this time to be unprecedented in its depth and amount of human suffering, most of my professional work has been in backdrops of constant change and uncertainty. As a management consultant with McKinsey & Company I worked closely with companies during the height of the financial crisis when strategies had to be hastily rewritten. Where successful companies had to make painful choices to massively cut costs by divesting businesses, outsourcing operations and laying off staff while also deciding where to invest limited resources towards innovation and growth. Later at JP Morgan I helped the bank during a severe mortgage crisis, leading efforts to redesign their operating model and stem the backlog of loans that were crippling the system. Over the past six years at BNP Paribas I built capabilities and led large scale transformation efforts to help the bank fundamentally compete against the larger American banks in the US. Regulatory pressures and cost constraints meant making difficult tradeoffs and stronger focus on digital transformation, governance and risk management.

I founded Coppertree Partners because I am passionate about helping companies grow their business, manage through change, and bring real value to their customers, employees and society at large. I bring a unique perspective to the table over the past 20 years as someone who has led strategy and transformation both inside complex and diversified organizations as well as on the outside as an advisor. I know what it takes to deliver end-to-end impact that is sustainable and scalable in industries such as financial services, consumer/retail, technology and healthcare. I’ve also seen the headwinds and challenges of enacting change and the consequences of missed opportunities or poorly delivered programs. 

The news today is replete with companies struggling to survive or even filing for bankruptcy – names like Neiman Marcus, JC Penney, and Hertz are among the more recent headlines. While this trend has obviously been accelerated due to covid-19, it’s part of an ongoing phenomenon and truth: companies are dying out sooner than ever. In the 1950s the average lifespan of an S&P 500 company was over 60 years. Today it’s under 20 years and continuing to shrink. Some have speculated that three-fourths of companies in the index won’t be around in the next 7 years. How did so many lull themselves into complacency and what can companies do to avoid this fate? How can smaller firms rise up and replace those fallen stars? It will take extraordinary leadership to survive and thrive amidst even further advances in technology, continued population growth and shifting consumer preferences.  

I leave you here with five suggestions to avoid the pitfalls and mistakes I repeatedly see.  Being mindful of these will hopefully help those of you bravely disrupting, transforming and leading organizations – whether it’s on the inside or out.

Listen to signals of disruption – it’s closer than you think

It’s well known that change is happening faster than ever – you don’t need this post to tell you that! But despite how this is well accepted companies routinely miss the signs of disruption – underestimating how close it is and who might be around the corner delivering it. For instance financial services firms shouldn’t underestimate the ambitions of Amazon. Even though it has struggled to get a foothold in the lending market, it has a strong track record of improving upon its businesses and being a resilient and disciplined disruptor. Regulations may help like the UK’s “open banking” (PSD2) directive that forces banks to allow access to consumers’ banking information with their permission. This could enhance Amazon’s ability to make credit-worthy decisions. Executives should ask themselves how much time they spend analyzing and preparing for disruption. Digital tools and technology will continue to grow in this area to help analyze adjacent industry disruption, activities of startups, customer effort scores, etc.

Promote a culture of psychological safety and challenge

Leading firms know it’s best to disrupt your own business from a position of strength. There are many well-known examples in this space like Netflix which upended its DVD by mail business to embrace streaming even before Internet bandwidth exploded and followed up by investing in original content with the release of “House of Cards”. It’s critical for companies to create a culture where people feel the psychological safety to speak up when there are issues, challenge the status quo and provide ideas for change. I recall a time helping a financial institution that was having trouble onboarding clients. I ended up interviewing members of the team doing the work and was so impressed by how well they knew the details of their work and what it would take to fix it. I started wondering why I had been brought in! But the issue was nobody wanted to speak up. They were either fatigued by trying before to deaf ears or worse getting tagged by management as creating issues. Given real changes would impact several departments and hence be very political, it was easy to see how inertia and the old ways of working continued to prevail.

Know when to start from scratch and reimagine instead of optimizing what exists

The original iPhone in 2007 was a revolutionary device on many levels – as Steve Jobs at the time put it, “An iPod, a phone, and an Internet communicator” all in one with a screen size double any other phone on the market and a virtual keyboard instead of real buttons. It was so revolutionary that Google had to completely revamp and start over on their secret Android product under development at that time. More recently Apple’s releases of iPhones have been more incremental improvements vs. wholesale changes with innovation focused in other areas such as the highly successful wireless AirPods and Watch. Apple has been purposeful in its innovation strategy and approach but too often underperforming companies are anchored and influenced by the past. They set budgets largely with small variations from last year instead of starting from a zero-base and arguing why costs should come back in. They optimize products and processes based on how they look today and fool themselves into thinking they are revolutionary. Consumers aren’t so easily fooled.

Remember true strategy is about coordination – need to bust the silos

One of my favorite aspects of working with start-up clients is their ability to coordinate quickly and easily. There aren’t a myriad of departments to navigate with their own agendas and metrics. They understand that to deliver an exceptional customer experience you need the end-to-end to come together seamlessly and without friction. An app that looks great to a customer on the front-end can result in a poor experience if it operationally doesn’t deliver to the expectations set by the dazzling visuals and interface. Leading companies are able to identify the experience they want to create for customers and how to integrate all the touchpoints needed to make it happen. 

Help your customers understand what they want and don’t outsource it

Getting intelligence on your customers through observing their behaviors and understanding their needs allows you to create compelling offerings and experiences. I’ve seen however how companies can stray badly from this by assuming customer needs with insufficient data or taking feedback literally but forgetting that many needs are not explained or understood by consumers. Some companies test out products and services but set up focus groups too late to make changes. I remember one client who asked me if I could take a lead on doing a customer needs assessment as the division wanted to better understand its customers. I was so confused by the request as these were current customers rather than research being done on a new set of customers or getting feedback on a minimum viable product. In your personal life if you need to ask others for advice on what gift to buy your spouse or children you likely missed some clues along the way and haven’t been paying attention! The same seems to happen in corporate settings where companies are outsourcing such knowledge of their own customers that should be done by internal teams and is a wake up call that you aren’t collecting the right data to derive insight. 

This was the first of what will be many perspectives and deep dives. Please get in touch with me: neil@coppertreepartners.com if you’d like to discuss opportunities to partner.

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