Pandemic redraws the map

Economic growth

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Companies have entered a new landscape where the coronavirus has accelerated major paradigm shifts, as I discuss in my latest analysis for ICIS Chemical Business.

2020 is proving to be one of those years when time seems to speed up. The pandemic has been the catalyst for a range of paradigm shifts, which are accelerating the world’s move into the New Normal. As I noted here in June (ICB 28 June), “companies only have two choices – they can either cross their fingers and hope, or they can start thinking ‘out of the box’ about how they will compete in today’s New Normal”.

Of course, all change is uncomfortable. But in reality, these are exciting times. CEOs have the once-in-a-lifetime opportunity to back their judgement and create the basis for major revenue and profit growth over the next decades.

The move into New Normal is not about gaining an extra few points of market share via the introduction of a clever new product or application. It instead creates the opportunity to completely change the basis of competition.  Simply summarising the key paradigm changes  highlights the nature of the opportunity:

■ Energy abundance means that ‘cost-advantaged feedstock’ is no longer critical for success, freeing companies to focus on the opportunities created by changing demand patterns
■ The key opportunity is to gain first-mover advantage by evolving from yesterday’s product focus to tomorrow’s solution orientation, based on deep techno-commercial capability
■ Reshoring is already offering the perfect opportunity to pilot the new skills that will be essential for success, given the fragility of existing supply changes during the pandemic
■ Advanced manufacturing will be key to future success, as digital, continuous and biotech-enabled technology will create a safer, greener, cheaper and more flexible footprint
■ And these paradigm shifts will also enable rapid moves towards a more circular economy, based on new business models that prioritise local rather than global operations

Of course, we all know that dangers lurk all around us for the unwary. The paradigm shifts mean that we are transitioning between the legacy of the past and the opportunities of the future. We therefore cannot ignore the risks created by continuing oil price volatility, geopolitics or even domestic politics such as
Brexit.

But as well as looking over our shoulder, we have to look forward and start to understand the nature of the transformation now underway. Unless, of course, we want to risk being caught in the middle.

All change is uncomfortable, but we also all know it is inevitable. Instead of looking backwards, we now need to develop the leadership skills that will enable us to develop and implement the new business models that will drive our future success.

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