Digital Intent, a digital innovation consulting firm, analyzed recent data finding that only 12% of U.S. based companies are well positioned for resilience.
Credit risky companies made up 33% of the surveyed companies. These may have credit issues or difficulty refinancing debt. Frugals, or 36% of companies, historically generate strong return on assets. Growth Innovators, are the strongest category but only make up 12% of companies. These have proven historically that they can generate strong return on assets while investing in their future to reinvent their asset base and stay relevant in the midst of changing trends and markets.
Based on this research, experts at Digital Intent recommend the following eight guiding principles to help companies become growth innovators and not only survive – but thrive – during a crisis:
- Invest When Others Can’t: Not all executives use their investment capacity. One of the core components of success is understanding the company’s history of investment results and its current capacity. It is a competitive advantage to complete this analysis now, during the pandemic
- Cut the Right Costs by Getting to the Root Cause of the Expense: Often times companies cut costs from the wrong areas and hinder their growth prospects. Instead of lowering costs by cutting across the board, complete an analysis to understand the cost drivers and value drivers in the business
- Move Beyond Digital: It is crucial to complete a fundamental examination of a company’s value chain with a view on how virtualization will impact core costs and customer value.
- Automate your Way to New Business Models: The creation of new business models that employ automation in new ways, such as those grounded in AI, 5G, and augmented reality, should be considered when creating a new platform for transformation.
- Use Vendors to Drive Down Total Cost and Variable Costs: The progress of cloud capabilities can help take what were once fixed costs and make them variable costs, resulting in a huge economic scale.
- Identify Customers to Grow With: Customer selection at any time is vital to growth, and now it is more acute than ever. It is important to understand new customer behaviors that redefine their needs and make sure your company is serving those needs.
- Optimize the Marketing Mix: Advertising and marketing spend are often the first areas where firms cut when facing difficulty. A downturn is an especially good time to look for new, efficient marketing methods, such as social media, keeping in mind creative design, economic focus and technical execution.
- Expand the Portfolio, Then Focus for Momentum: There are many reasons to do fewer things well when focusing on growth, such as innovation, talent and accountability.
Read the full release here.