Crisis response has many forms: Techniques to identify opportunities and mitigate risks

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While it is challenging to focus on strategy during turbulent times, that’s exactly what leading organizations do.

Change is inevitable. From disruptions caused by technology innovation to natural disasters, the ability to accept, understand, and act during change creates opportunities for long-term success.

We would all like to have a crystal ball, but even without one there are still ways to anticipate the impact and scale of disruption on business models. That anticipation can fuel and inform an organization’s strategic decisions. In Capgemini Invent’s Future of Technology Group, we’re generating and assessing ripple effects caused by disruption to help organizations prepare for what’s coming next.

Our approach leverages five techniques to identify opportunity amidst disruptions. To explore these, let’s use the pandemic as an example.

Technique 1: First-principles thinking

A common mistake in prediction is to look at similar situations from the past. It is human instinct to go with something you’re familiar with, so a new virus would be considered to be “like the flu” or “like SARS.” A good prediction, however, would start with an original or fresh assessment of the driving forces behind the change.

For example, the pandemic has three main characteristics that are driving the change:

  1. The speed with which the virus spreads (~25 percent daily growth rate in an unaware population)
  2. The medical impact of the virus (~10 percent require intensive care, ~2–3 percent fatality rate)
  3. The duration until a treatment/vaccine is developed (3–12 months).

We can project these new forces forward into the future and, from there, into the core models and services businesses run on.

Technique 2: The tipping point

As we project the speed of the spread and the medical impact of this new virus into the future, we see that society’s tolerance is soon reached. At this point, society quickly mobilizes and measures are taken to combat and manage the spread.

Technique 3: Key impact areas

Once the first-order consequences start to appear, it is useful to explore which are likely to have a large impact on the way society functions. To predict the impact of the coronavirus, we first must identify which measures are likely to continue. The laws of economics are not suspended, so look for measures that have a relatively positive cost/benefit trade-off. Some of the measures falling into this category could include restrictions on travel, increasing hygiene, and increasing social distancing.

Secondly, we will assess which of these measures has the potential to amplify the way society functions. For example, a decrease in hand shaking is unlikely to have high-impact effects on many business models (aside for immediate products such as gloves and sanitizer). However, a decrease in travel has the potential to be a game changer for many business models.

Technique 4: Picks and shovels

Once we identify our key impact areas, we can look at what is needed to make this possible. Mark Twain is believed to have said “During the gold rush, it’s a good time to be in the pick and shovel business.” Similarly, if large groups of people continue teleworking, you can expect an economy to spring up around this. In the first month, people need better internet connections, good video-conferencing software, and new team-communication software. From there, people may need ergonomic desks, chairs, and monitors. When they realize they’re spending triple the number of waking hours at home, they start to invest a lot more into renovations and dining at home. Long term, there are even more major implications socially, such as engaging virtually with games or shifts to be more effective at home workouts, etc.

Technique 5: Flip side of the coin

Lastly, look for the opposite. As people spend more time working from home, they also spend less time at the office. The immediate consequences of this are obvious: there are fewer desks occupied in the office, and fewer customers frequent the local restaurants. With time, companies feel less need to have the same amount of office space, and restaurants feel less of a need to pay for expensive real estate in the city center. As a result, companies move to smaller or more flexible office spaces, and restaurants focus more on delivery.

Winston Churchill said, “Never let a good crisis go to waste.” The pandemic has had devastating results, and impacted every aspect of our lives, yet still provides insights and opportunities. Generating foresight and understanding the potential business-model implications and likelihoods can be among the most valuable exercises a company can do to determine how to navigate their path with disruptors.

This short preview is an introduction to the technique used by Capgemini Invent’s Future of Technology group as part of our Disruption Radar methodology. Our focus is to help business leaders identify opportunities or risk mitigations arising from emerging disruptions and technologies so they can do more than incremental improvements. With this methodology, they can realign business strategy, considering likely disruptors and future-proofing their operating model.

Our group leverages a collaborative workshop that brings together leading technology and domain experts from Capgemini, paired with your leaders, to assess the impact of emerging waves on your business.

Our process follows a three-step approach:

The final report we create highlights a prioritized list of opportunities and key foresights to help future-proof your business.

Learn more

If you’d like to learn more about our Disruption Radar or Transformation Advisory services, please reach out to Sara Pope directly.

Co-authors:

Andrew Joseph
Managing Consultant
Dr. Roy Van Keulen
Lead Consultant

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