NOW NEXT

Is it time for a course correction?COVID-19:What to do Now, What to do Next

The situation surrounding COVID-19 is rapidly evolving. This presentation should therefore be considered a living document—representative of our view at a point in time.

OUTMANEUVER UNCERTAINTY

As the impact of COVID-19 continues to be felt, many businesses have started their journey to recovery. Despite positive signs in some economies, the situation is very different in others.

In a matter of weeks, the landscape has changed. The pandemic is re-emerging in many places and has yet to reach its peak in much of the world. Meanwhile, societal and political responses have evolved.

The steps for reopening and reinventing businesses remain unchanged, but companies need to continually correct their course. That means reassessing assumptions, re-evaluating scenarios and strengthening their ability to predict and respond during prolonged periods of uncertainty.

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OUTMANEUVER UNCERTAINTY

Cross-currents on the journeyIn those economies that have loosened COVID-19 restrictions, many businesses have started to reopen in earnest and consumer spending has rebounded quicker than expected―even if some service sectors remain subdued 1.

As the landscape of the pandemic and its consequences changes, the assumptions that companies initially used to shape scenarios and set their strategic course are now in question.

Companies are reevaluating how the pandemic’s progress, strength or recurrence in different geographic markets is impacting their recovery strategies.

Now that restrictions are less stringent in many places and social distancing measures have become part of day-to-day operations, companies are moving from a period of compliance to one of choice and individual responsibility. And, as governments shift from emergency support to economic recovery strategies, the change in the fiscal environment poses new risks and opportunities.

Sources: 1 Opportunity Insights Economic Tracker, Data from Affinity Solutions, FT2 Accenture PoV on COVID-19: 5 priorities to help reopen and reinvent your business , May 2020 ; 3 Accenture CEO Surveys

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In May, we highlighted the steps that companies could take to reinvent themselves as they reopened2.

Many organizations are seizing the opportunity to build competencies that will help them emerge stronger―to be more digital, data-driven and in the cloud; to have more agile operations and variable cost structures; to deliver greater experiences for workers and customers.

64% of the C-suite executives we surveyed have already launched initiatives to adjust to the post-COVID reality3. But as circumstances have evolved, companies now face a set of potential cross-currents on their journey to recovery.

https://tracktherecovery.org/https://www.ft.com/content/5acb0cd8-878e-4fff-a45d-4c54328ed866https://www.accenture.com/gb-en/about/company/coronavirus-reopen-and-reinvent-your-business

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As companies moved to reopen and reinvent2, they embraced “no regret” strategies, appropriate in every scenario

This has led companies to focus on strategies in these areas:

Our research found that companies wished they were further along in building the business capabilities they need to differentiate in today’s disrupted world, using “no regret” strategies that include:

• Being more digital, data driven and, in the cloud

The pandemic has heightened the urgency for companies to scale their digital foundations. Our 2019 research measured differences in digital technology adoption and found that the leaders (top 10%) grow revenue at 2x the rate of the laggards (bottom 25%).4

• Establishing a variable cost structure for their operations• Having stronger, more integrated ecommerce capabilities• Using more automation and AI • Adopting collaboration tools• Access to modern, resilient and faster IT without legacy IT debt

Digital Customer Engagement

Technology-Powered Business Transformation

Cloud Transformation

Finance Transformation

Digital Commerce

HR and Workforce Transformation

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Opening also requires scenario-specific strategies and a journey with continual course corrections.

Raise global-local dexterity while hedging your bets.Adjust for multiple speeds of recovery and put mitigating strategies in place for all eventualities.

Keep human needs at the heart of your choices. Prepare for a phase of individual choice over government policy to strengthen trust.

Reposition for recovery not relief.Actively shape your future.

Companies must chart their bearings and course correct on a continual basis.

03. 01. Journey to recovery and reinvention

02. Critical cross-currents

03. Course corrections

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Where reopening is under way, there have been mixed signs of recovery

Countries are reopening in earnest, with all major economies loosening their restrictions since April5. Movement to places of work, retail stores and recreation spaces has increased in tandem, as has consumer spending.In the US, for example, consumer credit and debit spending was just 6% down in mid-July from January, having bottomed out at -33% on March 30th.

The uptick is not equal in all sectors, however. While we’re seeing surges in sectors like retail, activity in labor-intensive sectors like tourism and hospitality are expected to remain subdued, with spending on entertainment and recreation, for example, still down c48% from January.6

South Korea

Brazil

Germany

USA

South Africa

IndiaUK

Movement to retail stores and recreation spaces has steadily increased

Source: Data on loosening of restrictions is from Oxford COVID-19 Government Response Tracker. Data on US consumer spending is from Opportunity Insights Economic Tracker as of 1st July. Andrew Haldane gave a speech on 30 June. Mobility data is from Google COVID-10 Community Mobility Reports. Weekly average compared with decline from baseline. The baseline day is the median value from the 5-week period Jan 3 – Feb 6, 2020.

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20 Mar 24 Apr 22 May 17 Jul26 Jun

https://www.bsg.ox.ac.uk/research/research-projects/coronavirus-government-response-trackerhttps://tracktherecovery.org/https://www.bankofengland.co.uk/-/media/boe/files/speech/2020/the-second-quarter-speech-by-andy-haldane.pdf?la=en&hash=3B82F9C046B7BCDA160AE8BE558B1EB58CFF21EBhttps://www.google.com/covid19/mobility/

Companies are charting their journey to a post-COVID-19 world

Post-COVID-19 WorldLockdown

From responding to the immediate challenges… …to building the next generation enterprise

Talent & organization

Ensure the safety of the workforce, enable remote working and redeploy to critical areas of demand.

Rethink how to form teams to drive innovation and growth, redesign performance management to reward collaboration over competition, anddrive trust through supportive leadership behaviors.

Customers & channels

Reactivate and retain customers using a segmented approach, rapidly scaling digital channels, services and remote sales teams.

Understand and align to the new shape of demand, redefining omnichannel, products and services to win in the new reality.

Supply chain & operations

Address critical pinch points in supply chains without tying up capital, using automation to minimize human-to-human contact and analytics to optimize inventory.

Increase the resilience of the end-to-end supply chain.

SystemsEnhance scalable technical architecture, making costs variable, wherever possible, to meet demand.

Develop a new technology platform, accelerating the adoption of cloud and automation technologies.

Liquidity & finance

Manage liquidity and net working capital and reduce costs across the organization.

Optimize the portfolio through divestitures and M&A.

Vary cost structures in tune with the new demand environment.

C-SUITE SURVEYED 8

74% plan to completely rethink their processes and operating models to be more resilient.

92% are accelerating investments in digital transformation.

87% are acting on opportunities to acquire insolvent firms, intellectual property or talent.

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03. 01. Journey to recovery and reinvention

02. Critical cross-currents

03. Course corrections

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In March, many companies used scenarios to set their strategic courseThese strategic courses required assumptions to be made, which underpinned decision-making.

In Rapid Remission, we assumed effective government measures would contain the outbreak with cases subsequently kept close to zero, while also leading to a V-shaped recovery.

In Flattened Curve, we assumed longer periods of lockdown, with growth taking longer to resume resulting in a U-shaped recovery.

In Cyclical Outbreaks, we assumed multiple outbreaks due to waning adherence to containment measures, resulting in the reinstitution of lockdowns and a W-shaped recovery.

In Prolonged Wave, we assumed measures would be ineffective at suppressing the outbreak and reviving the economy, with an L-shaped recovery ensuing.

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+

SOCIETALRESPONSE

+ -DISEASE PROGRESSION

01. Rapid RemissionOutbreaks are rapidly contained with cases then kept close to zero.

02. Flattened CurveGradual lift of lockdowns, with track & trace, keeps cases at moderate level.

03. Cyclical OutbreaksChronic COVID-19 outbreaks due to uncooperative elements.

04. Prolonged WaveNon-compliance on two fronts, leading to uncontrolled transmission.

Properties of the Virus/Disease vs.Remedy (public health response)

Government,people,

& business

Q2 Q1 Q2 Q3 Q4‘21‘20

New cases

Economic loss

Q2 Q4 Q1 Q3 Q4‘21‘20

Q4 Q2

Q2 Q4 Q1 Q2 Q3 Q4‘21‘20

Q2 Q4 Q1 Q2 Q3 Q4‘21‘20

Q3 Q3

Q3Q3

Four potential scenarios for the evolution of the crisis

Sources: Accenture Research analysis. Numbers of new cases and levels of economic loss are for indicative purposes only.

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In July, executives from most industries were broadly positive about the prospects for recoveryIn our global survey of C-level executives in July, 67% told us they believe their North American markets will see either a V-shaped or U-shaped recovery, consistent with our Rapid Remission and Flattened Curve scenarios.

The highest proportion of executives—45%―expected a U-shaped (Flattened Curve) recovery, the most common response in all industries.

A more pessimistic sentiment was expressed in sectors where demand has been more severely impacted.

Executives from airline, travel and transport, for example, where demand was still close to 50% down in the US at the end of June, were most likely to expect an L-shaped recovery.

Accenture CXO global survey, July 2020, n = 700. Data on demand in travel & transport from

Consumer goods

Retail

Energy

Banking

Communications & Media

Utilities

Life Sciences

Insurance

High tech

Automotive

Chemicals

Industrial Goods & Equipment

Airline, Travel & Transport

Total

Software & Platforms

What type of recovery do you expect in your industry in North America, in the next 12 months?U-shaped V-shaped W-shaped L-shaped N/A — Increase in demand from C-19

64%

60%

55%

55%

52%

50%

42%

41%

40%

39%

36%

35%

33%

30%

45%

14%

12%

7%

15%

23%

25%

33%

27%

20%

19%

29%

28%

30%

18%

22%

14%

24%

31%

17%

13%

13%

22%

29%

31%

35%

33%

30%

30%

25%

25%

8%

2%

7%

11%

10%

10%

2%

5%

6%

2%

8%

8%

23%

6%

2

4%

5%

2%

2%

2%

3%

2%

2%

1%

https://tracktherecovery.org/

Now the landscape has changed considerably, resulting in newcross-currentsA review of the critical uncertainties shows that our ability to manage the virus has increased. We know how to prevent its spread, and we are making historically rapid progress on vaccines.

Today, some countries have successfully flattened the curve of their outbreaks. Many have used lockdowns to introduce track-trace-isolate systems that may help suppress subsequent outbreaks.

But, while the critical uncertainties related to the disease’s progression have moved in a positive direction, those related to the societal response are trending negatively.

While we may have the capabilities to suppress the virus, the public and political will to do so seems to be waning.

Sources: Harvard CCD; CIDRAP; Harvard; Stat News; Journal of Infectious Diseases; bioRxiv; medRxiv; The Hill; NYT Vaccine Tracker; JAMA Network; CEBM; Bob Wachter, UCSF; BBC; Institute for Global Change; NYT; NYT; Reuters Institute; Washington Post; University of Maryland Social Distancing Index; The Economist.

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https://ccdd.hsph.harvard.edu/will-covid-19-go-away-on-its-own-in-warmer-weather/https://www.cidrap.umn.edu/news-perspective/2020/04/experts-covid-19-pandemic-unlikely-ebb-weather-warmshttps://projects.iq.harvard.edu/covid19/findingshttps://www.statnews.com/2020/06/11/coronavirus-immunity-vaccine-development/https://academic.oup.com/jid/article/190/6/1119/919111https://www.biorxiv.org/content/10.1101/2020.05.14.095414v1https://www.medrxiv.org/content/10.1101/2020.04.17.20061440v1https://thehill.com/policy/healthcare/503085-contact-tracing-essential-to-fight-against-coronavirus-hitshttps://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html?smid=tw-sharehttps://jamanetwork.com/journals/jama/fullarticle/2766097https://www.cebm.net/covid-19/declining-death-rate-from-covid-19-in-hospitals-in-england/https://twitter.com/Bob_Wachter/status/1274181888916123648https://www.bbc.co.uk/news/world-latin-america-53150808https://institute.global/sites/default/files/inline-files/Tony%20Blair%20Institute%2C%20Global%20Coordination%20Requirements%20for%20Covid-19%20and%20Future%20Pandemics%2C%20May%202020.pdfhttps://www.nytimes.com/2020/06/24/world/europe/countries-reopening-coronavirus.htmlhttps://www.nytimes.com/2020/06/10/world/asia/reopening-before-coronavirus-ends.html?https://reutersinstitute.politics.ox.ac.uk/trust-uk-government-and-news-media-covid-19-information-down-concerns-over-misinformationhttps://www.washingtonpost.com/world/the_americas/coronavirus-brazil-bolsonaro-official-death-count-case/2020/06/07/73a713f4-a8cf-11ea-a9d9-a81c1a491c52_story.htmlhttps://data.covid.umd.edu/https://www.economist.com/business/2020/04/25/the-pandemic-is-liberating-firms-to-experiment-with-radical-new-ideas

Sources: Harvard CCD; CIDRAP; Harvard; Stat News; Journal of Infectious Diseases; bioRxiv; medRxiv; The Hill; NYT Vaccine Tracker; JAMA Network; CEBM; Bob Wachter, UCSF; BBC; Institute for Global Change; NYT; NYT; Reuters Institute; Washington Post; University of Maryland Social Distancing Index; The Economist.

How has our understanding of the disease’s progression changed?

How has our understanding of the societal response changed?

We know a lot more about the characteristics of the virus.

Seasonality does not appear to slow spread, compared to other factors.

The prevalence and duration of immunity is only partly understood.

Test-trace-isolate is key to success; countries are still working to build out the required infrastructure.

Many countries, high-income mostly, have been able to ramp up surge capacity for healthcare systems.

Vaccine and therapeutics development continues to move at an unprecedented pace.

Some countries are choosing to reopen before the pandemic is under control.

01

Global (and even local) coordination has been limited, with a ‘nation first’ approach prevalent.

02

The public is losing trust in governments’ abilities to provide accurate information on the pandemic.

03

Public and political will to address the virus appears to be waning.

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Companies have displayed their ability to move fast and fix things.

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Unprecedented government stimulus packages have kept markets and businesses afloat.

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Companies increasingly focused on stakeholder concerns vs. purely on profit and shareholder interests.

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How the landscape is changing

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https://ccdd.hsph.harvard.edu/will-covid-19-go-away-on-its-own-in-warmer-weather/https://www.cidrap.umn.edu/news-perspective/2020/04/experts-covid-19-pandemic-unlikely-ebb-weather-warmshttps://projects.iq.harvard.edu/covid19/findingshttps://www.statnews.com/2020/06/11/coronavirus-immunity-vaccine-development/https://academic.oup.com/jid/article/190/6/1119/919111https://www.biorxiv.org/content/10.1101/2020.05.14.095414v1https://www.medrxiv.org/content/10.1101/2020.04.17.20061440v1https://thehill.com/policy/healthcare/503085-contact-tracing-essential-to-fight-against-coronavirus-hitshttps://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html?smid=tw-sharehttps://jamanetwork.com/journals/jama/fullarticle/2766097https://www.cebm.net/covid-19/declining-death-rate-from-covid-19-in-hospitals-in-england/https://twitter.com/Bob_Wachter/status/1274181888916123648https://www.bbc.co.uk/news/world-latin-america-53150808https://institute.global/sites/default/files/inline-files/Tony%20Blair%20Institute%2C%20Global%20Coordination%20Requirements%20for%20Covid-19%20and%20Future%20Pandemics%2C%20May%202020.pdfhttps://www.nytimes.com/2020/06/24/world/europe/countries-reopening-coronavirus.htmlhttps://www.nytimes.com/2020/06/10/world/asia/reopening-before-coronavirus-ends.html?https://reutersinstitute.politics.ox.ac.uk/trust-uk-government-and-news-media-covid-19-information-down-concerns-over-misinformationhttps://www.washingtonpost.com/world/the_americas/coronavirus-brazil-bolsonaro-official-death-count-case/2020/06/07/73a713f4-a8cf-11ea-a9d9-a81c1a491c52_story.htmlhttps://data.covid.umd.edu/https://www.economist.com/business/2020/04/25/the-pandemic-is-liberating-firms-to-experiment-with-radical-new-ideas

Three critical cross-currents are affecting companies’ COVID-19 reopening and reinvention strategies

01

A material shift inpeople’s attitudes

The removal of strict containment measures signals a shift from policy to choice.

This increasingly places the onus on individual responsibility, creating challenges for companies trying to implement people-centric strategies, and responding to constant fluctuations in customers’ and workers’ attitudes.

02 03

A dramatic shift in fiscal stimulus

Regardless of case counts and downside risks, policymakers are looking to the future, removing short-term fiscal support in favor of long-term stimulus.

While posing risks, this creates opportunities for companies to support the rebuild.

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An acceleration in regional divergence, and a rapidly growing risk of disorder

Countries, regions and even cities are increasinglybeing driven down different paths, with signs of all scenarios emerging.

This means multinationals face different regulatory regimes and challenges across their markets.

While countries have the wherewithal to suppress the outbreak, the will of policymakers and the public is waning.

So, while many companies had assumed a relatively benign base case scenario would play out, the risk of worst-case scenarios is rising.

A material shift in people’s attitudesThe removal of strict containment measures signals a shift from policy to choice.

This increasingly places the onus on individual responsibility, creating challenges for companies trying to implement people-centric strategies, and responding to constant fluctuations in customers’ and workers’ attitudes.

This view has been echoed by leading scientists, including Dr Andrea Ammon, Director of the European Centre for Disease Prevention and Control: “Politicians have to convey the message to people that it’s really up to them to decide what’s happening with this pandemic. And in a way, empowering them by saying: ‘What you do actually matters’.”9

Sources: Data on government requirements is from Oxford COVID-19 Government Response Tracker using sub-indicators on school closing, workplace closing and stay at home requirements. Data is collected on 177 countries. The current data is from 25 June, at which point data was only available for 154 countries. Data on public compliance and trust is from Accenture’s global consumer pulse survey. The data used is based on 8,852 responses from June 16-22, and is compared to data from the pulse taken from April 2-6. Quotes sourced from: NowThis; Twitter; The Economist

Mixed results of workers’ attitudes towards employers since the outbreak

rate their employers’ crisis responses poorly, increasing risk of reputational damage.

43%feel more positive about their employers since the outbreak, establishing better relations in the long-term.

48%

Change in work-from-home frequency from pre- to post-outbreak

of people plan to increase the amount they work from home in the future.

36%of people who never worked from home previously now plan to work from home more often in the future.

53%

Government mandatory rules are being replaced by guidance

of countries do not have stay at home orders (half of those ‘recommend’ not leaving the house), a 33% increase from May 1.

68%

“In South Korea, restaurants and bars, that have largely remained open during the crisis, faced the worst criticism.” – June 2020

Some will face a backlash from customers over their response to COVID-19

of people trust their government to make the right decisions, a 6% decline from the start of April.

64%

of consumers do notthink product and retail firms responded well. This disappointing trend has continued since March.

45%

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01 Shift from policy to individual responsibility complicated by mixed confidence in employer and brand responses

https://www.bsg.ox.ac.uk/research/research-projects/coronavirus-government-response-trackerhttps://twitter.com/nowthisnews/status/1277965864776740864?s=20https://twitter.com/vsoe/status/1274184780184080384https://www.economist.com/international/2020/07/04/covid-19-is-here-to-stay-the-world-is-working-out-how-to-live-with-it

Each country, region and even city, faces a unique set of circumstances, whether from a high number of residents in nursing homes or a large informal economy. The choices made in response are driving regions down different paths.

In Brazil, for example, there have been conflicting responses between local and national government, leading to an uncoordinated response.

In Israel, central action dealt with the outbreak, but a second spike has occurred as public adherence to rules declined.

The UK was relatively slow to act, but a well observed lockdown has been effective. Failure to expand test and trace and shifts in public behaviorpose risks.

Vietnam’s success has been built on a well-developed public health system and a proactive detection and containment strategy based on comprehensive testing, tracing and quarantining.

Accenture Research analysis of data from the European Centre for Disease Prevention and Control. Further detail on: Brazil, Israel, UK, Vietnam.

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90

140

190

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0 20 40 60 80 100 120 140 160 180

NEW CONFIRMED CASES OF COVID-19Seven-day rolling average of new cases (per million)

Prolonged wave:Brazil Cyclical outbreaks:

Israel

Global

Number of days since 0.1 average cases (per million) first recorded

Rapid Remission: Vietnam

Flattened curve:UK

USA

Germany

South Africa

Each of the four scenarios is represented by at least one country

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An accelerationin regional divergence…

02 Increasingly localized response is driving regions and countries down different paths

https://www.ecdc.europa.eu/en/publications-data/download-todays-data-geographic-distribution-covid-19-cases-worldwidehttps://www.ft.com/content/c5cb3d41-0ded-40f0-986f-125bc60f9707https://jewishnews.timesofisrael.com/netanyahu-warns-lockdown-restrictions-may-be-reimposed-amid-spike-in-covid-cases/https://www.bbc.co.uk/news/uk-53159918https://www.exemplars.health/emerging-topics/epidemic-preparedness-and-response/covid-19/vietnam

The risk of worst-case scenarios is rising. We see four potential trajectories, featuring countries that:

1. Brought cases to near-zero and have been quick to address small outbreaks.

2. Brought cases under control (without completely eliminating transmission), that risk second outbreaks due to political missteps and declining public adherence to public health measures.

3. Appeared to be trending towards Rapid Remission and Flattened Curve, but are now in the midst of Cyclical Outbreaks due to increased risks taken by policymakers and/or the public.

4. Have chosen to reopen their economies with R0 above 1, having determined that lockdowns are unfeasible (either politically or economically) to maintain. They risk healthcare system overload. This is a particular concern for low/mid-income economies.

Accenture Research analysis. Mapping expresses relative, not absolute positioning. Some countries have significant variation in scenarios by state or region.

Indicative scenario pathways of select countries

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+

+ _

Rapid Remission

Cyclical Outbreaks Prolonged Wave

China

S. Korea

Germany

USA

Italy

UK

N. Zealand

Global

Iran

Brazil

SOCIETALRESPONSEGovernment,

People,& Business

DISEASE PROGRESSIONProperties of the Virus/Disease vs.Remedy (public health response)

Israel

Vietnam

1

IndiaPeru

Flattened Curve2

3 4

While the global result appears to be a flattened curve, individual countries and regions vary widely

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… and an increased risk of disorder

Regardless of case counts and downside risks, policymakers are looking to the future, removing short-term fiscal support in favorof long-term stimulus.

So far, there has been over $10 trillion in fiscal stimulus—more than double that of Global Financial Crisis10. Much of this stimulus, particularly in advanced economies, has been focused on short-term relief measures to protect lives and livelihoods.

With initial measures beginning to taper down, governments are now developing a second round of stimulus. Recent announcements suggest this round will have a greater focus on supporting long-term recovery, for example, through infrastructure investments.

This fiscal refocusing creates risks, as well as opportunities for companies to support the rebuild.

IMF June 2020

Gov.uk Europe Commission

Today—short-term rescue measures Tomorrow—long-term recovery

Stimulus breakdown by type of measure (%) Example economic recovery plans

Build, Build, Build4

To rebuild the economy:§ Better - Creating new jobs and upgrading

skills.§ Greener - Through natural infrastructure and

conservation projects and green housing.§ Faster- Accelerating infrastructure projects

and affordable homes.

£18bn

Next Generation EU5

Three core dimensions to the Next Gen EU:§ Green - Expanding renewables, the circular

economy and clean transport.§ Digital - Through better connectivity (including

5G), AI and cloud and a real data economy.§ Fair and inclusive - Expanding worker support.

€750bn

7 9

151

2

1

15

27

31

5

10

3

12

7

39

7 8

AdvancedEconomies

EmergingEconomies

Other

Job retention schemesUnemployment insuranceDirect cash payments

Individual reliefs

Public investmentPublic investment

HealthcareHealthcare reliefs

Loans / Grants

Industry support

Loan guarantees

Business reliefs

Tax relief

Advanced Economies2

EmergingEconomies3

Policy is shifting from short-term rescue measures to long-term investment actions

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A dramatic shift in fiscal stimulus

03

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https://blogs.imf.org/2020/06/24/reopening-from-the-great-lockdown-uneven-and-uncertain-recovery/https://www.gov.uk/government/news/build-build-build-prime-minister-announces-new-deal-for-britainhttps://ec.europa.eu/commission/presscorner/detail/en/ip_20_940

The effect of the cross-currents will be felt differently by industries

Industries that have more complex supply chains and those more dependent on face-to-face interaction will be impacted more.

Method: Possibility to work from home (WFH) was assigned at each occupation level depending on set of activities and special requirements to perform the job (factory workers need special equipment to work and they need to be physically present at factories, so can’t WFH). Then depending on employment structure for each company, that information was aggregated at industry and country level. Supply chain complexity is a function of the distribution of suppliers across geographies and the importance of the suppliers and is based on an indexed score.

Lower HigherProportion of jobs that cannotbe performed at home, USA (%)

Supplychain

complexity

Higher

Inconsistent industry impact

Industries where worker and customer environments have been impacted most by the crisis, particularly those more reliant on face-to-face interactions, will face stronger cross-currents from the shift to a phase of choice over policy.

Those with more complex supply chains, and exposure to low and middle-income countries, will be the most challenged by the acceleration of regional divergence and the increased risk of chaos.

Sectors that have been particularly reliant on government support, such as job retention schemes, will struggle as those are phased out. In contrast, some sectors, particularly those involved in digital and energy infrastructure, will be better positioned to support the next phase of recovery.

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0 25 50 75 100

Energy

Travel

Capital Markets

MobilitySW&P

Insurance

Nat Res

Retail

Comms & Media

UtilitiesIndustrial

High Tech

CG&S

Chem

Health

Banking

Life Sciences

03. 01. Journey to recovery and reinvention

02. Critical cross-currents

03. Course corrections

Copyright © 2020 Accenture. All rights reserved.21

Today’s cross-currents require continuous course correction

Companies need to continuously review the assumptions that shape their scenarios in order to re-baseline strategic decision-making and investment plans.

Revisit the assumptions you’ve made about critical uncertainties periodically, identifying gaps in understanding since they were first defined. Determine which mitigating actions to accelerate, which to continue as planned, which to stop and whether any new actions need to be triggered.

Model outcomes, creating an updated view of the impact on your P&L, as well as credit and liquidity headroom. Where areas of overcapacity are identified, reset cost structures to what they ‘should be’, creating investment capacity for areas that are more likely to see growth across the scenarios.

Invest in early-warning data systems that increase your ability to monitor how the critical uncertainties are evolving in real time, and how they are impacting your internal metrics against your implied base case.

Strengthen your ability to sense andrespond

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The ability to predict change and respond rapidly is critical to success. Building capability within functional areas to create enterprise-wide insights and agility.

Reset strategic decision-making

Redefine investment plans

Automate early warning systems

Companies should build their course correction approach on these three principles:

The three cross-currents we identified require three agile course corrections

Three cross-currents

Raise global-local dexterity while hedging your bets

Make adjustments for the potential for multiple speeds of recovery, empowering local interventions that enhance agility.

Put robust mitigating strategies in place for all eventualities, giving careful consideration to the potential for worst-case scenarios.

Keep human needs at the heart of your choicesMake decisions with responsibility in mind, protecting people’s interests on the path to recovery, and maintaining a permanent pulse check on behavior.

Reposition for recovery, not relief

Actively shape the recovery by engaging with stakeholders, repositioning the business to respond to government plans and the changed shape of demand.

Three course corrections

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01 A material shift inpeople’s attitudes 02An acceleration in regional divergence…and a rapidly growing risk of disorder

03 A rethinking of fiscal stimulus

Prepare for a phase of individual choice over government policy. Stricter containment measures are being relaxed in favor of a more targeted approach. The next phase will be one of choice over policy, with the onus on individual and collective decision-making.

In addition, fiscal policy is rapidly shifting from a focus on helping people to helping businesses and economies more broadly. This will create a litmus test for corporate behavior.

Even as we journey to recovery, supporting human needs of workers and customers must remain a priority. Companies will need to make decisions with responsibility in mind, putting people first. This will help strengthen trust.

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Keep human needs at the heart of your choices

Go high-touch to check people’s pulseAs formal government mandates are removed, some people are anxious about returning to offices and crowded public spaces, while others are resistant to new safety measures. • Don’t get ahead of your employees and customers. Take their pulse through high-touch

interactions: talk to them, actively listen to what they have to say, and guide them to make responsible choices.

• Move beyond the transactional to forge deeper and more meaningful relationships that build trust. Swimwear brand Summersault, for example, is using its customer service hotline to provide mental health support.

What to do now:

Redouble your commitment to responsibility / Act with purposeAs decision-making is increasingly pushed onto individuals and businesses, the next phase of the crisis will be a litmus test for corporate behavior. Compassion and confidence have never been more important.• Almost half (49%) of CHROs said that the COVID-19 crisis will impact responsible practices aimed

at improving the societal value for consumers, employees, business partners and communities, such as inclusion and diversity.11

• Foster cultural agility by recognizing and incenting people to adopt new behaviors and mindsets and to rally around a new landscape.

• Don’t jettison empathy and compassion in favor of shareholder returns. Become an “emotional enterprise,” focusing on your purpose and how you contribute to the greater good of society.

Increase the resilience of your workforceThe crisis reminds us that companies are only as resilient as their workforce. In crisis and recovery, the well-being of your people will grow in importance. Those companies that maintain a safety net of adaptable workers will be better prepared to ride out future shocks.• Make temporary resilience-boosting policies—such as paid sick leave—permanent.• Go beyond mere mental health awareness to focus on providing care and tackling the root causes

as the pressure on workers grows.

Understanding human response and resilience

Maintain a permanent pulse monitorCustomer and employee behavior is likely to continually shift as the crisis wears on. Companies will need to understand how this affects their business in real time.• Use advanced analytical models that draw on multiple sources of insights—both

new and old—from satellite imaging to social listening, to monitor sentiment and detect new patterns of behavior.

• Establish which drivers affect the patterns and create projections; on the scale of impact (e.g. macro, industry-wide or more micro) and on the level of change (e.g. permanent or temporary).

• Build capabilities and partnerships to more effectively explore how to make better business decisions informed by expertise in areas such as ethics, social psychology and the humanities.

Lead responsibly from the frontMany companies have not responded quickly enough to the crisis, bogged down by entrenched mindsets.• To be more responsive to future shocks and realize the benefits of true diversity of

thought, redefine the norms of what your leadership teams look like, seeking out neuro-diverse, contrarian voices, who don’t fit the typical profile of a leader or the culture of the organization.

• Revisit succession planning and invest in learning programs, considering whether the values and skills of those picked for future leadership are aligned with those that are needed post-crisis.

• Reinvent leadership development: Given the shift in mindset, revisit not only how you select leaders, but also how you develop them from an early stage.

What to do next:

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• The Dock, Accenture’s Global R&D and Innovation Center, has established a Human Insights Lab to bring societal perspective to emerging challenges facing Accenture’s clients and leadership. Its team of experts in the areas of social psychology, ethics and humanities enables The Dock to explore the intended and unintended possible impacts of applying emerging technologies in industries from public safety to banking.

• The Dock has also established the UnreasonableFUTURE program with organizations including the Unreasonable Group, together with Pearson and Fossil Foundation to design a future in which people and technology work side-by-side to solve workplace challenges and unlock human potential everywhere.

Read more about UnreasonableFUTURE. Learn more about creating workforce resilience and the new era of customer engagement.

https://unreasonablegroup.com/initiatives/unreasonable-future/https://www.accenture.com/us-en/insights/future-workforce/coronavirus-chro-actions-resilient-workforcehttps://www.accenture.com/us-en/insights/consulting/coronavirus-new-era-customer-engagement

What to do now:

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Raise global-local dexterity…Adjust to multiple speeds of recoveryGeographies are increasingly following separate paths, reopening with different levels of restrictions, guidelines and timelines. And they will likely follow different trajectories going forward.

Given the highly varied approaches, and likely differences in company competencies by country, there won’t be a global playbook for responding to the ongoing crisis. Companies will need to increase their global-local dexterity so the right choices can be made in each geography.

Empower, and learn from, local interventionsThe universal nature of the crisis means lessons can be learned from all locations and all levels. • Empower local business leaders to make decisions at speed. Monitor local responses to identify

success stories that can either be rolled out in other markets or similar scenarios.

• Ensure government relations teams play a central role in coordinating a local-to-global response, using their knowledge of the patchwork of regulatory regimes emerging in different markets. Consider positioning government relations leaders within the office of the Chief Strategy Officer to help manage the response.

Repurpose capacity across locationsAs countries follow different paths, regional setbacks and recovery patterns will place strain on supply, demand and workforces.

• Improve cross-channel inventory management with data and analytics, enabling you to reposition and repurpose inventories across geographies and customer segments.

• Leverage upturns in demand in recovering areas to create fuel to either support the prospect of recurring stress, or to help regions in stress.

• Prepare for new regulations affecting manufacturing locations and supplier economics. For example, in April Japan rolled out incentives worth $2.2bn to push local firms to move back manufacturing of high value-added products from China.13

• Expand communications strategies to reinforce one-company messages and to drive broad-based concern and collaboration across the company.

What to do next:

Distributed human+machinedexterityAccenture’s digital, flexible, remote-enabled business. We were among the first companies in the world to act swiftly and effectively in response to the global pandemic. As of June 2020, approximately 95% of our 513,000 people were enabled to work remotely. We delivered on client commitments and sustained delivery performance with no material service interruptions during the crisis.

Accenture already had the necessary digital technologies and infrastructure foundation in place to act fast at scale. From a talent supply perspective, we were able to meet our demand by redeploying people internally and continuing to add niche skills from the external market. AI-enabled distance learning platforms and virtual knowledge transfer helped to maximize successful job transition and onboarding.

Read more about running effective business services.

Create intelligent operationsWith change happening faster than humans can respond, companies will increasingly need to embrace intelligent operations using the power of technology to improve and accelerate their decision-making and operations. They must now be led by data and analytics. Such a model that’s accelerated by automation can make data and insights available in an instant.

Intelligent operating models combine a mixture of agile and elastic workplaces―bringing together highly skilled, distributed human + machine teams that can log in anytime, anywhere―across regions and time zones, to resolve new or unexpected issues, and deliver on customer commitments, while maintaining high levels of compliance and assurance.

Intelligent operating models:• Bring together the best innovative digital technologies, process and industry

expertise to create an evolved working environment, driven by data and analytics. • Orchestrate the allocation of work across human + machine talent – using

advanced data tools and assets to identify transactional tasks that can be automated and performed by software bots, and free up talented people for more critical thinking.

• Draw on data and insights to improve the quality and speed of decisions that drive target business outcomes.

• Monitor and provide a real-time window into what parts of the business needs improving, so you can intelligently and quickly reallocate work, mitigate risk and address potential issues, to ensure the continuity of business, the health of your workforce, and deliver sustainable business outcomes.

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https://investor.accenture.com/~/media/Files/A/Accenture-IR-V3/quarterly-earnings/2020/q3fy20/q3-fy20-conference-call-transcript.pdfhttps://www.accenture.com/us-en/insights/operations/coronavirus-effective-business-operations

What to do now:

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… and hedge your betsFuture proof for further shocksA little over a month ago, we may have been flattening the curve, but with the will of policymakers and the public waning, the risk of worst case scenarios occurring is growing. This requires companies to have robust mitigating strategies in place for all eventualities.

Understand your exposure, hedges and trigger points• Consider the implications of worst-case scenarios—potentially previously dismissed or not fully

thought through—across functional areas, including your workforce, customers, supply chain and operations, systems, finance and brand.

• Critical risks will include lengthened anxiety for workers, declining productivity, extreme volatility in supply and demand, and the exhaustion of fiscal measures to contain the economic fallout.

• Define mitigating actions, ranging from targeted workforce reductions to rapid replacement strategies for supply chains, which are triggered by measurable leading indicators once thresholds are hit.

Fast forward to future systems• Scale resources and systems based on the scenario confronting your organization in the

moment. For example, Alibaba Cloud, DAMO Academy and DingTalk have joined forces to launch a series of AI technologies and cloud-based solutions to support organizations during the crisis. The tools include epidemic prediction for estimating the trajectory of the outbreak and a computational platform for accelerated drug development.14

• Shift or expand partnerships as needed to address alternative, emerging scenarios.• Review security threats as bad actors seek to take advantage of individuals and organizations that

are reacting to different stages of the crisis.

What to do next:

In light of the COVID-19 pandemic, we were looking to create alternate sources to counter demand shifts and move from weekly to daily planning for deployment to fulfill our changing supply chain network needs. Accenture and SAP’s joint scenario planning-as-a-service is a timely and invaluable service that will benefit Blue Diamond Growers in these uncertain times. We are in the process of reconfiguring our supply chain network with our partners to meet the changing demand landscape.Future-proof your business model

• Capitalize on new sources of data and advanced analytics to understand the shape of demand and provide actionable real time insights for decision making.

• Develop new “value” use cases tailored to a lower spending environment.

• Continue to improve your omnichannel approach, doubling down on what worked during the first period of lockdown, and standing up online services that improve service while lowering cost-to-serve.

• Consider where subscription or leasing models are appropriate. Offer dynamic pricing at a personalized level to get customers over the purchasing line.

Increase your ability to separate the signal from the noiseNothing is more crippling than radical uncertainty. Yet that’s the situation executives have been faced with since coronavirus spread globally, with most struggling to separate the signal from the noise.

• Use data science to establish what’s driving scenarios, and to understand the impact of uncontrollable variables on them.

• Use machine learning techniques such as principal component analysis to identify true correlations and interconnections between macroeconomic indicators and internal actions, simulating the most effective actions to take in response to changes on the ground.

Planning for uncertainty

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Accenture helped a major food company shift its operating processes to the public cloud (AWS). This allowed them to future-proof its operating model and increase its agility. The company’s ability to meet demand was transformed, reducing costs and adjusting to the new normal of digitized processes.

Read more about building system resilience and scenario-based financial planning.

- Steve Birgfeld, CIO, Blue Diamond Growers

https://www.accenture.com/us-en/about/company/coronavirus-systems-resiliencehttps://www.accenture.com/_acnmedia/PDF-125/Accenture-Outmaneuver-Uncertainty-Financial-Planning.pdf

What to do now:

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Reposition for recovery not reliefActively shape your futureRegardless of case counts, policymakers and the public are looking forward to a post-COVID-19 world. Companies should look to actively shape the recovery by engaging with stakeholders, repositioning the business to respond to government plans and the changed shape of demand.

Reposition yourself to support national recovery agendasCountries are beginning to announce economic recovery plans, many of which are focused on infrastructure development, aimed at creating jobs and boosting growth. In the UK, for example, Prime Minister Boris Johnson echoed Franklin D. Roosevelt in announcing plans to ‘Build, Build, Build’.• Companies should seek to position themselves to support national recovery agendas, and enable

fairer, smarter and greener growth agendas.

Reposition how you engage with regulators and policymakersCountries are beginning to reshape their regulatory regimes to respond to the immediate challenges of COVID-19 and beyond. In our survey of C-suite executives, we found that 60% foresee additional government intervention and believe it will benefit the recovery of their industry8.

• Engage industry bodies and trade associations to champion favorable changes, and to lock in changes that have proven effective through the lockdown (e.g. the loosening of regulatory regimes related to telemedicine).

• For those in more vulnerable industries, companies should continue to press for government support to mitigate the medium- to long-term impact of COVID-19, particularly given the growing risk of worsening scenarios.

What to do next:

Reposition your offerings for the new shape of demand in both the private and public sectorsConsumer demand has returned quicker than expected in a number of markets.

• New forms of demand are likely to emerge, particularly in the public and healthcare sectors. It is unlikely that governments in advanced economies will return to the period of austerity that was borne out of the Global Financial Crisis.

• Companies should seek to reposition their offerings to serve these new sources of demand.

Data insights fuel growth• Leveraging its data science expertise, Accenture

worked with a Specialty Retailer to formulate a COVID-19 model by key geographies to create store reopening plans across locations in the U.S. To estimate demand, localized planning algorithms account for macroeconomic and social factors driving store traffic. Teams assessed which interventions would be required during the recovery stage (as stores start opening) and the growth stage (when all stores open in the “new normal”).

• Accenture leveraged social media analytics to observe potential changes in consumer shopping habits and choices in the fashion industry post COVID-19 to help the company create a merchandise assortment strategy. Even at the granular level of geography, estimates were made for the shift in product demand from brick and mortar stores to e-commerce.

Read more about solving for liquidity, profitability and enterprise value.

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https://www.accenture.com/us-en/insights/strategy/coronavirus-liquidity-profitability-enterprise-value

Course correct, again and again

As companies continue their journey from recovery to reinvention, the leaders will be those that can Outmaneuver Uncertainty, continuously.

The pandemic has not yet run its course and the economic outlook remains unpredictable. International companies, in particular, need to implement strategies with regional dexterity. And all organizations must maintain their focus on understanding and supporting their people and their customers as human needs reshape operations and market demand.

More than ever, as companies course correct again and again, their competitive success will be determined by their ability to predict and prepare, sense and respond.

Those who accelerate their digital transformation—embracing cloud, AI, analytics, flexible IT infrastructure and intelligent operations—will be best placed to lead with insight and agility.

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Contacts

Simon EavesManaging Director, UK and Ireland

Annette RippertGroup Chief ExecutiveStrategy & Consulting

Rachael BartelsSenior Managing DirectorGlobal Lead – Enterprise Function Networks & Programs

Paul NunesManaging Director, Thought Leadership, Accenture Research

Trevor GruzinSenior Managing Director AAPAC Lead, Accenture Strategy and Growth & Strategy Lead for Growth Markets

If you would to discuss your plans to reopen your operations, please contact returntowork@accenture.com

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Manish SharmaGroup Chief ExecutiveAccenture Operations

Kathleen O’ReillySenior Managing Director Global Lead – Accenture Strategy

Koen DeryckereSenior Managing Director Global Lead – Industry Networks & Programs

mailto:returntowork@accenture.com

References1 Opportunity Insights Economic Tracker.2 Accenture, Five Priorities to Help Reopen and Reinvent Your Business, May 6, 20203 Accenture CXO global survey, June-July 2020.4 Accenture Future Systems Research, November 2019.5 Oxford COVID-19 Government Response Tracker.6 Opportunity Insights Economic Tracker.7 Andrew Haldane, Chief Economist, Bank of England, June 30th 2020, ‘The Second Quarter.’8 Accenture CXO global survey, June-July 2020.9 The Economist, July 4th 2020, ‘Covid-19 is here to stay. The world is working out how to live with it.’10 IMF and UBS Research.11 Accenture CXO global survey, June-July 2020.12 The Straits Times, Oct 2019, ‘UOB launches course for all 26,000 employees to help build core skills in digital age.’ 13 Bloomberg, April 8th 2020, ‘Japan to fund firms to shift production out of china.’14 Businesswire, March 19th 2020, ‘Alibaba Cloud Offers AI, Cloud Services to Help Battle COVID-19 Globally.’

ContributorsThe authors would like to thank Tawfik Jarjour, Matthew McGuinness, Mike Moore, Steven Marcelino and Ann Vander Hijde for their contributions to the publication.

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https://tracktherecovery.org/https://www.accenture.com/us-en/about/company/coronavirus-reopen-and-reinvent-your-business?src=PSEARCHhttps://www.accenture.com/us-en/insights/future-systems/future-ready-enterprise-systemshttps://www.bsg.ox.ac.uk/research/research-projects/coronavirus-government-response-trackerhttps://tracktherecovery.org/https://www.bankofengland.co.uk/-/media/boe/files/speech/2020/the-second-quarter-speech-by-andy-haldane.pdf?la=en&hash=3B82F9C046B7BCDA160AE8BE558B1EB58CFF21EBhttps://www.economist.com/international/2020/07/04/covid-19-is-here-to-stay-the-world-is-working-out-how-to-live-with-ithttps://blogs.imf.org/2020/06/24/reopening-from-the-great-lockdown-uneven-and-uncertain-recovery/https://www.straitstimes.com/business/banking/uob-launches-better-ucourse-for-all-26000-employees-to-help-build-core-skills-inhttps://www.bloomberg.com/news/articles/2020-04-08/japan-to-fund-firms-to-shift-production-out-of-chinahttps://www.businesswire.com/news/home/20200318005821/en/Alibaba-Cloud-Offers-AI-Cloud-Services-Battle

To help our clients navigate both the human and business impact of COVID-19,we’ve created a hub that houses our latest thinking on a variety of topics.

Each topic highlights specific actions which can be taken now and what to consider next, as industries move towards a new normal.

We look at everything from leadership essentials and ensuring productivity for your employees and customer service groups, to building supply chain resilience and much more.

The hub is updated constantly too, so check back regularly for more insights.

Visit the hub

https://www.accenture.com/gb-en/about/company/coronavirus-business-economic-impact

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