Canadian Underwriter

A primer on business planning for the ‘new normal’ after COVID

January 8, 2021   by David Gambrill

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As the arrival of vaccines in Canada promise to put an end to the pandemic, insurers and brokers now face the same task as their commercial clients: Creating a business plan for the ‘new normal,’ after the threat of COVID-19 is gone.

The task will require some guesswork, say the authors of a Harvard Business Review (HRB) blog, ‘Creating a post-COVID business plan.’ But social science and innovation theory can help the industry predict their clients’ post-pandemic behaviours.

Creating a business plan will require businesses to answer three questions, according to HRB bloggers Dev Patnaik, Michelle Loret de Mola, and Brady Bates. The first is: How does your business really make its money?

Once you know where your profits are coming from, you will then be able to answer the second question: Who is driving these profits? In your post-COVID plan, define the key stakeholders and customer segments in your business model who are most responsible for delivering your profitable business, the authors recommend.

And then the fun begins — predicting the future behaviours of your key stakeholders and customer segments.

“The third critical question — what will people’s behaviours look like after the pandemic — may be more difficult to answer,” the authors write. “Even though the pandemic is temporary, it’s lasting long enough to turn temporary behaviours into structural shifts. At the end of the crisis, some things will return to the way they were, some things will look very different, and some things will simply not come back. The trick is to figure out which is which.”

The authors define three categories of behaviours to analyze when putting together your new business model:

Sustained behaviours

Sustained behaviours are likely to return to normal after the pandemic is over. For example, the authors write, people initially stopped staying in hotels at the beginning of the pandemic, but then returned to them as the pandemic dragged on.

Transformed behaviours

Transformed behaviours are likely to resume after COVID-19, but they will be fundamentally changed. The authors cite the example of people flying in planes again after Sept. 11, 2001, when hijacked planes rammed into the World Trade Center buildings in New York, killing almost 3,000 people. People started flying again, but with much stricter security protocols at airports.

Collapsed behaviours

These behaviours will simply stop, even after COVID-19 is long gone. The authors cite another 9-11 example: When airports stopped allowing travellers to bring drinks on planes, airport coffee shops located ahead of security checkpoints started to disappear.

Social science research and innovation theory offer four ways to help businesses figure out into which of these categories a post-pandemic behaviour may fall.

First, whether or not a pre-COVID behaviour is a routine or force of habit is influential in determining whether the behaviour will be sustained post-COVID, the article’s authors note.

“Studies of habit formation suggest that time spent doing a behaviour isn’t the critical factor in determining whether it gets embedded; it’s the number of times you do it,” they write. “For example, after analyzing its order data, a home delivery company discovered that it took four deliveries to make a customer for life. Completing three orders wasn’t enough. And five orders provided no additional adherence.”

Second, studies in motivation show that behaviours with intrinsic psychological benefits are more likely to be sustained post-COVID than behaviours motivated by financial gain. For example, the pandemic may make us all aware of how much we miss seeing people in person; and so, while we are all saving money by not going out to pubs and restaurants during the pandemic, there will be a psychological benefit in seeing people on a restaurant patio again once the pandemic is over.

Third, where are the pressures coming from to cease or maintain certain behaviours? For example, just like peer pressure can make you exceed the speed limit to mimic the behaviours of the highway drivers around you, the pressure of authority figures in the police car with shining red lights will cause you to cease the behaviour.

Fourth, are there alternatives to the behaviour? “People will abandon a behaviour if there’s a better way to do it, but shifting to the new behaviour needs to be relatively painless,” the HBR authors observe. “Importantly, technology adoption theory suggests that the alternative needs to already be in use by early adopters.”


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