The Nordics have, according to recent studies, outperformed their global peers in business performance metrics during the Covid-19 crisis. The Nordics have proved resilient in the face of the pandemic when it comes to business performance, with all countries in the region bar Norway, showing better TSR (total shareholder returns) averages than global statistics. Leading the results are Denmark that has drastically outperformed its peers, both in the Nordic countries and globally. Finland and Sweden have also been more resilient than the global average, though at more moderate levels. Norwegian companies, by contrast, have suffered the most, with a significantly higher loss of value than their global peers.
Looking back at the last financial crisis in 2008 - and the companies who not only survived, but also excelled through the crisis - BCG identified a few different keys to performance during and after 2008. We've summarized them right here.
1. ACT PROACTIVELY.
During the 2008 financial crisis, 80% of the S&P Global 1200 companies tended to act reactively rather than proactively; they waited until their businesses were directly affected by the downturn before implementing mitigating actions. By comparison, the top 25 performers not only increased their liquidity, but also proactive- 5 Performance of Nordic companies during COVID-19 ly invested in strategic acquisitions. In essence, they applied the preemptive philosophy of “fix it before it breaks”.
2. INCREASE VITALITY.
In addition to being proactive, the top performers avoided the temptation to rest on their laurels. They knew that not even the best approach lasts very long, let alone during a crisis. As a result, these companies increased their vitality, which we define as the ability to innovate, explore new ideas, and reinvent the corporate strategy in order to achieve sustainable, long-term growth. They actively sought out promising markets and concepts, and they redesigned their development processes to quickly get new ideas to market. This vitality mindset helped these companies stay nimble and find growth, irrespectively of how the market conditions had changed.
3. STICK TO A CLEAR VISION.
Even as they looked for new sources of growth, the top performers maintained the same clear vision that they had had before the global financial crisis—a vision that was based on long-term themes. For example, most planned to invest heavily to expand into new countries and to digitize their processes and customer interactions. Naturally, the projects to support those objectives changed because of the crisis, but the vision itself remained fixed, so the organizations continued with the same clear focus points.
4. BUILD RESILIENCE.
The top performers knew that they could not avoid future disruptions, so they built organizations to not only withstand future shocks, but to anticipate them. For example, most top performers developed a scenario-planning function that was tasked with identifying and observing trends and potential disruptions. These companies also maintained cash reserves that, on average, were two times higher than the average reserves maintained by the companies in the S&P Global 1200. This helped the top 25 companies keep their options open. In addition, they hired talent with a wide variety of expertise. Due to this focus on building resilience, these companies are still reaping the benefits of having a diverse staff with a variety of skills and ideas and talent development programs.
5. STREAMLINE THE ORGANIZATION.
Finally, top performers prepared their organizations by streamlining core operations, redesigning processes to capitalize on digitalization, and generating efficiencies so that they would be as lean as possible when the next crisis hit. This is a far more forward-looking approach than taken by many other organizations that are simply relying on budget cuts and headcount reductions in the event of a shock to the system.
The full article from BCG: Win the fight, win the future: How nordic companies are navigating the Covid-19 crisis