Last week, this page addressed the quantification of the digital acceleration that the coronavirus pandemic has caused in companies. In a context of rapid change, it is also reasonable to assume that there has been a radical shift in priorities, and all these transformations are not in vain: they generate new niches of opportunity and contexts for growth, because it is necessary to meet the needs of the management teams of the bigplayers, and therefore there is room for new ways of structuring support services, offering scalable B2B products, or establishing collaborative synergies that give rise to symbiotic relationships where all parties win (win-win).
To measure the evolution of these needs, theInstitute for Business Value at IBM has undertaken an ambitious study based on surveys of 3,450 executives from 20 countries and 22 industries. Such are the revelations of the changes that are predicted that the authors of the study have taken the liberty of using the term "epiphany" to define them. And from the combined study of the data obtained, they have identified up to five "epiphanies" or key findings about the opportunities that will open up in the coming years, the "years of the pandemic."
The first "epiphany" has to do with something that is not particularly new to us, but the research approach is very relevant. It basically says that digital transformation has never been purely a question of technology, but rather of corporate culture. The key idea is that technology is an unavoidable factor in this transformation, but rather than accelerating its implementation, the COVID-19 pandemic has unlocked the elements that were preventing its full development. This is largely because the barriers were found to be "unfounded." The data analysis report describes it with absolute precision:
"Dependence on technology platforms intensified [after the outbreak of the crisis], and those platforms, together with the corporate teams that use them, delivered results. It's not that new technology was suddenly discovered and implemented; rather, the tools that were already available were deployed to their full potential. Previous barriers to implementation were unceremoniously swept aside, and those who moved first saw almost immediate results."
COVID-19 has accelerated change in 59% of organizations to such an extent that it has enabled two out of three initiatives that previously faced intense internal resistance to be completed. This is the case for most companies, which have undertaken changes that they consider to be "irreversible": switching to cloud-based business activities (64%), accelerated process automation (60%), adjustments to change management approaches (60%), or permanent changes to the organization's strategy (54%). There is greater confidence in the possibilities of technology, and therein lies the first great opportunity: it is not that it will be used more, but that there will be greater confidence in its results.
The second major "epiphany" is not a revelationper se, nor is it something that was unknown before the pandemic; but what was previously viewed with suspicion is now seen with absolute conviction: the human factor is key to success. And this basically means two things: workforce training, i.e., employee experience; and, of course, customer experience. Executives are taking a global and comprehensive approach whereby customer experience will become a "high priority" over the next two years for virtually all companies (84%).
However, the report points out two conflicts here, both related to inconsistencies between what is said and what is done. Regarding this renewed passion for the customer experience, the response regarding the use of technology seems vague, since although most opt for artificial intelligence and chatbots, only 1 in 3 respondents (35%) believe that improved customer service could be one of the benefits of using new technologies. The other contradiction lies in the employee experience and is more severe: it has to do with a trust gap between what employers say they promote and the perceptions of their employees.
For example, regarding the commitment to teach skills that are adapted to the new times, the contrast between employers who say they do so and employees who say they perceive it is 74% versus 38%. The same can be said for support for physical and emotional health, which stands at 80%–46%. Or in providing clear guidelines for action and expectations, which receives scores of 86% from employers versus 51% from employees.
The third epiphany is directly related to the impact of the pandemic. Traumatic stress has taken hold of corporate strategy, according to the IBV/IBM study, and alongside new developments, "fires" that were thought to have been long extinguished are reappearing, such as cost management, liquidity assurance, cash flow monitoring, and concerns about safety and protections in the workplace. It is no small amount of stress that they have to deal with. Let us once again allow the study to express it in very well-chosen terms:
Executives are tasked with defining their organizations' vision. But it can be difficult to focus when they are constantly putting out fires. While workforce safety and resilience, cost management, and organizational agility emerge as top short- and long-term priorities, the pandemic has amplified old business fears and introduced new ones. The result? Executives are enamored with the priority of the day.
In other words: an inevitable resurgence ofmicro-management. This is a harmful context for truly relaunching business activity, because operations overshadow the long-term view: it's like a sailboat that has weathered a storm, leaving behind tattered sails, tons of water to bail out, injuries among the crew... Too many fronts open on which, "then, everything is important." "Everything except improving the customer experience, the only thing that can help drive performance and growth when the competition is lost in the fog."
That is why the fourth epiphany is so relevant: it is certain that some will lose and others will win, but what is almost certain is that those failures and successes will not be solitary. To cope with what is already known as a K-shaped recovery from the crisis (some will gain a lot, others will lose everything), alliances and collaborations will be crucial, both with companies in the same sector and in other sectors. Not everyone can afford to be an Amazon or an Apple. Most will need more traveling partners, and more diverse ones than they have had to date.
In the very near future, size will not be a decisive factor for success. Nor even for resilience. Anyone who wants to play in the future league of companies that emerge stronger must do so with flexibility. And that is a great opportunity in a context of companies that have turned inward, multiplying their efforts in theircore business, seeking productivity where there is little room for margins: in operational improvements and in the workforce. Other efforts are required, more difficult ones, but they are the only ones to be considered for those who are "sincere in their desire to increase competitiveness." Efforts linked to tomorrow's innovations, rather than today's difficulties.
Finally, the fifth epiphany refers to a redefinition of shared spaces between the impetus of health concerns and the already inherited considerations in favor of sustainability and the environment. Despite the universalization of protective mechanisms such as masks and gloves that could be harmful to the environment, for consumers this does not alter their prospects of moving towards a more sustainable world. This represents a logistical and strategic challenge for organizations around the world.
This may be one of the most challenging and critical implications of post-COVID-19 business. Meeting this standard will require not only new practices and new materials, but also new types of data and efficiency. For example: What is the environmental cost of meat spoiling or being discarded compared to using more plastic to make it safer? How do we enable supply chains and last-mile delivery to get what businesses and consumers need, without unnecessary waste? More sophisticated questions are coming, and leaders are expected to provide more nuanced and educated answers.
Based on these five key opportunities, the study issues its own warning: the pandemic has been "a wake-up call that the unexpected and the improbable are more tangible and plausible than anyone had previously anticipated," and therefore changes in strategy, management, operations, and budget priorities are here to stay. The acceleration will be even more intense in the near future, and organizational complexity will continue to be the main obstacle, directly affecting workforce "burnout."
Is this, then, the prelude to a pessimistic future? Quite the contrary:
All of this provides a new opportunity to build better businesses and a better world. It starts with enabling a diverse workforce to perform at its best, and building trust among employees will be critical. How they are treated now will have a huge impact on perceptions and value in the future.
Photo by César Abner Martínez Aguilar on Unsplash
Text: APP/EKMB/BTCS
