Last week this page addressed the quantification of the digital acceleration that the coronavirus pandemic has caused in companies. In a context of accelerated change, it can also be assumed that there has been a radical alteration of priorities, and all these transformations do not occur in vain: they generate new niches of opportunity and growth contexts, because it is necessary to meet the needs of the management of the big players, and therefore new ways of structuring support services, offering scalable B2B products or establishing collaborative synergies that lead to symbiotic relationships where all parties win(win-win).
To measure the evolution of these needs, the Institute for Business Value of the multinational 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 come to identify up to five "epiphanies" or key findings about the opportunities opening 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 focus of the research is very relevant. It comes to say that digital transformation has never been purely a matter of technology, but of corporate culture. The key idea is that technology is an unavoidable factor in this transformation, but that rather than accelerating its implementation, the COVID-19 pandemic has unblocked the elements that prevented its full development. In large part because the barriers were found to be "unfounded". The data analysis report describes this with absolute precision:
"The reliance on technology platforms became acute [from the outbreak of the crisis] and those platforms, along with the corporate teams that use them, delivered results. It's not that new technology was suddenly discovered and implemented; on the contrary, the tools that were already available were deployed to their full potential. Pre-implementation barriers were unceremoniously pushed aside, and those who moved first saw almost immediate results."
COVID-19 has accelerated change in 59% of organizations to the point that it has enabled the completion of two out of three initiatives that before this crisis met with intense internal resistance. Most companies have tackled changes for which they consider there is "no turning back": moving to cloud-based business activities (64%), accelerated process automation (60%), adjusting change management approaches (60%), or making permanent changes to the organization's strategy (54%). There is greater confidence in the possibilities of technology, and here we have the first great opportunity: it is not that it will be used more, it is that there will be more confidence in its results.
The second great "epiphany" is not a revelation per se, it is not something that was not known before the pandemic; but what was previously viewed with suspicion now appears 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 take a global and holistic view that Customer Experience will become a "high priority" in the next two years for almost all companies (84%).
However, the report points out two conflicts here, both related to inconsistencies between what is claimed and what is executed. Regarding this renewed passion for Customer Experience, the answer on the use of technology seems diffuse, as although the majority opt for Artificial Intelligence and chatbots, only 1 in 3 respondents (35%) consider that improved customer service can be one of the benefits of using new technologies. The other contradiction is in the employee experience and is more severe: it has to do with a trust gap between what employers claim to drive and the perceptions their employees have.
For example, in terms of commitment to teaching skills that adapt to changing 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 supporting physical and emotional health, which stands at 80% - 46%. Or in providing clear action guidelines and expectations, which scores 86% for employers versus 51% for employees.
The third epiphany is directly related to the impact of the pandemic. Traumatic stress has taken over corporate strategy, says the IBV/IBM study, and along with new developments come "fires" that were long thought to have been overcome, such as cost management, liquidity assurance, cash flow monitoring, and concerns about safety and security in the workplace. It's no small amount of stress they have to deal with. Again, let the study express it in well-chosen terms:
Executives are tasked with defining the vision of their organisations. But it can be hard to focus if they are continually putting out fires. While workforce safety and resilience, cost management and organisational agility emerge as the top short- and long-term priorities, the pandemic has amplified old business fears and introduced new ones. The result? Executives are in love with the priority du jour.
In other words: a certain inescapable resurgence of micro-management. A harmful context to really relaunch the business, because operations eat up the long-term view: it is like a sailboat that has faced a storm that has left in its wake frayed sails, tons of water to bail out, wounds among the crew... Too many open fronts in 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: some will certainly lose and some will win, but what is almost more certain is that these failures and successes will not be in isolation. To cope with what is already known as a K-shaped exit from the crisis (some will win big, some will lose everything), alliances and collaborations will be crucial, both with companies in the sector itself and in other sectors. Not everyone can afford to be an Amazon or an Apple. Most will need more and more diverse travel partners than have served them to date.
In the very near future, size will not be a decisive factor for success. Not even in terms of resilience. Whoever wants to play in the future league of the strongest emerging companies must do so with flexibility. And that is a great opportunity in a context of companies that have introverted their perspectives, multiplying efforts in their core, looking for productivity where few margins can be found: in operational improvements and in the workforce. Other, more difficult efforts are required, but they are the only ones that can be contemplated 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 the shared spaces between the impetus of health concerns and long-standing considerations of sustainability and the environment. Despite the universalisation of protective mechanisms such as face masks and gloves that could be harmful to the environment, for consumers this does not alter their perspectives on moving towards a more sustainable world. This represents a logistical and strategic challenge for organisations 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 efficiencies. For example: What is the environmental cost of meat spoiling or being thrown away versus 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 lie ahead and leaders are expected to provide more nuanced and educated answers.
From these five key opportunities, the study launches its particular warning to navigators: 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 coming times and organizational complexity will remain the main obstacle, which has a direct impact on the "burnout" of the workforce.
Is this a prelude to a pessimistic future? Quite the opposite:
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
