How CEOs can lead a post-pandemic digital recovery
- Current crisis has highlighted some weak-points in organizational agility
- Digital transformation is now key to survival for many organizations as economic recession looms
- CEOs can take the initiative to spearhead digital readiness
The coronavirus pandemic is permeating into every aspect of human life at the present, on a scale that has been rarely seen in most people’s lifetimes.
The virus and its impact on daily living has become a catalyst for major change across categories, some of which will be permanent fixtures in the ‘new normal’.
The butterfly effect of all this disruption is a grim economic outlook, forcing many organizations to make tough choices in the short term. Companies have been slashing spend and tempering costs, all amid a mass migration of personnel to remote working.
Research firm McKinsey has studied previous economic cycles, which included compiling historical data of over 1,000 publicly traded companies during the last major economic downturn in 2007 and 2008.
Preparation now is key to longer-term survival
The data showed that around 10 percent of those PLCs came out stronger and performed much better than the rest, and the majority of those companies adopted a through-cycle mentality while the crisis was ongoing.
This mentality placed these enterprises in the best possible position to power out of the downturn, ensuring they were ahead when the economy started to turn around. One key takeaway from the analysis is that early movers who responded decisively with a measured approach during the crisis performed the best after as well.
COVID-19 has shown just how critical digitalization has become for business during a crisis. At the same time, it became glaringly apparent just how vulnerable many companies were when required to rapidly pivot their businesses to fill needs in new and unexpected ways.
The companies with a substantial digital footprint were most prepared to handle the rapid shift, such as e-commerce platforms or food delivery apps which could dispense quicker and reliable deliveries of groceries and other necessities without needing to be physically present.
Many companies are aware of the need to transform their operations and offerings, with many testing pilot initiatives and enhancements during economically prosperous times.
Right now, many organizations could focus time and resources on digital enhancements, and this is something CEOs should gravitate towards despite the challenging circumstances their companies face.
Continue transformation with flexibility in mind
Business leaders need to develop a clear operational road map at this stage, assigning value and feasibility to each step in the plan. Value can be ascertained by taking stock of emerging customer and supplier behavior patterns, as well as taking note of developing trends that are being pushed to the fore by present market conditions.
CEOs need to work closely with their leadership teams despite the present hardships, identifying key roles and tasks that will accomplish critical steps in the digital road map going forward. A clear strategy is integral, even though the plan might change or evolve.
The coronavirus pandemic has repeatedly displayed how quick-thinking and resourceful people can be when the need arises, and those with an entrepreneurial spirit should be adept at spotting opportunity gaps that can be filled with a stripped-down, priority-focused approach to problem-solving.
The CEO is not just expected to set the new business direction, but to think ahead to drill the structure of building multiple businesses within a business, in order for the company to be sustainable and to diversify the potential sources for future growth.
IT teams will be intimately involved in any real attempt at digitally transforming an enterprise, and the present working conditions around the world are illustrating exactly what technology-driven initiatives are bearing fruit, and can be adapted to a sustained operational model once the crisis is over.
For example, cloud and distributed services have proven to be invaluable to many businesses, and companies are seeing their value every day as they are not locked down to a centralized office location and servers.
Likewise, videoconferencing has become a more popular alternative to teleconferencing, while a hybrid model of two or more communication mediums might become the prevalent method in the future. In addition, remote working does not seem as frivolous as it might have just two months ago, and might actually help companies conserve office space rental, utilities, and other overheads even beyond the crisis.
Applying learnings on-the-fly
Being able to adapt and learn on the fly are crucial abilities for any leader, let alone C-level execs. Another important lesson observed of the 10 percent best-performing PLCs is the resolve to stick to the experimental, empowered way of thinking post-crisis.
Doing things differently will definitely be daunting and formidable at the onset. What is important to highlight, is that the top 10 percent are over 50 percent more likely to conduct testing– and to execute based on the results of those testing– compared to their competitors who are earning considerably less revenue.
Switching the culture to one championing learning and iterative improvements is integral, but so is retaining and hiring the right people to see the company through once the recovery begins to gain momentum.
Forward-looking CEOs are using the current crisis as a benchmark to identify core people, roles, and even the technology which has been stress-tested and could be even more productive under more favorable circumstances.
Once identified, leadership can ensure that adequate training and upskilling opportunities are provided for in the road map, with well-rounded milestones in place to be met or modified when the time comes.
COVID-19 has made it abundantly clear of the crucial role that technology can and will play from now onwards, no longer just supporting systems wirelessly.
CEOs need to be aware, and should work closely with their chief information officer or technology/transformation officer to make sure adequate funding is allocated for modernizing legacy systems, improving outdated processes with the correct tech, and in some instances completely overhauling the infrastructure to make business strategy is formulated with the proper input and technology stacks in place to scale the company up.
Data analytics collected up to that point from all sectors of the business will be invaluable in informing these corporate decisions. If the company has yet to prioritize a data-driven approach to evolving business concerns, then the CEO should focus on that immediately.