Show me a business that hasn’t been challenged to adapt and innovate due to COVID-19.
Over the last 18 months, businesses have had to alter their strategic intent to cater for an era of homebound customers, social distancing, remote working, customer anxiety, newness, supply chain issues, and an unpredictable environment.
Of course, for the businesses bearing the brunt of COVID-19, we know that it has forced them into crisis mode ahead of “business as usual” considered planning. Many companies have chosen to adopt innovation and transformation quickly, readily, and smartly out of necessity to compete or survive. Others are bunkering down and running a lean operation until they can grow and thrive again.
At a board level, COVID-19 has equally strained and challenged boardrooms and directors. It has forced chairs and directors to think and implement change faster, to change our speed of adaptation and decisiveness, and to learn new skills and knowledge in order to effectively guide the companies we serve. It has required a deeper interrogation at board level of the role of culture in any business and an assessment of what acceptable risk looks like so that opportunities to drive the business forward are seized.
For most businesses, both at board and operational level, the biggest area of transformation has been driven by their appetite and readiness to implement, as well as the speed and capacity to forge their digital road. But digital transformation is just a dream without a new approach to tech.
The new role of digital
As digital technology helps build and shape the future, it’s very important to acknowledge that it is a means to an end not an end in itself.
Digital is about accessibility, flexibility, engagement and avenues to get products and services to market fast or to market more directly and effectively to customers. It is also a data avenue to develop customer insights in sharp detail.
It means we are able to learn from the outside the views of all stakeholders and to utilise those learnings to build a better business. This personalised analysis will drive business and brand engagement and cement a strong culture which, in turn, results in profits.
McKinsey Insights’ “Digital strategy in a time of crisis” paper notes, “The COVID-19 crisis seemingly provides a sudden glimpse into a future world, one in which digital has become central to every interaction, forcing both organisations and individuals further up the adoption curve almost overnight. A world in which digital channels become the primary (and, in some cases, sole) customer engagement model, and automated processes become a primary driver of productivity — and the basis of flexible, transparent, and stable supply chains. A world in which agile ways of working are a prerequisite to meeting seemingly daily changes to customer behaviour.”
If a silver lining can be found, it might be in the falling barriers to improvisation and experimentation that have emerged among customers, markets, regulators, and organisations. In this unique moment, companies can learn and progress more quickly than ever before.
Leaders with business breadth know that pivoting, agility and navigating ambiguity are par for the course. We have to use our heightened soft skills to apply and learn in any and all business contexts. Companies should — and many are — considering the pandemic as an opportunity to exercise development in this area. Boards should also see this time as one of learning for the entire board.
Getting digital right
Alongside our COVID-19 imposed fascination with digital, there continues to be one foundational issue that has a disproportionate impact on the value digital can create for any business: Getting it right, so the transformation focuses on the highest value source or sources of growth for your brand, product or service. My advice is to always focus on consumers and customers first and work out which integrated experiences you want to follow and adopt. Start small and gradually add new channels and capability as you get to know more about what people want and how they prefer to be serviced. This will extend to employees and other stakeholders.
Shaping future success
To paraphrase Peter Drucker, the best way to predict the future is to create the future. So the big questions become:
- How do firms shape the future?
- Do they do it alone, or in concert with others?
- What can we learn from this period?
- How can boards help businesses better harness digital?
So how can digital set up businesses for future success?
- Digital transformation starts with the end in mind: the customer. How does your strategy deliver to the customer’s needs? Digital enables a vastly enhanced customer experience, so start with that in mind and remember digital isn’t the end in itself.
- Digital delivery lessens frustration, costs, inefficiency and resources, so we must be sure to integrate systems purposefully and with future strategy in mind.
- To succeed you need a culture of experimentation and innovation. Transformation doesn’t mean bolting on innovation or investing in standalone projects. It means an end-to-end rethinking of the way organisations work.
- A business as a whole needs to have a creative, flexible, and open mind and a board of directors who can operate in this way too. This will probably require a reinterpretation of the classic skills matrix to account for the right mix of voices and inclusion of lived experiences.
The digital growth journey requires a switch from functional to cross-functional operations, which acknowledges and embraces the impact of data on culture, performance, and transformational success.
Get it right, get it quick. Get it directly or through acquisition — but don’t miss the boat.