Business in the new normal: Define it, or watch it unfold?
A joke is making the rounds on social media. Who led the digital transformation of your company? A) CEO B) CTO C) COVID-19. The encircled letter was C, of course. And, yes, apparently COVID-19 is what it took to convince companies to finally embrace digital transformation to ensure the success of their business in the new normal.
While the pandemic has caught business leaders flatfooted, they have known for years that digital transformation was necessary. So what happened?
Adaptability is the new norm
“In the weeks since the COVID-19 crisis escalated, there has been one overwhelmingly consistent theme: most leaders now recognize that they weren’t ready. They’ve known for some time that in an era of unprecedented change, speed and agility are needed to transform. In the last decade, particularly in the past two or three years, companies have been under pressure to evolve their business models in response to new sets of behaviors and rapidly shifting dynamics and competitors,” Rossana A. Fajardo, SGV Advisory Services Leader, told Digital Life Asia via email.
Unfortunately, she said many barriers slowed down digital transformation. For one, some saw digital transformation as expensive and risky. Overreliance on traditional sources of competitive advantage was also a factor. Some thought digital transformation was only about technology. So they only focused on an online presence or ecommerce, instead of offering a better customer experience or optimizing processes.
“In thinking about the future, no one truly confronted the probability of such a pandemic, even if common sense and science said it could happen. What this experience has taught us, or should teach us, is that companies need to be ready for anything. Adaptability is the new norm. Future-back thinking gives companies the tools to build the muscle necessary to adapt to whatever the future may hold. It’s not about predicting the future; it’s about making the company fit and ready enough to manage the risks and seize the opportunities in any scenario,” Fajardo said.
Companies that are ahead in digital transformation actually share habits that are leading to improved financial performance. This is according to “Tech Horizon: Leadership perspectives on technology and transformation“, a multi-country and multi-industry EY report. This report surveyed 500 large corporations and 70 startups.
Defining the new normal
As companies, especially small and medium-sized enterprises, struggle to stay afloat, some have decided to pivot their business. Many businesses will have to make difficult choices in the weeks and months ahead. What they must realize is that they have to define the new normal for their business. Otherwise, they will have to watch it unfold.
“Companies now face, in many ways, the same fundamental choice we have as individuals. The one thing we can control in times like these – faced with externally imposed and unanticipated change – is our response. Do we retreat to what’s familiar? Do we focus only on the short term? Or, do we see this as an opportunity to reboot and rebalance?
“We talk about this latter path as the transformative mindset. Although there will be a tendency to amplify the now and focus exclusively on resiliency, leading companies will find a way to balance this with recovery, readying the company for what comes next, and planning for their renaissance in the period beyond the pandemic. They’ll embrace the opportunity to reimagine the transformation journey in a way that puts humans at the center, innovates at scale, and deploys technology at speed. In doing so, these companies will improve their agility and their ability to adapt and emerge even stronger,” Fajardo said.
Work in the age of COVID-19
It is still too early to tell what the lasting impact of COVID-19 will be. Fajardo, however, said one of the main areas that will be affected will be the way we work.
“As the crisis continues, it could accelerate development of next-gen remote working technologies, such as augmented and virtual reality. Since these technologies will generate efficiency gains, organizations may retain them. This process will reshape entire industries and reframe the nature of work and learning. Companies may rethink their real estate strategy and footprints, new collaboration and teamwork models could emerge, and remote learning could redefine education.
“Technologies that enable remote work and teaming also raise the risk of isolation and loneliness. Organizations will need to balance technology adoption with creative approaches to maintain a sense of community and shared culture. Technologies such as virtual and augmented reality could play a key role,” she said.
More importantly, the next generation born after the pandemic will look at the “new normal” as just “normal”, Fajardo pointed out.
“Generational cohorts are defined by societal changes during their formative years. The children who never knew the world as it existed before the global pandemic will take for granted the transformations following in its wake.
“By 2030, there will be 1.8 billion people aged 19 or younger. These individuals will have little or no experience of a world before COVID-19. Compared with their predecessors, this generation will likely bring very different assumptions and expectations related to society, technology and ethics, and the role of private companies in providing public goods,” Fajardo said.
In their desire to survive, companies must not be blinded by short-term gains, but look at the bigger picture. After all, the fate of their business for years to come will depend on the decisions they will make today.