COVID-19 Forces Companies to Rethink & Digitize
COVID-19 disrupts society, people & companies and forces companies to rethink how they organize and digitize to remain in business. For many companies and their leaders, the COVID-19 virus pandemic is a crisis unlike no other in recent times, these are the most challenging VUCA (Volatility, Uncertainty, Complexity & Ambiguity) times our generations have known, and they happen at a global scale.Authors: Günther Lemmens & Sonja Noben
The humanitarian impact makes both customers and employees radically change their behaviour. This creates a high level of uncertainty for many companies. They are struggling to keep their business up and running and at the same time to keep their staff in good health.
With social distancing as the new norm, remote & distributed agile/new ways of working, digital capabilities and simple, efficient processes & governance at a distance have become real imminent challenges.
Now is not the time for companies to freeze but to move forward, decide with speed and execute upon decision.
The COVID-19 pandemic brings our society and economy in a crisis that we did not experience before Günther Lemmens
The employee of tomorrow will embrace remote
In the same way as employees also, many customers will change their behaviours because of the COVID-19 pandemic. Customer contacts that today are run by business models that heavily rely on face-to-face interactions will be more avoided. More and more customers will seek digital channels to pull in products and services. At the same time, at their need, they will pull for complementary human services.
Many companies initiated digital evolution and started to create digital channels complementary to their historical successful face-to-face channels, tomorrow that balance will invert rapidly. Digital channels will become first-level access points, and the face-to-face interactions will now become the complement. At the same time that face-to-face interaction will undergo a drastic shift towards remote servicing as a response to the social distancing need of the customer.
Keeping and creating a connection with customers is critical for survival and growth. Companies that want to be successful in the post-pandemic era must shift from digital evolution towards the digital revolution.
The customer of tomorrow will prefer remote and digital
Traditional employee-to-company interactions become challenging to maintain. Many managers are forced to delegate more autonomy to employees too rapidly. However, when these employees do not have a reliable network of agile teams in which to organize work, their engagement will reach an all-time low, and productivity impact might be gigantic. This is especially true when they do not have the right motivating connection with the company,
Those having an agile network to fall back on do have the advantage. The agile habits and behaviours will help them to collaborate with their team and the rest of the organization. The challenge here is to transfer the value in the physical interactions of agile ceremonies to a remote context. As a company, you will need to create additional digital capabilities for remote collaboration.
This investment will not just be temporary. While people will undoubtedly rejoy meeting their colleagues again on the company’s floor after the COVID-19 lockdown, at the same time fear is injected in society. The pandemic will make proactive social distancing the new normal and will increase the desire of employees to work more remotely than before.
People are a company’s key enabler for success, and true leaders will now move forward with speed to foster the enablement of the workforce. Only setting hard objectives and the follow-up through control is about management but not about leadership.Inspiring leadership has many faces. It means leading people forward, putting the customer in the centre of attention, deciding fast, and creating alignment through transparency & clear communication. Those who inspire can lead the change towards company-wide agile operating models, enabling organizations to deliver new customer features and innovations with speed.
Not just any digital strategy will do to be a winner tomorrow
Many companies have used digitalization primarily for reasons of cost efficiency: pushing the customers to digital channels to avoid as much as possible costly human interactions (examples are digital billing or online forms avoiding paper handling, postal costs and administration). These digitalization strategies are inside-out, cost-efficiency driven strategies. They are often characterized by a functional optimization (standalone departments optimizing their functional area) and deliver limited benefits for customers. Rarely these initiatives have created a real competitive advantage. Instead, they are just keeping the basics up to date.
When companies want to create substantial customer impact and benefits that generate the goodwill of the customers for the products and services of the company; when companies want to create a perspective for customer base growth, they must adopt outside-in driven digitalization strategies.
These customer-driven digitalization strategies aim to create high customer engagement. They move from purely transactional business models towards more relational, collaborative and participative models.
One should leverage on the new behaviours of the customers that are always connected, always mobile. Even more so in and after these pandemic times! Use that customer ecosystem as a starting point and initiate interactions, conversations, offerings to nurture the relationship with the customer. Through this relationship, customers will start pulling products and services, generate new business through their social networks.
Inside-out digitalization is creating the necessary foundation to keep doing business. Outside-in digitalization is the necessity to grow business and remain successful.
New rules for companies that want to realize a digitalization strategy
There are two necessary changes required to speed up the digitalization & innovation strategy in these VUCA times:
1. Strong leadership and a high rate of decisions
Traditional decision processes tend to pivot around business cases and milestones discussions looking for certain levels of perfection. In VUCA times, perfect equals too late.
A real digital innovation strategy is a question of relentlessly discovering the opportunities with potential and decide with speed. Seize the momentum of good ideas and win customers.
2. Business agility and higher speed of delivery
Digitalization driven by the function hierarchy is deemed to be suboptimal and rarely customer-centric. Digitalization is limited to the responsibility of the department that owns the function. Customer value, on the contrary, is created company-wide and even more extensive across the customer ecosystem.
To deliver with speed, companies need a cross-functional, agile-lean customer-focused network of people that cover end-to-end customer journeys and value streams. In agile teams, all the necessary competencies that are required to deliver end-to-end value are combined.
They can define, develop and deploy customer-driven changes & innovations in cadence and in short cycles, thereby creating continuously new customer value and engagement.
This agile network model will deliver continuous high value through a scaled operating framework that guides the agile decision processes on speed and continuously synchronizes and improves the deliveries from the agile teams and release decisions.
We at DigitalScaler believe that the COVID-19 pandemic will accelerate the agility and digitalization transformation speed of many companies to stay competitive and to continue to engage with their customers tomorrow.
First, it will be a matter of survival – get through the most intense VUCA period through experiments with technologies and new behaviours to ensure continuity of business. Next, we will awake in a new normal where proactive social distancing, remote working and buying behaviours have become part of our culture.
Companies wanting to be successful must adopt drastically and with speed the new normal for customer–to-company and employee-to-company interactions:
- Managers at all levels need to become leaders that invest in keeping the engagement of their employees and lead the change to agile collaboration models at scale, to be able to decide & deliver with speed.
- An outside-in customer centric digitalization strategy continuously delivering the right innovations that generate real customer value will be the prime differentiator to keep the engagement of the customers.
DigitalScaler has the experience and expertise to help your company in the surviving and growing in the new post-COVID-19 normal. We define and lead with you the right customer-centric digitalization and business agility strategies for your company to compete and thrive in the digital world.