COVID-19 has up-ended the global economic landscape, leaving businesses scrambling to rapidly transform their operations to adjust to this ‘new normal.’
Businesses that navigate this seismic shift well give themselves a critical edge in the uncertain economic conditions immediately ahead.
However, the implications of COVID-19 cut much deeper than the immediate and most apparent trend towards remote working, with behaviour, expectations and requirements set to continue to evolve over the longer term.
Farsighted and innovative companies have begun accelerating their adoption of digital solutions across an array of operations and services to preempt anticipated long term trends.
So how well are Australian businesses placed for the longer term, as we lurch further into this brave new economy?
The short answer – we could be doing a lot better.
In terms of digital change, an MIT study reports that only three percent of Australian firms are future-ready for ongoing disruptive changes.
Let’s explore 5 lessons learnt from businesses that have accelerated successfully amid the pandemic and how these lessons can be applied to the new post-COVID economy stretching ahead.
- The ability to be bold rather than just applying a digital lipstick solution is critical. Research from McKinsey Digital has stated that 46 percent of the top economic performers have adopted entirely new digital offerings by applying a ‘design thinking’ process. To draw upon an example, the Australian health care system has gone through drastic changes, by adopting telehealth digital solutions to connect to patients during a time of need. The Fiona Stanley, Fremantle and Rockingham hospitals implemented telehealth solutions in under six weeks, which has seen a 600 percent increase in video calls.
- Reviewing multiple sources of data on a weekly basis to evaluate the shifting needs of the customer and business partners – as well as your own performance. Research from McKinsey Digital has shown reallocation and testing digital solutions have gone from quarterly discussions to weekly decisions. To draw upon an example, Dyson applied agile methodologies and external partnerships to design and deliver a new, sophisticated medical product in 10 days.
- Endorsing cross-function collaboration, as the current complex problems can only be tackled when teams across disciplinary and organisational boundaries work together. Research from Accenture has demonstrated that cross-function teams obtain revenue 4x higher than other firms, as each function builds in concern with, and on top of, the value created in other functions. To draw upon an example, more than 1,500 Subway restaurants in the US are turning into makeshift grocery stores, selling restaurant ingredients as a fast way to obtain groceries without entering a supermarket. This required Subway to collaborate across internal departments, franchise owners, technology providers and consumers within a few weeks.
- Clear communication is critical for leadership to provide decisive direction and support among employees during uncertainty. Research from MIT found communication as one of the top five reasons why companies struggle with digital transformations. Poor communication was not an issue for Fitness Playground as they were able to turn physical gyms into impromptu production studies in 5 days – the Netflix for gyms. This requires clear communication with gym members, trainers and gym owners to ensure they feel supported and understand the impact on their responsibilities.
- Endorsing open innovation has the potential to increase the potential for value creation, allowing many more people to contribute to the solution. As leaders in open innovation explain, it can reduce costs, accelerate time to market, increase differentiation in the market and create new revenue streams for the company. To draw upon an example, Ford is working together with the United Auto Workers, GE Healthcare, and 3M to build ventilators in Michigan using f-150 seat fans, portable battery packs and 3D printed parts.
These five lessons have allowed firms to rapidly identify problems, implement a minimal viable product with external firms and scale genuine solutions within weeks.
The principles of these lessons can be applied to Australian businesses of all types and should be urgently considered as we are thrusted further into this brave new post-corona economy.
People’s behaviour, expectations and requirements are drastically changing to accept new digital alternatives at an accelerated rate and it’s critical organisations respond and adapt to this ‘new normal’ and meet the changing trends ahead.
Geoffrey Mann is an industry innovation advisor and RMIT sessional lecturer in global business and digital strategies.