While the COVID-19 pandemic may be a health crisis and shock to the system, it is driving the rapid adoption of digital technologies and ways of working needed for companies to stay relevant, according to Scott A. Snyder and Yulia Barnakova, co-authors of this opinion piece. Snyder is a senior fellow at Wharton and partner, digital and innovation, at Heidrick & Struggles. Barnakova is a principal, digital and innovation, at Heidrick & Struggles.
When the Mosaic browser, with its consumer-friendly interface, was released to the world in 1993, most had no idea how radically this first foray into the internet era would transform our lives – both personally and professionally. As humans, we are generally poor at detecting and acting on early signals of change. And as business leaders, we do not fare much better. Most companies were late to the party on PCs, eCommerce, Smartphones, digital payments, the sharing economy, Gig work, AI, and now virtual ways of working. And it’s not for lack of trying. Last year, companies spent nearly $1.2 trillion on digital transformation, according to research by International Data Corporation. Yet only 13% of leaders believe their organizations are truly ready to compete in the digital age.
Enter the COVID-19 crisis. While it may not be a welcomed shock to the system, it is driving the rapid adoption of digital technologies and ways of working needed for companies just to stay relevant and continue to operate. Not only has the stock market experienced a historic drop in value, but companies have had to dramatically change the way they operate amidst a social lock-down.
This also includes servicing customers in new ways. If you are a bank, you now have a surge in digital banking users. If you are a healthcare provider, telehealth visits are way up. If you are a retailer or restaurant, online ordering and delivery are keeping your business afloat. Companies are also having employees work remotely wherever possible.
For some segments of the workforce, especially tech and sales, this is natural and a relatively easy transition. For others, this is a painful leap from a traditional physical work environment, with regular face-to-face contact, into a new digital domain, requiring consistent, proactive efforts to maintain connection. This also puts enormous pressure on internal organizations like IT and HR to ensure the technology capabilities, workplace policies, and organizational processes are adapted to this new environment. As companies scramble to provide training on digital tools to their workforce to make this shift, all leaders are being put under the spotlight in terms of their own digital readiness.
Fortunately, the groundwork for virtual collaboration has been laid by our use as consumers of apps like Facetime, Google Hangouts and Skype. The path for workplace messaging solutions like Slack, Teams, and Jabber were already cleared by our voracious appetite for texting, as well as platforms like Whatsapp, Facebook Messenger, and WeChat. And now social virtual reality platforms like Mozilla Hubs, AltspaceVR, and Rec Room – historically used by the gaming and entertainment community – are quickly moving from the living room to the virtual conference room, enabling highly immersive professional interactions for those willing to plunge in.
Yet, even with our head start with virtual interactions as consumers, many leaders are still finding wide gaps in their own capabilities, realizing they must rapidly raise their digital skills to be effective in this fast-changing environment. So how can leaders shift behaviors, mindsets, and ways of working in such a short period of time – both for themselves and their teams?
The Headwinds to Rapid Transformation
To understand the pathways to rapid transformation, we first need to know what stands in the way.
Thinking “digital” is someone else’s job. The first barrier is thinking anything “digital” is owned by others – like IT, those with “digital” in the title, or even a new executive formally tasked with “digital transformation.” The reality is that every part of an enterprise is impacted, and every leader can be an amplifier or blocker of digital adoption. If leaders do not see how digital technology and ways of working translate to their role, there is little hope for sustained impact from transformation efforts – and for their ability to drive success in the future. The table below shows how every functional leader has a role to play in shaping digital adoption for their organization.
The Role of Different Leaders in Digital Acceleration
Chief Financial Officer Leverage AI-based tools like RPA to streamline financial processes and contribute to the company’s data advantage
Chief Information Officer Ensure the IT systems and processes are supporting and driving new and improved ways of working for the business
Chief Human Resource Officer Strategically plan out the workforce of the future, including securing critical digital-focused roles like data scientists and machine learning experts
Chief Learning Officer Develop digital skills, including data literacy, across the organization to support transformation and ensure a robust pipeline of leaders for the future
Chief Marketing Officer Deeply understand customers’ evolving digital-first preferences and help shape step-changes in their experience with the business
Chief Operating Officer Ensure the organization can flexibly adapt systems and processes to support new and evolving ways of working
Chief Legal Counsel Stay on top of new rules and regulations related to emerging technology and proactively shape the organization’s policies and guidelines accordingly
Chief Data Officer Develop strategy for harnessing data as a competitive advantage, organize and prepare data assets to unlock the benefits of automation and machine learning.
Waiting for everything to be perfect to act. If this current health crisis has taught us anything, it is that inaction has a price. The same goes for organizations that fail to move ahead to deploy digital tools and operating models as minimal viable solutions with room for employees to dive in and evolve how they use these solutions over time.
Thinking digital is only about efficiency versus enabling innovation. Organizations need to foster the right culture and mindset to encourage experimentation, failure, and learning around new digital operating models and experiences along with the process, tools, and coaching on how to innovate. Otherwise, great ideas from your employees will get crushed under the weight of corporate machinery, especially a company in short-term crisis mode. As a result, you may only focus on using digital to reduce cost during the crisis and miss the opportunity to generate novel thinking and opportunities that could deliver advantages for your company as the market rebounds.
Critical Skills of Digital Leaders
To overcome these headwinds and thrive in today’s extremely dynamic, uncertain environment, leaders must turbocharge their skills for the future. They must become what we call digital “triathletes,” playing a unique three-part role of digital strategist, innovator, and driver – to be able to navigate and thrive in fast changing digital world.
While all triathletes are better at some events than others, they must train and develop proficiency in all three to stay in the race. Similarly, digital triathletes will naturally have unique capability spikes, but a solid level in all three elements as described below.
Digital Strategist: Stays ahead of emerging trends and technologies, experiments with them personally where possible, and finds ways to apply them to drive transformative change for customers and/or business operations. The Strategist role is critical for envisioning the future and developing a path to winning by creatively leveraging technology.
Digital Innovator: The Innovator role is central to disrupting the status quo and moving the organization toward the vision for winning in the future. This role helps their teams overcome legacy mindsets and ways of working, as well as finds ways to harness the company’s legacy assets like data to build a long-term digital advantage.
Digital Driver: Builds trust and collaborates across the organization with diverse stakeholders to enable rapid action. The Driver role ensures that once the vision is set, and the status quo disrupted, that innovation initiatives are executed quickly. This role is also responsible for building talent to enable execution for the future and broadly across the organization.
At the core of the digital triathlete is agility – the ability to rapidly pivot as the market changes, shed old mindsets, and voraciously keep learning about new technology and ways of working for the future.
The demand for digital triathletes has always significantly outpaced supply. Even before the crisis, only 9% of executives strongly believed their leaders had the right skills to thrive in a digital economy. Now such leaders are even more sought-after, as companies try to survive these unprecedented times.
Knowing what skills are needed and why it is so critical to rapidly hone them will help leaders set the pace and build a sustainable digital advantage, securing their own – and their company’s – long-term success.
A summary of this future competency model, Digital Dexterity, is shown in the table below:
Strategic Foresight Stays abreast of disruptive market trends and translates into new business opportunities
Customer Focus Constantly pursues and designs customer-centric, innovative solutions
Visionary Leadership Develops a bold vision for disrupting the status quo, linked to a higher purpose with societal impact
Innovation Enablement Encourages experimentation and risk-taking; values creative efforts to drive innovation
Talent Ecosystem Development Cultivates and leverages a flexible network of talent and resources within and outside of the organization
Data Literacy Highly skilled at shaping deep insights from data; applies a data-driven approach to decision-making
Strategic Collaboration Actively develops relationships and seeks collaborative input from diverse stakeholders across the organization
Change Leadership Drives change through the organization through clear and compelling communication and influencing key stakeholders
Rapid Execution Ruthlessly prioritizes, drives rapid action and makes swift decisions delivering innovation initiatives
Adaptability Swiftly adjusts amid ambiguity to the constant change in the innovation landscape
Learning Orientation Consistently seeks to upskill self and team, leverages digital learning experiences and platforms
Growth Mindset Bounces back from setbacks quickly, encourages learning from failures on the team
Becoming a Digital Leader
Like typical heart patients who fall back to their old habits after going through by-pass surgery, many leaders will revert to their old ways of working after the COVID-19 crisis subsides and businesses begin to ramp up again. But leaders who see this as an opportunity for lasting change will seize the window to train harder and build their own digital dexterity.
Below are some key strategies to accelerate this set of skills amid today’s period of extreme stress and volatility.
Use scenario planning to anticipate both short and long-term shifts — Amidst the crisis, every business will be presented with unique challenges – but also opportunities – to leverage technology to unlock new opportunities around customer experiences, products, and operations. Using a scenario lens can help companies make more balanced bets vs. overweighting on the near term, as well as embed more optionality into their strategies to pivot quickly with market changes.
Leverage data and predictive analytics to help monitor and see early signals of change — The Canadian health monitoring platform BlueDot scours news reports and airline ticketing data to see early signs of possible outbreaks or unusual events. Through its natural language processing and machine learning algorithms, it was able to identify the COVID-19 outbreak early, alerting its government, business, and public health clients of danger zones like Wuhan several days before the WHO and CDC.
Launch organizational experiments with emerging technology — Capitalizing on the user-friendly Oculus Go virtual reality headset released in 2018, Walmart was one of the first organizations to use VR for large-scale employee training, ordering 17,000 headsets to use across its locations. This investment in trying new technology is now paying extra dividends, as the organization has much more comfort with VR, which is now gaining massive traction as a more immersive virtual collaboration tool.
Raise your own digital game — Randall Stephenson, CEO of AT&T, believes that the knowledge and skills lifespan is very short. “Mine is two years in duration, max. I’m constantly retooling myself,” he says. Now is the time to become well versed with all the advanced features of your current virtual collaboration platforms, for instance, as well as find new virtual tools to try with your teams to stay better engaged and connected.
Get creative with serving your customers virtually — The crisis has spurred incredible innovation with how organizations continue to stay connected to and serve their customers virtually. We have seen Skype-based courses, Zoom art classes, virtual team building workshops, and Periscope jam sessions become increasingly popular. This physical-to-virtual translation often requires teaming those with expertise in digital ways of working with those who have the subject expertise and institutional knowledge. This allows the team to creatively translate traditional solutions into virtual ways to engage with and continue to deliver value to customers.
Empower your employees to innovate and co-create — Companies like Mastercard and Enel view innovation as a competency that all employees can develop and provide the pathways for these employees to quickly move concepts into experiments and learning or impact across the enterprise. This includes having leaders make innovation a priority and giving employees and teams the time and space to collaborate, experiment and learn with new digital tools like virtual reality, machine learning and automation. It also means allowing them to find creative ways to innovate and provide support amid the crisis, as we have seen with several distilleries and cosmetic companies innovating and pivoting to produce hand sanitizer for their communities.
Focus on shifting the mindset and culture to clear the path — Without changing the hearts and minds of the organization and helping all employees see themselves in the new digital version of the company, it will be hard to drive lasting change, even on the back of such as monumental crisis like COVID-19.
This is an opportunity for leaders to set the example by embracing the current situation as an opportunity to reinvent themselves as digitally aware leaders and help their teams see the opportunity amidst the chaos. This will help every leader, no matter where they sit, realize that being a triathlete and building digital dexterity is more than just physical training. It’s the mindset to win under any conditions. Even this one.