Inspiration

Business Leaders Must Navigate Digital Transformation To Survive

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Coronavirus Signals Need for Rapid, Lasting Societal Change

As I write this, I am closing out week three of the coronavirus lockdown across New York State. We’re all focused on the immediate impacts, and rightly so. But business leaders can ill afford to overlook the more profound, longer-lasting systemic changes.

Among them is our society’s readiness to accept, let alone embrace, the speed of technological evolution. Throughout human history, our resistance to change has delayed technological expansion and adoption.

Resistance To Change Slows Digital Transformation

In the mid-20th century, as consumers of media shifted their attention from print to television, advertisements evolved slowly. It wasn’t a question of technical capability; early television ads were little more than magazine pages moved to the small screen. Audiences simply had not yet adapted to the new medium.

Similarly, at the dawn of the internet age, early websites were mostly text and fixed images with infrequent instances of blue underlined text. It took years for consumers to warm to the notion of the World Wide Web – a shift from “print on screen” to truly interactive web solutions.

Imagine the mind-bending shift required by even early adopters as they grappled with apps no longer residing on their computers, but living in the cloud.

My own kids stare in amazement at pictures of rotary phones. As dials gave way to keypads, and cordless phones later freed us from our wired tether, the jump to cellular phones seemed much more manageable. Had Steve Jobs introduced the iPhone in 1990 (instead of nearly 20 years later!), would it have succeeded? Was our society capable of the seismic conceptual shift? I don’t believe we were. To be just the right product, a product must arrive at just the right time.

To be just the right product, a product must arrive at just the right time.

— Fred Beer, President, ITX Corp.

When the chasm of digital transformation is too wide, our leap falls short. Societal behaviors haven’t kept pace with technology. Many felt the Newton – a series of digital PDAs (personal digital assistants) developed by Apple Computer, Inc. in the late-1980s and ’90s – was “ahead of its time.”

The bottom line is we weren’t ready to have a computer in our pockets. We needed iterations of cell phones, PalmPilots, iPods, and other personal device technologies to evolve before our attitudes and behaviors were truly ready for the smart phone.

Business Leaders Must Embrace Digital Transformation

The same thing is happening to the digitalization of our businesses. Business leaders’ resistance to change – often masked as comfort in the familiar or fear of the unknown – is the biggest obstacle to digital transformation, which can occur only as fast as our behaviors will accommodate.  

As we’ve seen over the past several weeks, an ominous external force has changed the rules of the game. The coronavirus pandemic and subsequent lockdown have abruptly forced every facet of society to figure out how to use digital technologies: to connect with loved ones, to conduct meetings, to order food and groceries, to attend school, and to live life in the absence of personal interaction.

Business leaders’ resistance to change – often masked as comfort in the familiar or fear of the unknown – is the biggest obstacle to digital transformation, which can occur only as fast as our behaviors will accommodate.

— Fred Beer, President, ITX Corp.

Applying yesterday’s rules, society would have plodded through adoption with all deliberate speed. Coronavirus has dramatically cut our response time, accelerating digital transformation from years to weeks and days.  

Can Society Keep Pace With Change?

Many have said that the coronavirus pandemic is another “9/11 moment,” a sudden realization that our lives, our businesses, and our society will never be the same. Under our current lockdown, we remain sheltered in place, isolated from those we love and those with whom we conduct business.

We will soon learn to at least tolerate working from home. Out of necessity, we will leverage digital transformation to connect virtually to our grocery stores and other retail businesses. Years of practice shifting from physical to virtual retailers may have prepared us for this new world order.

Companies that respond proactively with creative vision will find their way through this; those that don’t will be gone. Business leaders who cannot navigate the digital transformation divide will have their companies devoured over the next 12-18 months. Many will blame their demise on coronavirus, failing to see that the pandemic is merely the catalyst that accelerated the move to digitalization. I think history will prove many to be right on this point.

Organizations that rely on in-person service as their key differentiator are particularly vulnerable. In retail, as shoppers avoid brick and mortar stores and place their orders online, their interpersonal customer support becomes less impactful.

Many will blame their demise on coronavirus, failing to see that the pandemic is merely the catalyst that accelerated the move to digitalization. I think history will prove many to be right on this point.

— Fred Beer, President, ITX Corp.

Managing Business Relationships in a Virtual World

A local retail chain partnered a while ago with a third party to manage home deliveries. As I see it, the chain runs the risk of ceding the customer relationship aspect of their business – which has long been the strength behind their brand – relegating their role to a warehouse and distribution hub. Much has yet to play out, of course. But it is life-changing events like coronavirus, and 9/11 before it, that impact our lives and our businesses in truly significant ways.

Many other examples exist.

  • Professional services industries – e.g., banking, insurance, legal and financial services, etc. – are conducted with real people in local branches with whom we establish trusting relationships.
  • In education, what role is distance learning now playing from K-12 to post-graduate studies – including professional development?
  • In software product development, will videoconferenced meetings continue deliver the short-term effectiveness we’ve enjoyed to-date?
  • Will business leaders in these industries adapt quickly enough to survive the digital transformation of a post-corona world? If they do, what will our new world look like?

Far more questions than answers at this point; the truth is that in a virtual world our agents, advisors, and customers can be anywhere – across town, across the country, or beyond. As client-advisor relationships adapt, we will likely see a change in how advisors work among themselves.

Have a car insurance question? Your agent can just as easily confer with her partner in another city as down the hallway to help answer your question. Clients receive the benefit of the personal connection without bearing the costs of their rep’s distributed staff.

Digital transformation will open markets for buying and selling regardless of location, issue, or circumstance. Soon, if not already, physical geography will no longer serve as a barrier to competition or consumption.

In what ways do you see this rapid move to digital transformation impacting your business? Are you ready? What are you doing today to address this rapid change?

Join the conversation.