As we near the quarter mark of the 21st century, digital technology has seeped into almost every aspect of our lives. We’re surrounded by devices, giving them access to sensitive personal information almost without thinking. Even when you go offline, influences from the internet and social media may weigh heavily on your thoughts.
The digital realm has inundated the real world so thoroughly. It’s almost inconceivable that the same thing isn’t happening within modern organizations. Yet many continue to dilly-dally on the matter of embracing digital transformation.
Organizations aren’t like individuals. They possess significant inertia, resisting change until the last possible moment. And digital transformation isn’t as simple as rolling out system or hardware upgrades. It requires organizational retooling and a culture shift.
Business owners and leaders are likely to defer this issue to some vague point in the future. But the pandemic teaches us that such an approach ultimately risks failure.
The history of weathering crises
No organization today can be completely blind to the benefits of technology. We may not all have data analytics teams, but someone you work with surely knows how to use Excel.
Digital tools simplify our work. They immensely speed up the execution of many tasks while simultaneously eliminating the potential for human error.
Amid the pandemic, myriad forms of technology rose to meet our needs. Teams used apps to collaborate and communicate amid lockdowns. Companies used social media to stay in touch with their audience. And even as consumers grew averse to spending, clever branding opportunities on prepaid cards helped keep businesses in people’s minds.
The importance of digital technology in a recession isn’t limited to Covid-19. History shows us that some companies actually thrive during and after periods of economic downturn. The adoption of digital technology stands out as one of their common characteristics.
Part of this is due to a lower opportunity cost. In times of turmoil and uncertainty, you have less to lose by abandoning tried-and-tested modes of operation. Opportunity also exists when the unemployment rate is high, as companies find it easier to hire workers with a high digital skill level.
However, digital transformation during a crisis also offers far-reaching advantages. It enables better decision-making through analytics. Leaders will be better able to perceive areas for improvement and quickly take necessary action. As a whole, organizations become more flexible.
Dealing with gray rhinos
Even before 2020, studies of past recessions indicated that the next one would be different. In the wake of the Great Recession of 2008, some companies had embraced digital transformation. While it might not have helped them immediately through that crisis, the thinking was clear: better late than never. And it paid off when the pandemic arrived.
There’s a common misconception that Covid-19 was a so-called ‘black swan’: an unpredictable event with disproportionately severe outcomes. On the contrary, though, the factors that made the pandemic so devastating were systemic and plain to see. Experts had been warning about the danger for years, even decades.
An alternative term being thrown around for events like the pandemic is ‘gray rhino.’ This refers to a complex issue that’s out in the open, will eventually need to be dealt with, yet is ignored nonetheless.
Like people, organizations can procrastinate. You might know what it’s like to put off dealing with tasks that are too massive or intimidating until they can no longer be avoided. By then, you’re ill-equipped and under-prepared to get the desired result.
Embracing the digital rhino
The search for a vaccine may have ended, but the impact of Covid-19 continues to be felt around the world. It may take years before we recover, and the next shock could always be just around the corner.
The issue of digital transformation needs to be recognized for what it is: a gray rhino. Organizations daunted by the task’s complexity or scale must realize that it can’t be put off indefinitely.
Embrace the digital gray rhino, and you immediately improve your prospects concerning the next potential crisis. Organizations become data-driven and agile, no longer reliant on a central authority to make critical decisions.
The current period of uncertainty and instability can be a blessing in disguise, making this transformation easier to achieve. It’s time to take a step back, away from day-to-day operations, and define your digital-first strategy and goals. Get everyone on board and aligned with what needs to be done, and you’ll be able to explore new capabilities ahead of the next disruption.
