The past year has ushered in unprecedented change driven by the COVID-19 pandemic, both in how we work and live. Businesses across all industries have had to rapidly and drastically transform their processes and operations as a matter of survival. While these changes were often implemented as temporary means to cope with the crisis, many of them are now delivering real value to the organization, better positioning companies to compete and win in the new normal. The challenge IT leaders now face is making these beneficial fixes stick.
We spoke with members of the C-suite in 20 companies across multiple industries, ranging from startups to multibillion-dollar global titans, to gain insight on how they responded to the crisis and what their concerns are for thriving in the emerging new normal. Though the pandemic impacted each company differently, several common themes emerged from our conversations.
First, the COVID-19 pandemic has rapidly accelerated digital transformation of data and business processes across the entire value chain. Cloud capabilities have been central to this acceleration, with companies that invested in cloud services before the pandemic gaining significant advantage. Changes in technology adoption that used to take years now took months because of the robust nature of cloud technologies and agile ways of working adopted to weather the impacts of COVID-19.
Second, while technologies such as Zoom grabbed headlines, the biggest changes under COVID have occurred in company operating models and organizational culture — changes that have upended long-standing beliefs and norms about how work gets done and how organizations are managed.
Lastly, accelerated digital and operating model transformation, while borne out of necessity, has created new sources of value that include brick-and-mortar cost savings, reduced travel expense, and to the surprise of many, higher workforce productivity and employee engagement. As one participant put it, “We got a surprise COVID dividend.”
But how to ensure this dividend — and the beneficial changes that fuel it — persists? Based on our discussions and experience, we believe there are four key actions CIOs should take to lock in the value these changes have produced.
1. Maintain and accelerate investment in digital transformation
The pandemic has demonstrated the power of technology in enabling transformational change in how we work and serve our customers. CIOs have the opportunity to draw on this experience and lead the company in its efforts to keep the pedal on the gas of digital transformation by targeting future investment to those areas that best enable the organization to compete in the new normal.
Funding will continue to be challenging for companies whose business has been depressed by the pandemic. This makes it even more important to also drive cost reduction in IT spend in order to fund future investment and shift dollars from “run” to “grow.”
For example, though most companies lowered overall investment levels at the start of the pandemic, Anne Mullins, chief digital and information officer at Corning, like many IT leaders, convinced her peers to maintain their commitment to digital transformation initiatives.
“At Corning we are continuing to fund our digital transformation initiatives while also continuing to attack IT cost reduction opportunities; both to fund the digital initiatives and to shift the distribution of IT spend from run to transform,” Mullins said.
2. Fundamentally transform how IT leads and manages its workforce
The pandemic required IT leaders to quickly move from leadership styles and structures intended to manage risk through oversight and control to styles and structures that enable speed and adaptability. Despite this shift, risk was still effectively managed and old paradigms around control were proven false as empowered employees rallied to get the work done.
Going forward, CIOs should make these temporary changes stick by formally adopting a leadership model that expects and enables IT leaders to focus on boundary setting (vs. controlling); breaking down barriers in structure and governance that inhibit speed, adaptation, and experimentation; and helping challenge the status quo to drive new ways of thinking and working. This will require CIOs to take a hard look at whether they have the right stable of leaders throughout IT’s ranks who can lead and manage in new ways.
As the pandemic took hold, many IT leaders adopted what Linda Jojo, chief digital and information officer (CDIO) at United Airlines, described as the “scrappy manifesto.”
“For United, this involved establishing and empowering small teams to address critical operational challenges ranging from end user support requirements to the virtualization of United Airlines’ Network Operations Center,” Jojo said, noting although the productivity levels achieved were not sustainable, the scrappy manifesto lives on within her organization and provides a lesson on the power of shifting leadership focus from planning, organizing, and controlling to boundary setting, barrier busting, and challenging the status quo.
3. Make temporary changes in operating model and culture permanent
IT functions made significant modifications to their operating models beyond leadership style and structure in response to the impact of COVID-19. Most important were changes that moved from traditional ways of developing/deploying and managing technology to those that:
- Adopted and embraced Agile and DevOps ways of working
- Modified governance to push decision-making down to smaller empowered teams
- Held these teams accountable for outcomes versus activities
We believe CIOs should make these changes permanent by formally adopting these practices and processes, educating their workforces to scale Agile and DevOps capabilities, and reinforcing these principles through formal and informal means of organizational and individual performance measurement and rewards.
Greg Myers, CDIO at Syngenta, noted that COVID-19 provoked him to rethink the ratio of staffing involved in large core initiatives versus small, localized needs that he intends to sustain beyond the pandemic.
“I started to sponsor small independent teams that were able to quickly drive several creative solutions necessary to quickly adjust our operations and create value during the pandemic,” Myers said. “I intend to sustain this practice post-COVID.”
4. Make informed choices about what work stays at home and what work returns
The pandemic forced most everyone in IT and many other functions to work from home. Now that we see light at the end of the tunnel as a result of changes in behaviors (e.g., social distancing and masks) and the rollout of vaccines, many organizations are contemplating bringing their workforces back into the office. We believe CIOs have an opportunity to set the example for how to make these decisions, especially given the reality that WFH has radically transformed the war for technical talent.
Bijoy Sagar, CDIO at Bayer, for example, highlighted that only roles that must be physically tied to the work they perform will return to previous pandemic norms within his company.
“We are leveraging our recent experience from the pandemic to actively experiment with, and evolve to, new hybrid operating models,” Sagar said.
In devising return-to-office plans, CIOs should avoid making arbitrary decisions to bring people back to work based on cultural norms and antiquated beliefs regarding productivity and risk. Instead, they should direct the organization to take an in-depth look at whether the work that needs to be done truly requires proximity and interaction or if it can be done virtually or in a hybrid manner (office days, home days based on what work needs to be done). Doing so will broaden their potential pools of talent for roles than can be remote or partially remote; increase employee engagement and productivity, giving workers more control over work-life balance; and reduce brick-and-mortar expense that can be redirected to higher-value IT investments.
Cashing in the COVID dividend
Though none of the actions listed above are easy, they provide important lessons on what it takes to digitally transform. COVID-19 forces companies to look beyond digital investments in isolation and recognize that digital transformation requires changes to operating models, organizational structure, management metrics, and culture. The crisis has also revealed the significant value potential of digital transformation as well as the single biggest roadblock: leadership’s will to change.
The challenge before CIOs breaks down to this: Will you make the adjustments stick, by continuing to accelerate digital investments and maintaining newly devised ways of working that facilitate advantageous operations, or allow your competitors to beat you to it?