How to achieve growth through adversity

Last July, when I wrote my blog New normal or new dawn?, I must have wished that, by 2021, we would be writing about COVID-19 in the past tense. Some scientists did warn us, but I am nevertheless a bit surprised to find myself still working from home, keeping social distance and wearing masks. How do others feel about that?

NetEvents, in partnership with research analysts GlobalData, have just released their inter@ctive CIO Round Table Predicting and Preparing for the New Normal – Achievving Growth Through Adversity. When they started planning their schedule, had they perhaps hoped for an end of crisis retrospective on business lessons learned? GlobalData’s Jeremiah Caron, who chaired the Round Table, said it all when he introduced his market data with “It is too early today to speak of the post COVID 19 market; rather, it is a matter of COVID 19 co-existence”.

Invited by Caron to join that Round Table, I can testify that, although the world is still very much in the grip of the crisis, a lot of very sound lessons are already being learned. I described the business world as entering its “Recovery” phase (not be confused with a “Recovered” phase, which would signify the “New Normal”).

Recovery marks the third phase of a sequence: React, Restore, Recover. My personal React Phase began last March when, like most of the business world, I simply had to start working from home. It was a reaction that offered no alternative, but it led towards my Restore phase. This was where I discovered that, yes, it is actually possible to continue business from home. To do that well required: moving business to the cloud, holding meetings online, boosting and securing connectivity and so on. At a personal level, the Restore phase also included my family experience of agreeing on priorities: allocating times and places, and learning to respect each family member’s needs.

Moving into the Recovery phase, we are now finding that some aspects forced onto us by that initial Reaction are actually working rather well. For 15 years I had been spending about 80% of my time “on the business road”, now I am spending so much more time with my family. That might have become an imposition on others, except that – because we are now all required to work from home – there is plenty of mutual recognition of the need for quiet times and un-cluttered spaces (even if the home wi-fi creaks a bit at times!)

As a father, I might have ben worrying that my children were embarking into a very different world than the one I had prepared them for. It is not that I think every student must now drop their chosen studies and switch to IT, but it will be increasingly necessary to be “tech savvy”. So, I am delighted to see my 15-year old daughter following online instructions to set up a security patch on her laptop by herself – without having to “run to Daddy” for help.

I am seeing several sectors that are also well into the Recovery phase. If someone waved a magic wand and banished COVID-19 overnight, we would not rush back to old ways. Home working started as a reaction, but many of our customers have already mandated a downsizing of central office space. Money that would have been spent on real estate is increasingly being channelled into digital transformation – and that is now a widespread global trend according to Jeremiah Caron. As Steve Berez, partner at Bain, pointed out during the NetEvents inter@ctive Round Table: digital transformation is no longer seen as a cost center, it has become a wise investment.

A clear example of such investment potential was presented in August 2020 when Tata Communications announced its Secure Connected Digital Experience’ (SCDx) solutions – expressly designed to help customers evolve from React through Restore towards Recover (into whatever new normal might emerge). SCDx offers three main benefits. The Secure Connected Digital Workplace enables employees – whether working from home, office or field – to co-operate seamlessly and securely while maintaining complete workplace readiness. For B2C businesses, our Digital Customer Experience Platform recreates their in-store experience online, enhanced by next generation commerce and video collaboration solutions for optimal customer engagement. Thirdly, we address the increasingly digital Supply Chain Ecosystem with secure access to core applications and better service to third parties.

All these aspects of collaboration are vital ingredients in our business, and in my case, collaboration has become almost contactless. Perhaps surprisingly, this has actually deepened the collaboration. Where a high-level meeting between busy senior players might have taken weeks to schedule and a flight half-way around the world – for no more than an hour or two – a virtual meeting can be fixed in a few days now. Not only are the conversations richer for that reduced formality, it is quicker and easy to follow them up to resolve any afterthoughts. Multiple companies have noted the increase in productivity from home working.

On the other hand, the ramping up period for product launches or new recruits has extended. Human contact is the most powerful teaching medium – schoolteachers along their students are also finding this under lockdown. A new employee learns so much from simply being in the physical work environment, absorbing impressions minute by minute. It can take so much longer to get up to speed in today’s virtual environment.

An event like the NetEvents December 16^th Round Table is a great opportunity to compare notes with senior players from other companies and industries. What’s more, the initial analyst presentation provides a lot of understanding about what’s happening in the global context. The session has been very well reported by Scott Raynovich in a Forbes article Tech Experts Point To An Accelerated Drive To A Virtual ‘Omniverse’, so I will just add a few of mine own observations here.

Jeremiah Caron began with an interesting comparison between two different responses. The gap between the ‘haves’ – industries such as IT and communications that have flourished during the crisis – and the ‘have nots’ – industries such as live entertainment, insurance, construction and aviation – has already been well reported and is reflected in the annual changes in stock market valuations. One might have expected Automotive, Apparel and Retail shares to devalue in a year of economic shrinkage, but they have all done surprisingly well – Figure 1. His next slide showed the annual change in M&A volumes: a very different picture, one where every industry has been hit hard. The difference, he explained, was that M&A figures are “more an indication of what’s happening now… the mindset was in the moment – and that fell off the cliff.” Whereas stock valuations are more about future expectations – these have been surprisingly optimistic in several sectors – see Figure 2.

Figure 1: GlobalData IT Customer Insights Survey presented on the NetEvents CxO Roundtable Dec 16, 2020

Figure 2: GlobalData IT Customer Insights Survey presented on the NetEvents CxO Roundtable Dec 16, 2020

Figure 3: GlobalData IT Customer Insights Survey presented on the NetEvents CxO Roundtable Dec 16, 2020

Of particular interest to this discussion were the expectations for disruptive technologies – AI, Automation and IoT. Figure 3 shows responses to the question “what percentage of your budget is towards digital transformation?” Kevin Deierling, NVIDIA’s Head of Networking Business Unit, explained that, while digital transformation had already been massively accelerated by the pandemic: “a lot of companies think they are too late… in fact, we are right at the beginning of this transformation… the point here is that every single business has the potential to become an AI accelerated computing business. And it’s not late.”

Another potentially disruptive technology not quoted in Figure 3 is Virtual or Augmented Reality. Ron Abreu, Global IT Director of a manufacturing company, SWM International, explained that his company has invested heavily in virtual reality tools to enable folks to maintain training and factory skills even when they can’t come to a manufacturing site. This was a very interesting development in view of what I had said earlier about the way that contactless collaboration was slowing the ramping up of new recruitment and product launches. Abreu explained that: “Instead of sending engineers to [manufacturing] lines, we have created augmented reality training, using the Hololens glasses.” Hence the point taken up by Scott Raynovich in his Forbes article: the accelerating drive to a virtual omniverse.

Question time to the panel prompted a number of issues. One especially relevant to the enterprise was whether this massive shift to digital transformation might leave behind SMEs with smaller budgets. Steve Berez had already suggested that, whereas IT budgets were increasing overall, for many companies it was “more tactical spending around enabling remote work or increasing transaction capacity for digital transactions” rather than more strategic improvements. So, could the SMEs keep up?

Here the key factor was agility and, as Marvell Semiconductor CIO Adhir Mattu pointed out, migration to the cloud was not only a major saving for smaller businesses, it also further boosted their agility: “We have moved quite a bit of workload to the cloud… I’m envisioning in the next couple of years I don’t want any hardware on prem.” Steve Berez pointed out that, in addition to a flexible, agile technology architecture: “companies have an equal need for an agile, operating model or business system”. Here the relative agility of smaller companies, combined with collaboration and security solutions like SCDx, could indeed give them an advantage in a post-COVID economy.

To conclude this very rich discussion: at the start of 2021, most successful global enterprises stand somewhere between the Recover and Restore phases, but there is enough proof already that it is possible to achieve growth even through this present adversity. If you are not convinced, I certainly suggest that you should listen to this valuable Round Table yourself. The full recording of it is available here.