Are Digital Organizations Better at Overcoming COVID?

Government leaders rushing to contain the COVID-19 pandemic in March gave companies little time to shift to an all-virtual workforce. Ready or not, many businesses had to become more digital.

But true digital transformation takes far more than a Zoom account. Using everything from virtual supply chains and people analytics to artificial intelligence-based models and automated biotechnology research, organizations further along the digital curve are responding differently than those still wondering how to evolve. The digital technology embedded throughout their operations gives them a unique advantage.

With that in mind, we asked faculty associated with Harvard Business School’s Digital Initiative how technology is setting the most successful organizations apart during the coronavirus crisis. Here’s what they said:

Lauren H. Cohen: Leading companies use technology to be more nimble

It pays to be nuanced here. A large portion of the challenges facing businesses are industrywide (and worldwide). For instance, hotels have government-imposed limitations on the services they can offer. These restrictions bind equivalently for the most, and least, technologically advanced hotel in the industry.

That said, technology will be most powerfully utilized during the pandemic by those firms who apply it organization-wide to create more nimble, efficient organizations, more capable of managing the factors of production (e.g., labor, capital, supplier inputs, etc.). These firms will emerge as the long-run winners, and those firms that count their future in decades, instead of months or years.

Lauren H. Cohen is the L.E. Simmons Professor of Business Administration.

Shane M. Greenstein: Robust infrastructure helps companies scale faster

 

To begin, some part of this crisis can’t be solved by technology, no matter how good. Anybody in retail or entertainment or education has a difficult situation to handle. Anybody delivering medical services faces an entirely different and unprecedented set of problems.

For business that remain open, an old canard applies: Nobody notices information technology until something breaks. This crisis required rapid and large reallocation of modern information technology, with particular links to communications. Some of it broke.

The best organizations have had the ability to expand existing capacity because the technology did not break under the strain. They had a robust configuration that enabled new purposes, new software deployments, and new coordinated routines across teams.

The best can use this as an opportunity to experiment and learn where technology can deliver service or enable more flexible work arrangements.

Shane M. Greenstein is the Martin Marshall Professor of Business Administration and co-chair of the HBS Digital Initiative.

Ayelet Israeli: Technology can’t succeed without ingenuity and adaptability

 

I don’t think it’s about technology. I think that leadership, agility, adaptability, compassion, and ingenuity will set the most successful organizations apart. State of the art technology will not be successful in response to a crisis without these additional components.

With them, organizations will figure out how to leverage technology (not necessarily their own) to achieve their goals.

Ayelet Israeli is an assistant professor of business administration.

Ariel D. Stern: For leaders, digital tools expand and enhance services

 

Some of the most successful organizations will use digital technology not only to replace services that were previously provided but to augment and expand their offerings.

Telemedicine is a terrific example of this. Many health care providers have already moved to virtual visits and ramped up new types of services such as remote-patient monitoring using connected digital tools.

Ariel D. Stern (@arieldora) is the Poronui Associate Professor of Business Administration.

David B. Yoffie: Software can ensure stability in turbulence

 

Marc Andreessen famously said about a decade ago that “software is eating the world.” For most technology-intensive companies today, that prediction proved prescient. For software-focused organizations, there should be fewer layoffs and product delays.

While declining demand will remain challenging for everyone, social distancing can be achieved because disperse teams can build and distribute software from remote locations around the world. The massive productivity losses that are afflicting most companies today should be relatively modest in organizations that build and manage their businesses around software.

David B. Yoffie is the Max and Doris Starr Professor of International Business Administration.

About the Author

Danielle Kost is a senior editor at Harvard Business School Working Knowledge.

[Image: Korrawin]

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What role is technology playing at your company during the COVID-19 crisis?

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