In the last decade, and particularly during 2020, businesses have had to find new ways to win in the face of extraordinary challenges. What’s become clear is that organisations that embrace digital transformation head-on have greater success—and show greater resilience—in the face of adversity.
A recent study from IDC showed that “digital-first organisations are twice as profitable and deliver eight times the revenue of their non-digital peers in the industry.” Additionally, IDC states that 80% of CEOs now feel they must deliver some form of digital transformation and it’s at the very top of their agenda.
A Workday global survey, “Organizational Agility At Scale: The Key to Driving Digital Growth,” found that over one-third of firms now expect 75% or more of their revenue to come from digital efforts in three years’ time. Consider that this percentage has tripled since 2019, when just one in 10 firms had the same projection.
While expectations for digital revenue growth continue to rise, how do businesses accelerate their digital efforts? Workday’s research found that organisations that responded fastest to the pandemic are more likely than others to have embraced agility by embedding things such as data accessibility and cross-functional collaboration.
At Workday’s Conversations for a Changing World digital event, Carolyn Horne, president, EMEA, Workday, spoke to Dr. Michael Kranz, CIO, Thyssenkrupp Steel, on how the business has placed digital at the core of its operations, helping it pivot, respond, and recover faster during periods of uncertainty and persistent change.
Describing the decision to accelerate digital at his organisation, Kranz explained, “We invested early in digital and it is a key part of our strategy, including business, culture, and technology. Technology transformation was about moving from legacy systems to more integrated platforms. On the culture side, we established a digital pioneers program combined with a digital lab. But, first of all we needed to establish new digital services and optimise customer relationships. We’re striving to create a digital mindset for all of our 27,000 employees.”
While COVID-19 has impacted many industries in different ways, one commonality is that its impact has accelerated digital transformation and exposed a clear divide between companies that were already investing in digital operating models from those who haven’t. Workday’s research asked more than 1,000 business leaders (C-suite or their direct reports) whether they were equipped to respond to the COVID-19 pandemic at speed and scale. The answers to this one question identified two groups and their ability to react: the “fast responders” (73%) and the “slow responders” (27%).
Thyssenkrupp Steel has faced a number of challenges throughout the pandemic. The role of digital in driving agility and resilience during this time were absolutely key. “We were forced to move more than 3,000 people to remote working overnight. But our production facilities require an onsite workforce, so we had to establish hygiene concepts and also remote access to local systems at the same speed. This has been a huge task, but our systems and processes have allowed us to meet the demands of the health crisis,” said Kranz.
“At the same time there were economic factors at play. We needed to work on cost savings and explore how we could scale back our project portfolio. This had to happen quickly,” Kranz explained. “There were some organisational changes, which required us to change our internal processes and move away from working in organisational silos. By May 1 , we had managed to reorganise the company. Our leaders had to meet their peers virtually, and navigate their new organisation digitally.”
“The crisis has forced us to focus even more on our strategy execution. We now have much more of an understanding of what we are and what we want to be."Dr. Michael Kranz CIO Thyssenkrupp Steel
The shift to a more agile way of working is pivotal if businesses are to thrive in the changing world of work. Reemphasising the importance of breaking down management and employee silos, Kranz focused on the need for better collaboration and engagement of key functions, such as business and IT.
“We come from an organisation that has traditionally put daily business execution on one side and program and project management on the other. That creates a lot of noise and means the business must often refocus and reprioritise resources to be truly effective,” Kranz said. “Our goal is to bring business and IT together to collaborate in a more agile way. We’ve put in place cross-functional teams that work together for one month with a focus on achieving a specific goal. If you allocate all your resources in that way, the results are fixed tasks for only four weeks, then you review and plan for the next four weeks and reshuffle your resources as needed.”
While COVID-19 and its impact have been felt by businesses across the globe, for many organisations, including Thyssenkrupp Steel, it has forced them to build new levels of resilience. Kranz believes this has accelerated the rise of digital and more efficient ways of working, but still demands bravery from business leaders.
“The global crisis changed the dynamic of the C-suite. And maybe the letter C also stands for ‘Courage’. The crisis has forced us to focus even more on our strategy execution. We now have much more of an understanding of what we are and what we want to be. Collaboration has developed strongly, even if we are still fighting the impacts of the economic downturn.”