Pandemic Generosity and Digital Transformation

Bernardo Crespo, Academic Director of the Digital Transformation Executive Program at IE Business School

Over the past few days, we have discovered the generosity of companies such as Microsoft, which has given away Ms Teams temporary free licenses to educational institutions; Alphabet’s subsidiary Verily, which is facilitating diagnostic testing for residents of California; and even Facebook, whose CEO has allowed the World Health Organization to run free ads on the social network. These are the most valuable companies on the planet and every gesture counts in these times of great emotional exposure.

Once the ongoing crisis is gone, we will find out whether companies that are less tech-oriented have learned something about what it means to mitigate a crisis—not, in this case, a gigantic war, but a miniscule microorganism that forces us to close  borders, blocks food distribution, and suffocates retail businesses. Perhaps now we have to reorient the focus of digital transformation towards mitigating pandemics. And yet, there is a gray area along the way.

Gray area

Whenever we have spoken of digital transformation, the subtext seemed to be that digital technologies were the force that was disrupting markets—that data and technology were the key to exponential growth in a digital economy that has no regard for the size or seniority of major corporations. And we must also remember that professionals at these huge companies are the ones who add a valuable source of differentiation: strategy, organizational methodologies, and collaborative skills.

We can interpret the generous gestures of Facebook, Google, and Microsoft as opportunistic, although the same degree of opportunity is open to traditional companies. Perhaps their excessive exposure to a single industry makes them more vulnerable than the major tech conglomerates regarding revenue generation.

Although the big tech firms lost more than $320 billion on Monday, March 9, we all understand that they are likely to recover more of their value than their traditional counterparts once this period of crisis has passed.

Roadmap

The following questions might help us develop a roadmap for the post-COVID-19 stage:

• Is it possible that the lesson learned is derived from a reinterpretation of strategy with regard to the creation of new business models? (Alphabet’s Verily)
• Are the distribution models of traditional companies prepared for a worldwide quarantine? (Amazon’s Whole Foods)
• To which extent are traditional companies ready —in terms of work processes and organizational methodologies—to deal with an abrupt adaptation to mass teleworking? Do we have the right tools and mindset to lead remote teams for long periods of time? (Microsoft Teams, Slack)
• Could we compete with tech giants that decide to react with notable generosity during a global crisis, even while taking a loss of more than $320 billion?
• How can we improve our ability to detect similar scenarios in advance or collaborate, through the use of data, to mitigate similar situations?

One final reflection: How can we translate digital transformation into a more sustainable context? (#DigitalSustainability)  In my view, we need to ask ourselves whether our business models, organizational approaches, technology stack, and data strategy are prepared to face a crisis like this one, in case the virus reemerges later this year.