COVID-19. It has taken the brunt of a lot of companies ill-managed shortfalls. Poorly structured business models, incompetent CEOs and irresponsible financial controllers. The list goes on. Whichever the reason, many businesses are going through change. Change of business model, change of staff, change of structure. Most of the change involves companies reducing their wage costs. With this change, companies need to be certain that they do not focus merely on the business surviving by reducing expenditure and reducing wage costs but they need to ensure that they set the business up to thrive. They need to ensure that the business model and the employees that are retained and hired in the future, are set up for Digital Transformation.
I argue that out of the 4 typologies of digital transformation that Tekic & Koroteev (2018) mention (disruptive, business model led, technology-led and proud to be analogue), that a business model led typology coupled with Aghina et al’s., (2018) ‘learning worker’ is the best way to not only allow businesses to survive but will also allow them to thrive in the current volatile and ever-changing economical environment.
One of the big benefits of using a business model led typology is that there is a low-cost to entry. Businesses do not have to have access to excessive amounts capital or lending to be able to digitally transform their business to align to new objectives. Nor do they have to have high sophistication in digital technologies.
Businesses need to also focus on Digital Transformation through the type of employee that is retained and hired through this transformation. Businesses who were once built for speed, efficiency and specialisation of roles have become so brittle in the current economical environment that they are now having to ensure that they hire ‘learning workers’ to protect their business from failure (Aghina et al., 2018). Learning workers are employees who are diverse in their abilities, experience and ideologies. This allows the business to be able to create greater resilience and flexibility within the workforce and allows the business to operate in the ‘window of viability’ (Woods, 2020).
An example of a successful company that is business model led and has utilised learner workers is Adlux. Adlux went from manufacturing skylights to pivoting and manufacturing face shields (Westpac, 2020). Adlux has not only been able to retain staff through COVID by pivoting to manufacturing face shields but they have been able to employ 40 additional workers. The critical point is that they are also futureproofing by hiring an additional manager to allow for the increase in demand. This enables Adlux to have slack within their organisation and set themselves up to be able to innovate through a volatile environment (Chen & Huang, 2010).
By ensuring that, when needed, businesses are focusing on a business model led typology and learning workers instead of cutting costs through merely reducing wage costs in restrucures, businesses can be set up for digital transformation. This will allow businesses to be more resilient and ensure that they can flourish in a time of volatility and economic uncertainty.
Sources:
Aghina, W., Ahlback, K., De Smet, A., Lackey, G., Lurie, M., Murarka, M., & Handscomb, C. (2018). The five trademarks of agile organizations. McKinsey & Company.
Chen, C.-J., & Huang, Y.-F. (2010). Creative workforce density, organizational slack, and innovation performance. Journal of Business Research, 63(4), 411-417.
Tekic, Z. & Koroteev, D. (2019). From disruptively digital to proudly analog: A holistic typology of digital transformation strategies. Business Horizons, 62(6), 683–693.
Westpac. (May 7, 2020). Inside four businesses that adapted during Covid-19 lockdown. Retrieved July 19, 2020, from https://www.westpac.co.nz/rednews/business/inside-four-businesses-that-adapted-during-covid-19-lockdown/
Woods, D. D. (2020). The strategic agility gap: How organizations are slow and stale to adapt in turbulent worlds. In B. Journé, H. Laroche, C. Bieder, & C. Gilbert (Eds.), Human and Organisational Factors: Practices and Strategies for a Changing World (pp. 95–104). Springer International Publishing.