As the corona virus spreads and much of the world remains under lock down many companies are being shocked into going digital. They are unlikely to go back to the old way of doing things and if they want to stay ahead of the competition they should already be working on their Next Big Thing.
“Don’t waste time. This is a great time to rethink how you do business,” says Teppo Paavola, chief digital officer of Adecco Group, a speaker at an April 30 World Economic Forum webinar entitled “Shocked Into DigitaL; Agility and Resilience During Disruption.” A number of developments this week give a glimpse of what agility and resilience will look like post COVID-19.
Shortages of raw materials and critical supplies, combined with increased worker absenteeism during the pandemic, have underlined the need for more resilient supply chains. This is likely to lead to a speedier adoption of blockchain technology. To help businesses prepare the World Economic Forum this week unveiled a tool kit it says will help organizations improve future pandemic preparedness and accelerate an economic rebound post COVID-19. It’s the first-of-its-kind resource, according to the Forum, and draws on the input and expertise of more than 100 public and private sector organizations to capture best practices from blockchain deployment across industries.
Companies don’t have to just adjust their supply chains they need to quickly adapt to the ways that the global lock down is changing consumer habits.
Retailers including Walmart, Amazon and Instacart have said they would hire a total of over 700,000 workers to meet a surge in demand for groceries and household essentials during the coronavirus outbreak, according to data compiled by professional networking site LinkedIn and reported on by Reuters.
Nestle told Reuters it was looking to fill 5,000 full-time U.S. positions in “a variety of levels across corporate and frontline. Fidelity Investments, a Boston-based financial services firm, said it had accelerated recruitment because of the pandemic and was looking to fill at least 2,000 full-time roles for financial consultants, software engineers and customer service staff in the United States in 2020. Companies hiring in the United States and other countries also include Apple ; ByteDance, the Chinese parent of video-sharing social network TikTok; Takeda Pharmaceutical Co.; and aerospace and defense company Lockheed Martin.
The trick is to not just keep up with orders but to find new and innovative ways to deal with customer demand. JioMart, an e-commerce venture run by India’s most valued firm, is doing just that. It is testing an “ordering system” on WhatsApp, giving a first glimpse of what to expect from the new collaboration between Facebook and Indian telecom giant Reliance Jio Platforms.
Users in three suburban areas of Mumbai, can now use JioMart’s WhatsApp business account for grocery shopping, according to a story this week in TechCrunch. They can initiate an order by texting “Hi” to a specified phone number, which prompts a link that opens a mini store on the browser, allowing them to pick a range of grocery products including toothpaste, snacks, tea and coffee, rice, and cooking oil. Once an order has been placed, which currently does not include a way to pay digitally, JioMart automatically assigns a neighborhood store to them and sends an invoice through WhatsApp. More than 1,200 neighborhood stores are engaging in the pilot program.
Companies that are agile enough to make quick adjustments to the upsurge in digital demand are already starting to see positive results. While Nike was promoting online shopping prior to the outbreak, that business has accelerated in recent months, according to a story in CNN. The sportswear giant reported strong earnings in March, partly because it was quick to accelerate its online business in China. Digital sales in Greater China rose more than 30% last quarter, while weekly active users for its activity appsshot up 80%, CEO John Donahoe told investors.
As millions of people hunker down at home, they’re being forced to create new routines and lifestyles. “They always say it takes 21 days to change a habit,” Deborah Weinswig, CEO of Coresight Research, an advisory and research firm that focuses on retail and technology said in an interview with CNN. “We are changing our shopping habits, and some of those will be quite sticky.” Nike, for instance, has pivoted so well it “could change the curve that [it’s] on for many years to come,” she says.
China is proving to be a training ground in agility for big U.S. companies in more ways than one. This week Starbucks announced a partnership with venerable Silicon Valley venture firm Sequoia Capital China to co-invest in technology businesses in the world’s second-largest economy.The coffee chain said that along with co-investments, it will look to form commercial partnerships with next-generation food and retail technology companies.
“The partnership enables Starbucks to tap into the most dynamic Chinese technology entrepreneurs in order to delight our customers with meaningful innovations created in China, for China,” Belinda Wong, chairman and chief executive officer at Starbucks China said in a press release.
Starbucks will be able to get early access to “ideas in the retail marketplace, creating opportunities for strategic investment,” the company said. Companies that it invests in will be able to leverage Starbucks’ retail expertise, scale and infrastructure, it added.
The latest push from Starbucks aims to boost the digital aspect of its business in China, one of its most important markets. In 2018, Starbucks struck a partnership with e-commerce giant Alibaba to begin deliveries of its products. The company said that it will “explore opportunities to embed digital technologies across all dimensions of its retail business” and use data to help decision making. Starbucks will also look at technologies that could help it manage its growing retail operations in China and optimize its supply chain and inventory management, according to the CNBC story.
The coronavirus is also expected to accelerate the move to digital money and China is helping lead the way, with the help of Starbucks, McDonald’s and Subway fast food chains.
Central banks around the world are all studying and testing sovereign digital currencies but China has decided to accelerate its push during the pandemic and it is working with American fast-food chains to help it accomplish its goal. Last week, the PBOC included the large foreign consumer brands for the first time in tests of the sovereign digital currency.
That’s not all. This week The Digital Currency Research Institute, a unit of the People’s Bank of China (PBOC) that is overseeing development of a new sovereign digital currency, entered into a pact with SenseTime, the world’s highest valued artificial intelligence start-up, to speed up adoption of the latest AI technologies in the financial industry, according to a story in the South China Morning Post.
The Digital Currency Research Institute, a unit of the People’s Bank of China (PBOC) that is overseeing development of a new sovereign digital currency, entered into a cooperation agreement with SenseTime to pool their research and foster innovative new applications the Hong Kong Science Park-based company said in a statement on Monday.The ultimate goal is to help strengthen “risk control and operational capabilities” across financial institutions, the statement said, without providing details of the initiative.
Earlier this month, China formed a national blockchain committee to draw up standards for use of the technology across industries. This so-calledNational Blockchain and Distributed Accounting Technology Standardisation Technical Committee includes telecommunications equipment maker Huawei Technologies, video games and social media powerhouse Tencent Holdings, Chinese online search market leader Baidu, fintech company Ant Financial Services and e-commerce giant JD.com, according to a statement from the Ministry of Industry and Information Technology.
Future of Work
Companies across the board are spending more on cloud based services and relying on video conferences. In the U.S. companies went from having about 5% of people working remotely to about 50% virtually overnight. Many businesses have discovered that they have become more efficient by working remotely and will not be renewing most of their leases for office space, Harry Moseley, Zoom’s Chief Information Officer, said during the Forum seminar on agility and resilience.
That doesn’t mean that offices are going to go away but they are likely to change. Cushman & Wakefield, the global real estate services firm, has developed a visual guide for its clients called the “Six Feet Office.” The concept, a “living laboratory” is based on its takeaways from China and other feedback from workers and clients across the globe. The redesigned office will make workers feel safe by ensuring there is six feet between desks, encouraging workers to always walk clockwise to avoide moving past each other and shared surfaces that people used to have to touch to open doors, for example, will be replaced by sensors or other technology that can interact automatically with devices or via biometrics, according to a story this week on CNN.
“We are never going to see the end of the office but what this pandemic shows is that it doesn’t require you to be in the office every day,” says economist Carl Benedikt Frey, an Oxford Martin Citi Fellow at the University of Oxford and director of the program on the Future of Work at the Oxford Martin School. “We will see more done at a distance.” Frey, a speaker during a webinar organized this week by DLDSync, predicted that the trend towards business automation will have one of the biggest impacts on warehouses. As e-commerce goes through the roof warehouses are becoming increasingly hazardous for workers. As artificial intelligence improves and robot hands become more dexterous many of the current jobs will be automated, he says.
Organization models and company culture must also change as companies come under pressure to accelerate digital transformation and see beyond the fog of COVID-19. “Leadership is being looked at more than ever and people are attending and listening to the CEO call more attentively because they are looking for which way to go,” Paavola, Adecco Group’s chief digital officer, said during the Forum’s webinar. “Companies can only do agile if they empower people lower down and cut their investments into smaller pieces. This is not how it is done in traditional companies but it is in the digital world.”
Traditional companies would do well to take a leaf from the pages of the most successful U.S. companies: Microsoft, Amazon, Apple, Google and Facebook, according to a 28-page April report on the impact of the corona virus compiled by Bond Capital, a Silicon Valley VC firm whose partners include Mary Meeker, a former bank analyst renowned for her annual Internet Trends Report, which many investors and entrepreneurs use as a touchstone for where tech is now and where it’s going, The report notes that U.S. tech companies have common threads: technology/innovation, digitization, often cloud-based operations and CEOs with engineering/computing degrees.
“All five companies are led by planners, they have short term and long term (10–20 years) visions and business plans based on data, execution, iteration, engineering and science,” the report says. “Events of the past three to four months underscore the need for broad-scale data-driven forward planning/execution and the need for modern technology. In both industry and government, we fully expect greater focus on forward planning with more scientists/engineers/domain experts who have seats at the table and relevant voices. This would be a good thing.”
You can access more of The Innovator’s News In Context articles here
