This weekend, we celebrate the 55th National Day of Singapore. But never in the past 55 years has Singapore celebrated this day virtually from home, with the government bringing National Day Parade (NDP) to every home. That tells us that Singapore is changing, and so it must rebound from Covid-19, which represents probably the biggest challenge that Singapore has faced in its young and vibrant history.
While Prime Minister Lee Hsien Loong and his newly formed government are striving their best to put all enablers in place to help Singaporeans emerge stronger and more resilient from this crisis, it is a challenge for Singaporean businesses to adapt to the #NewReality.
Embracing digital transformation
Companies in Singapore and globally are increasingly leveraging technology to unlock new sources of value and competitive advantage. With Covid-19, many things have changed, but not the importance of the digital in helping secure a company’s future. Multiple shocks — to product and service demand, customer interactions, supply chains, workforces, and core processes — highlight the need for higher organisational resilience. The disruptions resulting from Covid-19 have turbo-charged the urgency for companies to embrace digital.
In a recent Boston Consulting Group (BCG) survey, over three-quarters of CEOs said they plan to speed up their company’s digital transformation. Digital transformation is also shifting to the heart of a company; getting it right is so critical that CEOs and their direct reports are leading 61% of transformations.
We at BCG believe that digital transformation is a powerful enabler for industries across all verticals today. A recently conducted study of more than 200 global companies reveals that digital leaders achieved 1.8 times higher earnings growth than digital laggards, and more than double the growth in total enterprise value. As Singapore looks to its post-Covid-19 reality, that opportunity to amplify business value will be critical.
Rise of bionic companies
Most enterprises and small businesses consider digital transformation as automating existing processes. But that is underestimating the true potential and power of digital. A digital transformation imagines a new reality, driven by shifts in consumer behaviour, and accelerated by technological innovations. In many ways, it is about how companies can augment human capabilities with technology to create new realms of the possible. At BCG, we refer to these companies as bionic.
Bionic companies leverage the best of both sets to create step changes in performance. Their constant focus is on creating a better customer experience, building new innovative products, and enhancing operations.
There are four critical elements of a bionic company. First, strategy and purpose lay at the heart of the bionic company. Each bionic company defines its unique strategy and purpose that motivates its employees and engages customers. Our research suggests that organizations with a strong sense of purpose are more than twice as likely to have above-average shareholder returns.
Next, a bionic company is focused on business outcomes. Companies are unlocking value by creating customer experiences and relationships that are personalised, authentic, trusted, and frictionless across channels, moving from human-operated to human-designed-technology, and using technology to develop new offers, services, and business models.
Thirdly, bionic companies drive digital transformations based on a fundamental organizational structure that integrates innovation through new ways of working.
Last but not least, bionic companies consistently leverage technology as an enabler. A modern, modular tech stack is also essential to make this work, allowing different teams to work on different parts without compromising the integrity of the system overall. Modular and agile technology will not only improve how the tech stack functions, but also allows teams to be agile and act on readily available data and services.
Our research shows that companies that invest in combining these capabilities outperform their competitors overall, and on dimensions such as efficiency, product quality, customer satisfaction, and speed to market.
The evidence is clear that companies who wish to leverage the benefits of digital transformation must first recognize its value. Companies that rebound faster will be those that acknowledge and understand this opportunity at a fundamental level. Technology can provide a valuable platform for business continuity during a crisis. The recent transition to technology-enabled remote work during Singapore’s circuit breaker is a clear example. That experience can not only offer an example of success, but help embed the mindset of technology as an enabler for the business that will persist beyond Covid-19.
Top performing companies use digital transformations to combine human and technology capabilities in new ways. E-commerce giant Amazon is an industry leader with its philosophy to “start with the customer and work backward”. When the Covid-19 crisis started, Amazon’s speed of innovation and ways of working saw it maintain delivery speeds, despite sharp demand increases. Data and analytics, including predictive demand modelling, kept offers relevant and competitive. Amazon also acted quickly to protect customers by putting a stop to opportunistic price rises and false advertising. This customer focus, and ability to draw on the best of human and technological capabilities, has set Amazon up to respond quickly and grow at the same time.
Successful companies invest in digital transformations
Companies that understand this digital imperative are accelerating their transformations to keep pace with the disruptive forces of Covid-19, and they are positioned to take advantage of shifts in markets and consumer behavior. This advantage is inherent for digital natives, with their digitally-skilled workforces, modern technological capabilities, and an understanding that digital transformation is a continuous process. That means building both digital infrastructure and digital talent.
Ayrton Senna, former Formula One World Champion and one of the greatest Formula One drivers of all time, once said: “You can’t overtake 15 cars in sunny weather… but you can when it’s raining.” Singaporean enterprises and small businesses have an opportunity to leverage digital transformations to leap forward into the new reality.
The infrastructure that Singapore offers is robust — locally-available cloud set ups of global majors like Amazon Web Services, Microsoft Azure, and Google Cloud Platform — augmented by a set of system integrators with regional and global headquarters in the country, and enabled by one of the most progressive governments globally that is supporting the digitisation of the economy. Now is the time to double-down on digital investments, and use this period of crisis as a springboard to power-up and future-proof your organisation.
Tarandeep Singh and Anand Chawra are both Partners at Boston Consulting Group