Research released by professional services firm GHD’s digital arm, reveals that senior executives face renewed pressure to innovate even after their organizations had adapted successfully to COVID- 19.
The Innovation Imperative research, commissioned by GHD Digital, surveyed 777 senior executives from Australia, Canada, New Zealand, Saudi Arabia, United Arab Emirates, United Kingdom and United States. The goal was to understand how much COVID-19 and other recent forces have accelerated digital transformation.
Industries represented include infrastructure, construction, transportation, energy and natural resources.
The findings show that leaders urgently need to ramp up investment and skills to survive further disruptive forces.
Technology and digital transformation were seen as the key drivers to disruption by executives in all countries. But while executives are feeling the pressure to innovate, the vast majority are optimistic about the potential for digital innovation.
Most of them (86 percent) believe they are already ahead of their competitors in their digital transformation journey.
“We had a sudden situation where the world was shut down and we had to adapt. In less than two years, the pandemic accelerated digital transformation by an average of seven years,” said Kumar Parakala, president of GHD Digital.
“Executives became comfortable using new tools and technologies, and this gave them a belief that they are further ahead in their innovation journey than their peers. They need to be mindful of the risks. I’ve seen examples from many other industries of the perils of failing to develop the right business models for our changing world.”
Key findings in The Innovation Imperative:
- 94 percent regard digital innovation as an opportunity rather than a threat
- 89 percent believe disruption and uncertainty in their industry is creating greater pressure to innovate
- 87 percent feel that their industry is vulnerable to digital disruption
- 86 percent believe they are ahead of their competitors in digital innovation
- 81 percent of executives viewed remote or hybrid work as having a positive impact
- 63 percent said pressure to innovate has taken on a new urgency since the pandemic
While many industries have long embraced the digital wave, sectors such as government, water and transportation are still early in their digital journey.
Customers’ needs and expectations were evolving before the pandemic but enterprises traditionally felt little pressure to innovate. COVID-19 pushed companies to transform their practices and adopt essential technology.
“COVID-19 has had a catalytic effect on what was already a complex set of disruptive elements affecting the infrastructure, construction, energy and natural resources sectors. The current struggles businesses face with hiring and keeping employees is also a key factor in the need for digital transformation — making it necessary and unavoidable” said Jim Giannopoulos, GHD’s chief executive officer for the Americas.
As GHD’s recent Aquanomics research shows, these advances are essential in key infrastructure sectors to help fend off an estimated $5.6 trillion USD in water-related disaster impacts between now and 2050.
Parakala said success amid disruption starts with the CEO, supported by their leadership team.
Leadership to drive change, create new business models and transformation was recognized as a critical success factor. The findings show that organizations are engaging with automation, data and analytics, connected infrastructure, augmented/virtual reality and artificial intelligence at previously unseen levels.
Top recommendations based on The Innovation Imperative findings:
- Create an inspiring leadership narrative: Harnessing the momentum from the pandemic and the “tech-celeration” into a culture of innovation from top to bottom, avoid short-term thinking
- Foster an innovation mindset: Achieving ESG and decarbonization goals will be impossible without technological innovation
- Track technology and market trajectories: Tapping into the Internet of Things and Industry 4.0 to improve how products are manufactured and distributed
- Pursue more radical forms of collaboration: Developing bold partnerships across industries through digital innovation to streamline efforts
- Instill a hybrid/remote working environment: Worker scarcity and the changing nature of work will require businesses to continue to be flexible
- Seize emerging opportunities: Ensuring strategic bets are being properly pursued, with adequate funding, capabilities, and accountability
- Enhance customer experience: Customers are flocking to businesses that best serve them through the latest digital advances
- Recognize digitalization opportunities: Opportunities are abundant in the water monitoring, manufacturing, transportation, municipalities, and energy industries