An article by Hagen Rickmann, Director Business Telekom Deutschland GmbH.
Never waste a good crisis. That's Churchill's line. And it sounds cynical today in view of the suffering that Covid-19 has caused many people and in view of the burdens on the world economy. There is no question that the pandemic is a disaster first and foremost. But it is also an occasion to rethink our status quo.
We already know that there can be no "business as usual". Countries and companies have proved too crisis-prone for that. I am convinced that digitization can help us to refocus ourselves. In Germany, we are seeing Corona as a catalyst for transformation. Since the beginning of March, the crisis has suddenly created acceptance for digitization even in those companies that had previously held back digitally. For example, all those companies that, in view of their good business figures, have so far seen no reason to deal with the possibilities of transformation. They had to rethink overnight, take off digitally, in order to remain capable of doing business at all.
Trying instead of discussing
We have seen as much digitization in two months as we usually do in two years, Microsoft CEO Satya Nadella said recently in a conference call with analysts. I can support that. The pandemic has turned many of our customers' everyday working lives upside down from now on - and made them much more digital. The best example: mobile working. We've been discussing New Work and the possibility of working flexibly from anywhere for years. That is just as long as those who have reservations have been raising their objections. And then the corona virus proved all their arguments wrong within a few weeks. Why? Because we no longer talk, but create facts and, because of the pandemic, companies had to try digital collaboration tools such as WebEX or Microsoft Teams to stay in the game. As a result, according to BITKOM, every second professional was working from home in mid-March. The result: this huge field test ran completely smoothly in many places. So I am sure that even if the crisis does go away, the home office will remain. If their job allows, Deutsche Telekom employees have been working from home since mid-March - 83 percent said in an internal survey that they enjoy doing so. Before the crisis, this figure was only 37 percent. We are all learning in fast motion that flexible forms of work are efficient: According to a recent survey by the Fraunhofer Institute, almost 55 percent of those surveyed rate their productivity at home as higher or even significantly higher than in the office. I was surprised by this figure, as many mothers and fathers had to, and still have to, take care of their children and of homeschooling in parallel to their work.
Digitization increases economic resilience
Without the digital possibilities, the Corona crisis would have hit us even harder economically. Companies that invested in digitization generally came through the shutdown better. I had expected that. Our Digitization Index has been proving for years that transformation pays off for companies: They generate more sales, win new customers more easily and can boost their value creation through innovative business ideas. This applies above all to the digital pioneers in the SME sector. Almost three-quarters of the top performers are pleased with higher sales; 83 percent have improved their product and service quality. In the next Digitization Index we will read about another, perhaps much more important effect: Digitization increases resilience in times of crisis - for example, because retailers can bring their products to their customers faster through alternative distribution channels.
A good example is Lindner Hotels & Resorts. Of course, they too were no longer able to offer tourists products after the shut-down. But because they had opted for digization early on, they were able to develop a new business model and compensate some of the losses. The hotels offered their rooms with fast WLAN as a home office alternative for all those who could not concentrate on their work at home. And thanks to digitization, Lindner also finds it much easier to organise the new start, as the company has been offering its customers a contactless customer journey for some time now. Without queuing at the reception desk, overnight guests check in and out with their smartphone and can even open the doors to their room with it.
What should we learn from the crisis?
Nature is not controllable. Here in Germany we will have to live with a feeling of insecurity in the future and have to take crises into account. In other words, companies should urgently work on their willingness to adapt. With the new norm, a age of flexibility beginns. This means that it is no longer possible to imagine the day-to-day work of companies without digitization.
Working from home is on the rise: In future, working mobile or from home will increase. Facebook assumes that in ten years every second employee will be working from home and Twitter is already offering home office to all employees on a permanent basis. Companies must provide the necessary tools for this. For example, they must increasingly rely on collaboration tools - especially as these are becoming better and better and less complicated. Microsoft Teams will e.g. integrate noise suppression in real time in 2020. An AI will then simply filter out disturbing background noise.
Diversity is the new norm: companies will continue to digitize and rely even more on multi-channel strategies. Digital channels such as online shops and websites will increase massively. The last few weeks have shown that companies that were well positioned with their online shops have come through the crisis better. Not only their sales volume but also - in the case of listed companies - their share price has developed positively. That's why my tip for digitization is: Get going. There are plenty of digital tools for small steps. Don't slow down now.
I hope that the German government will create the right conditions for this: It is currently paying out enormous sums of money to companies to soften the effects of Corona. That's good. Of course companies need help - but why don't we provide targeted support for digitization projects, combine support with conditions, offer companies an incentive to transform themselves? So that they come out of these difficult times stronger and more resilient. And better prepared for the next crisis.