Covid-19 and the future of business in Denmark

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We surveyed 173 CxOs from Denmark and had quite interesting observations, that to sum it up – indicates that businesses in other countries are moving faster than we are, to respond effectively to the challenges and learnings from doing business under the pandemic.

The Danish survey is part of a larger study that we released this week. It details the global findings of our 2020 COVID-19 C-suite study, “COVID-19 and the Future of Business,” which surveyed over 3,800 C-level executives spanning 20 countries (also including Sweden) and 22 industries.

The study in general is revealing permanent changes and a comprehensive look into how big business will generate financial returns over the next two years, engage and retrain workforces, and prioritize strategic investments after an unprecedented economic collapse.

We found that COVID-19 has driven the vast majority of global C-suite leaders to significantly accelerate the pace of innovation, but executives now rank organizational complexity, inadequate skills and employee burnout as the top 3 greatest challenges their businesses will face in the next 2 years as they drive toward economic recovery:

Globally:

• Before the pandemic, executives ranked technology immaturity and employee opposition to change as some of their biggest hurdles to business transformation. Today, those barriers have fallen away:
  • 66% of executives say they’ve completed previously stalled or difficult initiatives that encountered resistance or failed before COVID-19
  • 76% of executives believe they’re actively innovating to keep business running.

• Yet there is a significant disconnect in how C-suite leaders and employees believe companies have been effectively managing the crisis:
  • 74% of executives believe they’re helping their employees learn new skills needed to work during the pandemic; only 38% of today’s workers agree 
  • 80% of executives say they’re supporting the physical and emotional health of their workers, yet only 46% of employees think their employer is providing this support
  • 86% of executives say they’re providing their organization clear guidelines and expectations on how the company will work during the pandemic; only 51% of employees believe they’re receiving this

Locally – in Denmark:

• COVID-19 has also in Denmark driven the vast majority of business leaders to accelerate the pace of digital transformation, although we are not leading the race towards the future of operating:
  • 6% of executives believe they’re actively innovating to keep business running.

• Executives are experiencing a proliferation of initiatives, which makes it hard to focus. Executives do plan to place more emphasis on internal and operational capabilities over the next two years, such as increasing prioritization of workforce safety, skills, flexibility.
  • 2 years ago, only 1% of Danish executives prioritized workplace safety(!) and security. Today, that number is 20% and in 2 years will be 56%.

• That’s good news, since executives call out organizational complexity, inadequate skills and employee burnout as their biggest hurdles to progress – both in the immediacy and in the next two years. Yet, as said above, in many countries there is a significant disconnect in how effective top-leaders and employees believe companies have been in closing those gaps.
  • 69% of Danish executives believe they have been helping their employees learn the skills needed to work in a new way. Given the high level of IT-readiness and digitization in Denmark, my feeling is from talking to clients, that the transition to working from home hasn’t been very hard, once technical constraints were solved. 81% of Danish executives also say that they are supporting the physical and emotional health of their workforce. This actually quite high.

• The study reveals patterns among emerging leaders, who are now increasing investments to apply cloud to improve operational scalability and flexibility. Implementing AI, automation, and other exponential technologies to make workflows more intelligent and empower people. And finally leading, engaging and enabling their workforces through inspired leadership.
  
  In general Denmark is ‘on par’ more or less compared to the average on a global scale, except – and surprisingly – Danish executives have a significantly lower prioritization of AI than most other countries.

• Danish executives plan to increase their prioritization of operational scalability from 9-39% (+30 points!) in two years from today, and plan to prioritize cloud more by 20% in two years from today, going from 61-81%.

• Danish executives plan to increase prioritizing AI in the next 2 years from 24 – 46 % (57% global average), a 22 percentage-points increase from today – but not impressive.
  
  
• Danish executives have plans to increasingly apply automation across all business functions, but especially big jumps are expected in procurement (2.0x), risk management (2.3x), supply chain (1.6x) and research & development (2.7x) in the next two years.

But it is evident that in some areas, Danish executive, have really learned from this Covid-19 crisis, a places high emphasis on building resiliency and robustness into the organization and business model. 73% say they plan to prioritize supply chain resiliency over the next two years as compared to two years ago. In addition, all executives surveyed said they plan to increase their number of suppliers. Nearly 48% of executives believe they need more spare capacity to weather any new crisis.  It may also be so, because Danish Executives are a bit more pessimistic about the rise of the economy in Denmark, than our domestic public economists, such as the Danish Central Bank…

So what should we do now?

In the race for competitive advantage, it is imperative that organizations react in real time—that is, now—to navigate this new environment. Businesses need to take action in three critical areas in order to survive and flourish.

• Lead, engage, and enable the workforce in new ways with inspirational leadership. Provide support for more flexible work options (like hybrid models of remote and in-office work). Emphasize employees’ mental health and well- being, and skills development. All this can help in driving trust, binding the right talent to the organization long-term post-pandemic.
  
• Apply AI, automation, and other exponential technologies to make workflows more intelligent. Focus on supply chain resiliency, cybersecurity, and adoption of automation and AI.
  
• Improve operational scalability and flexibility, including the prioritized use of the hybrid cloud and moving more business functions to the cloud.

This new world permits no time for complacency or nostalgia. There is no going back to what used to pass as normal. The risks and opportunities are too great; the stakes too high. Executives need to prepare their businesses for ongoing uncertainty, inevitable disruption, and never-ending change.

You can download the global study Covid-19 and the future of business from IBM Institute for Business Value here. 

If you like to dive into the Danish or Swedish observations on Covid-19 and the future of business – or have an online presentation and discussion of the study and our recommendations, please feel free to contact me at andersq@dk.ibm.com