- A digital future lies ahead. By acting early and being bold and decisive, CEOs can accelerate their digital transformation and reach the next normal sooner
Source | www.mckinsey.com | Matt Fitzpatrick | Isha Gill | Ari Libarikian | Kate Smaje | Rodney Zemmel
There’s a popular meme going around that neatly captures the tipping point of digital. It’s a short questionnaire asking who is driving your digital transformation. The first two options are “CEO” and “chief digital officer.” Below that, highlighted with a bright red circle, is “COVID-19.”
The coronavirus pandemic is a humanitarian crisis that continues to take a tragic toll on people’s lives. There’s no denying it is also acting as a catalyst for change—economic, societal, personal, and corporate—on a scale not seen since wartime. The scale of the change and the speed at which it’s happening is shining a bright light on the fact that companies are facing a once-in-a-generation shift. And for all the uncertainty about what the future will look like, it’s clear already that it will be digital.
The challenging economic outlook and continued uncertainty are forcing CEOs to contemplate some difficult choices. Some are pulling in, making cuts, and focusing on riding out the storm. Others, however, are taking decisive action to make sure that when the crisis ends, they’ll be stronger than they are today.
Research and experience show that those acting with a through-cycle mindset will be best positioned to accelerate out of the downturn. In the recessions of 2007–08, the top quintile of companies was ahead of their peers by about 20 percentage points as they moved into the recovery in terms of cumulative total returns to shareholders (TRS). Eight years later, their lead had grown to more than 150 percentage points. One key lesson from that experience is the companies that move early and decisively in a crisis do best.