I have read lots of commentary on the shape of the post-COVID-19 recovery. V, U, Nike swoosh — all had been suggested as the shape of things to come, as it were. The view that makes most sense to me — and which is backed by the experience of members in Asia, the EU, and the UK — is that between June and September we saw a unique kind of K-shaped recovery. That should be of particular interest to our profession.
Put simply, this means there are two recoveries happening simultaneously, depending on the business. The top leg of the K reflects the one being experienced by digital businesses. The lower leg is the one being experienced by those unable or unwilling to reconfigure their business model and processes to continue to deliver their products and services.
Our Future of Finance research showed us that digital change is accelerating and digitally ready businesses are best placed to take advantage of it. If we practise agility and iteratively review our business model, plus the tools we use to maintain it, we will be equipped to keep pace. The post-COVID-19 phase of digitisation is where we can put this into practice to create a sustainable organisation.
Digital business models have shown a resilience probably greater than we have given them credit for. Recent examples demonstrate that being cutting-edge today does not necessarily mean staying that way. Take Airbnb, a poster child for the digital economy but part of a sector all but flattened by the pandemic. Its business model depended on people travelling, but sudden travel restrictions meant it lost a reported $1 billion of booking cancellations almost overnight. However, Airbnb was born an innovative company, so it was better prepared than most to pivot. It has reconfigured itself and re-evaluated its impact on stakeholders, which may put it in a good place to bounce back.
As finance professionals, we use our ingenuity and solve problems critical to business survival. Our data skills are boosted by software, freeing us to spend more time with senior leaders providing data-backed advice. To do that, we will need to ensure we have the right equipment and digital skills. As a starting point, we offered our 2019 Digital Mindset Pack to help members identify their learning needs so they can lead business transformation, and we are now on version two. (CIMA members can access the pack at cimaglobal.com; AICPA members at aicpa.org.)
COVID-19 has shown that sudden change can be brutal for businesses that are pinned to a previous time. However, as a McKinsey article suggested in April, if there is some good, it is in the lower barriers to improvisation and experimentation that have emerged. That is just as well. The future that COVID-19 has shown us is that digital has to become a central part of businesses if they are to survive, let alone compete and thrive. Our profession will continue to digitalise, and we will start to see more of the type of careers that have flourished in the K-shaped recovery, as digital skills become a key differentiator in business.
Change is certainly not easy, but staying put is not an option.