Gartner: How ‘fit’ enterprises survive a crisis
What makes a fit company bounce back from a crisis while a fragile company is left struggling? The Gartner 2020 CIO Agenda: Resilience During Disruption, challenges the idea that a crisis is something to fear - which will be reassuring news for Asia-Pacific businesses coping with the fallout of COVID-19.
A timely report written, prior to the pandemic, by consultants Gartner had the foresight to focus on how companies can arm themselves to be resilient during a major disruption and go on to thrive and transform.
The survey quizzed 1,070 C10s across 64 countries that had experienced a crisis of high severity in the past four years. Asking them how well they performed following the crisis. Enterprises that came out ahead are identified as “fit” and those that came out behind as “fragile.”
Advice on how to handle a crisis is still as pertinent as ever: Fit enterprises emerge from these events stronger and more competitive, reports Gartner who investigate what makes the difference? What allows fit organisations to thrive and gain a competitive advantage when tested?
“When a crisis hits, the stability that helped maximise business results in the past, can get in the way of the changes the crisis demands. Leaders instinctively feel they should batten down the hatches - cutting costs or reducing risk - but this cautious approach can hurt the organisation,” outlines the study.
“Enterprises that respond this way emerge from crises less able to fund business initiatives, attract the right talent, and so on. In contrast, fit enterprises take a different approach, becoming more effective after a crisis. They don’t require unique skills or scarce resources, just excellence in 10 capabilities across three critical areas:
Alignment: Make it dynamic
Alignment is the area where most fit enterprises (47%) outperform fragile, according to the report. “Enterprises that acquire these capabilities before a crisis hits don’t suffer permanent damage from it but actually grow stronger and more competitive,” states Gartner.
Alignment means the organisation can stay together while it shifts into a new direction. The solution is to make the enterprise strategically digital. “For this reason, great business leadership that promotes dynamic alignment and reaches into the IT organisation is key for fit enterprises,” reveals the survey.
The five capabilities of alignment are identified as:
- Great leadership
- Disciplined IT investment
- Compelling vision
- Continuous strategy
- Robust relationships
Gartner reports that an inspiring leader knows which direction the enterprise must move and can instil the confidence in all stakeholders to get there. How CIOs should respond:
- Improve decision support for business executives, identifying where they need more/better/faster/clearer data.
- Shorten decision-making time by considering what IT can automate.
Anticipation: Take more risk
Fit enterprises do not wait for circumstances to force a change in direction - leaders actively search out and act on emerging trends, points out Gartner who say IT plays a vital role in executing this new strategy.
This is illustrated in the statistics focusing on the deployment of Artificial Intelligence (AI) and Robotic Process Automation (RPA). Fit companies who have deployed AI (or plan to in the next 12 months) amounted to 52% while only 39% of fragile companies reported this.
The three capabilities of anticipation are identified as:
- IT as a differentiator
- Anticipating change
- Balance risk taking
Adaptability: Fluid culture
IT leaders turn the IT organisation into an instrument of change for the enterprise, report Gartner. Statistics show there is a strong sense of identity among employees in fit companies (60%) - compared to 51% in fragile businesses.
“In a crisis, employees must be able to change established habits and think in creative ways to meet a new set of challenges,” concludes the survey.
The two capabilities of adaptability are identified as:
- Fluid culture
- Enterprise agility
How should CIOs respond?
- Kick-start a culture change initiative within the IT organization that emphasizes a growth mindset and continuous learning.
- Identify the new behaviours you want to encourage in IT staff.