‘Fit for the Future’ organizations turning to technology to meet new business challenges and increasing customer demands
Business preparedness for future challenges has increased despite two years of COVID-19 pandemic-related disruption, according to a major new study from Vodafone Business. The global report, which was analyzed by the London School of Economics (LSE), found the percentage of US businesses that are ‘Fit for the Future’ (FFTF) rose from 17% in 2019 to 27% today, a 10-point increase and the largest increase among countries surveyed (tied with Germany 18% to 28%). Globally, FFTF businesses rose three percentage points from 19% to 22%.
The growth is propelled by investment in digital services as the willingness to be the first to try new technologies has nearly doubled within US companies since the start of the COVID-19 pandemic (24% in 2019 to 42% in 2021).
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The “New Digital Normal” is here to stay
Over the last two years, US companies adopted new characteristics or double downed on existing organization transformation efforts to usher in the “New Digital Normal”. Today, half of US companies view their digitalization of their business processes, products, and services as over-performing (only 39% in 2019). Meanwhile, the use of new technologies like virtual and augmented reality products and services rose 9 percentage points since 2019 (22% to 31%).
The report found the digital-driven characteristics and operational changes made throughout the pandemic are now the new normal for organizations.
- 45% of companies in the US expect to continue with changes that were made due to the pandemic (such as contactless fulfilment).
- 44% of US companies now view their online presence (i.e. website) as the most important destination for new customers.
Growing customer power and societal expectations
The report also found customer digital expectations evolved and became more paramount over the course of the last two years. In fact:
- 67% of all US businesses stated customers are becoming more powerful.
- 71% reported customers are demanding better products and services.
- 66% said consumers expect to interact with brands anytime, anywhere via digital services.
While consumer expectations on digital experiences grew over the course of the pandemic, so did the expectation that organizations help address societal issues.
- In the US, 65% of companies said their customers have demanded they have a stance on important social issues.
- 20% of US companies say being sustainable is absolutely necessary for their organization to operate (up from 11% in 2019).
- Less organizations are simply trying to appear sustainable without it being a core priority (only 21% today compared to 31% pre-pandemic).
Unfortunately, not all companies are equipped to take advantage of these shifts. The research found that FFTF businesses are those best placed to improve their digital services, increasing their likelihood to win and retain new customers.
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Increased employee expectations
It isn’t just customers that have increased expectations, with employees also expecting more from their employers. In the US, companies report employees demand:
- Freedom and autonomy to work in the way that best suits them (44%).
- Flexibility in where they work (43%).
- Flexible working hours (40%).
This increase in expectation is particularly acute amongst Gen-Z employees globally.
- 56% of businesses said this generation has a greater expectation on flexibility in terms of where they work.
- 61% highlighted Gen-Z as having a greater expectation to work with the freedom and autonomy that best suits them.
This growing need for flexibility is causing challenges and uncertainty for businesses. Over 86% of US companies have some concern about remote working, with maintaining productivity and managing the security and protection of data the top two concerns.
However, overcoming these challenges is critical to the future success of businesses.
Additional analysis of the research conducted by the London School of Economics has found a link between companies being ‘fit for the future’ and business performance. The study found that for businesses who scored a 10-point increase in their FFTF score increased the likelihood of outperforming their competitors by 36%1. Additionally, if a business increased their FFTF score by 10 points they would likely see their ESG commitment2 improve by 6 points.
