The COVID-19 crisis has been hugely disruptive. But it has also presented companies, governments, universities and individuals with opportunities to embrace change using technology. Few have witnessed this historic shift toward digital transformation—and helped to shape it—more closely than David Rowland.
As executive chairman of Accenture, the global professional services company with capabilities in digital, cloud and security, Rowland has recently been advising clients on navigating the ongoing crisis by pivoting from outmoded manual systems and accelerating the adoption of digital technologies. He is well suited for the role. He started at the company as a consultant 37 years ago and has spent his career there. As such, he is one of the company’s longest-tenured senior executives.
Prior to his current role, Rowland served as the company’s interim CEO and as CFO. During that period in his career, he played a key role in driving record levels of top-line growth and shareholder value. He also oversaw the company’s strategy of acquiring more than 100 companies to fortify its digital expertise and scale for strategic growth.
Thanks to Accenture’s own successful rotation to new, digital technologies — as well as its history of operating for decades without a global headquarters, with many of its employees working remotely — Accenture was well prepared when the pandemic hit.
Of course, responding to a pandemic comes with many challenges. Rowland recently spoke to Endpoint about supporting remote workers, the opportunities presented by today’s distributed business model, and how CIOs and CTOs can best speak to their CEOs and boards about the importance of digital transformation programs.
COVID has presented opportunities for technology-led innovation. Where are organizations leaning in?
This is a question I get in just about every conversation I have with C-level executives, clients, or prospective clients. There’s no doubt that COVID-19 has forced companies to take a hard look at where they are in their journey to adopt new technologies as a way to innovate, create a competitive advantage and drive more value for their shareholders.
How do those conversations with executives go? Where do you start?
When I talk to executives, I frame the population of companies into one of three categories.
First, you have the digital leaders, companies that have significantly invested in new technology in recent years before COVID. They have proven to be the best equipped and most resilient. They have had structural advantages, including a higher level of operational efficiency and the agility to quickly transition to remote working. They have been able to protect growth, and some have even taken market share as a result of digital capabilities in marketing, product and distribution channels, and customer engagement. In fact, pre-COVID, Accenture Research found that digital leaders grew revenue at two times the rate of laggards. My observation is the trend continued and probably accelerated during COVID.
Second, you have companies that are further behind the curve on adopting and innovating with new technology. They had taken some initial steps toward digitization before COVID. But then, as a result of the crisis, they heightened their commitment to significantly accelerate building their digital transformation capabilities in order to leapfrog their competition—and this is probably the largest category of companies.
Third, you have the category of digital laggards, who are perhaps trying harder but for a variety of reasons are not making progress navigating COVID and positioning themselves for the post-COVID environment.
The overriding theme is that COVID has created an increased appetite—or an acceleration—in companies adopting new technology as a foundational element of their strategy.
For the digital laggards, what are some of the reasons for that, either operationally or technologically?
I think it reflects either an industry broadly being challenged or a specific company being financially constrained. They have the short-term disease, where they are trying to survive the current quarter in a situation where their financial capacity is already limited. That would be the most consistent challenge for the digital laggards.
In some cases, you have a lack of management resolve, imagination or understanding of the imperative to take this on at almost any cost. People say every company is a technology company. If you don’t get that and step up to that challenge, it’s going to be tough to survive in the decade we have in front of us.
If a CIO or CISO fails to get money to fund their digital transformation programs, why is that? Are they not talking to their CEO in a way that lays out the benefits?
The most common issue is that they are unable to put together a compelling three-to-five-year view of the value that would be derived from going after a technology-led transformation. So, the storytelling around the strategy and the value is lacking within their internal organization, with their board, with the external investment community, with their customers, and so forth.
The second issue is that this is a very complicated landscape to navigate. I don’t mean that in a self-serving way given the business Accenture is in. But when undertaking a true digital transformation, you need help. For these major pivots of large businesses, it takes a village. You must cultivate strategic partners across a broad spectrum of the ecosystem to help you make that journey. If companies don’t recognize that, it’s a barrier to making the journey.
CEOs have mixed feelings about remote work. Netflix CEO Reed Hastings has said “Not being able to get together in person, particularly internationally, is a pure negative.” What’s your take on it?
Again, this is one of the top three topics that come up in every conversation I have with a C-suite executive. Looking narrowly at remote work is the tip of the iceberg. Remote work is part of a mosaic that is more broadly focused on how companies rethink the way people work—the tools, the processes, how people collaborate with each other, and the cultural aspects that accompany that. It’s not just about where they work.
Accenture research shows that 75% of clients fundamentally expect to rethink their work environment. I talk to many C-level executives across many different industries—and my personal interactions support the conclusion of our research. In fact, I would say the issue of work environment—and implications on culture, employee engagement and satisfaction, personal and team productivity, and things of that nature—is on the short list of most important strategic considerations, because it really gets to the fabric and DNA of an organization.
But there is no doubt that COVID and the learnings from this period of working remotely will have an enduring impact on the work environment strategy for all companies going forward—and I do think as a general rule you will see more virtual work environments as the norm—all enabled by the incredible technology that we have available to us in today’s world.
How will technology enable that distributed business model?
Work strategies will include more virtual work environments as the norm. Not exclusively, but they will be in the mix. Look at all the advancements in the technologies we use to connect and collaborate, not the least of which is video. COVID was game day for all the investments companies have made in video technology. And it stood up to the test. And I think companies were surprised at how efficient and connected they could be armed with this powerful technology.
What challenges did Accenture face in its transition to a remote workforce, to getting endpoints like laptops, tablets, and PCs into the hands of workers?
We had the benefit of being a digital leader. Our business has been very distributed and virtual for several decades. Nevertheless, we did learn a lot. Over a period of two weeks, we moved nearly our entire 500,000-plus employee population to remote working. We had challenges in certain locations where not everyone has high-speed internet connections in their home. And, of course, there’s the challenge many families face when our offices become our homes and we are balancing new family and work responsibilities.
Aside from the technology challenges, what else did you learn?
We learned it was critically important for us to listen rather than assume—and to act on what we were hearing. Because for so many of our employees, for a variety of reasons, remote working has been a hardship. For example, we learned about the importance of video for people who value connecting with their fellow colleagues. That was probably the biggest lesson and the biggest obstacle. It required a lot of listening and going beyond what would have been normal procedures and thinking to help people accommodate and thrive in a new reality.
What do you hear most from clients about navigating a way forward?
The common theme I hear from CEOs is, “We don’t want to go back to where we were pre-COVID.” Many of those CEOs realize their companies were innovating and adopting technology in a fragmented way. Certain parts of large global organizations were aggressive and pushing hard. Others weren’t. It wasn’t consistent. Now they want the entire organization hitting on all cylinders, pushing the technology adoption agenda. That’s a clear consequence of COVID.