4 Ways Disruption Spurred Digital Innovation in 2021

In 2020, we witnessed mass disruption across the globe which caused significant setbacks for many organizations. However, those same challenges led to new marketplace needs that vastly accelerated digital innovation throughout most industries.

Retail, for instance, suffered significant losses due to the COVID-19 pandemic, but those same challenges propelled many organizations to pivot, innovate, and stay profitable during the tumultuous year.

Examples of digital innovation can not only offer insight into what business models work during times of struggle, but they show us fundamentally why innovation is critical to success, especially during today’s technology-driven era.

Digital innovation in 4 steps

Here are a few of the most impactful strategies that organizations adopted in order to innovate and fuel change during the COVID-19 pandemic and through to today.

1. Remote working

Remote working, or the work-from-home (WFH) trend, is the digital disruption that (literally) hit home for most of us. As organizations around the world adapted to public safety measures, employees turned living rooms, spare bedrooms, or even backyards into their new offices.

This need to adopt a remote working environment required that organizations and their people innovate in several ways:

• Employers had to design new workflows, standardize updated business processes, teach employees how to work from home, and implement up-to-date cybersecurity procedures
• Employees needed to pick up and utilize these new workflows across remote working software, such as video conferencing applications
• Remote working also compelled many organizations to accelerate their migration to the cloud

For years, remote working has been a subject of debate in the business world, with some touting its benefits and others emphasizing its downsides. However, after discovering that the pros outweigh the cons, one likely outcome of the pandemic and this transition to remote working is that we’ll see more hybrid and remote workforces.

2. Cloud computing

Another outcome of pandemic-driven innovation was the sprint to adopt cloud computing. While the concept of cloud computing was invented in the 1960s, the actual infrastructure only became available circa 2006.

It is the continued development of this infrastructure that enables tens of thousands of companies to continue their operations remotely.

Just as remote working will become a more permanent part of the workplace, so too will cloud computing.

There are several reasons why:

• Cloud computing is often built on more flexible pricing models, such as pay-per-use, which enables fast scaling and cost savings
• Without cloud computing, remote working and certain types of remote applications would be impossible
• Operating from the cloud improves organizational resilience by enabling cloud backups and more flexible workforce management options

Based on just these few (of the many) benefits offered by cloud computing, we can already be sure that the cloud will become increasingly central to most business models.

3. Digital customer experiences

Consumer preferences also shifted dramatically during 2021. 

Online shopping skyrocketed as a result of the pandemic. So much so that e-commerce capability determined which companies succeeded and which failed.

Amazon and other organizations that offered e-commerce solutions saw major spikes in sales numbers. Companies that weren’t offering online shopping options, on the other hand, suffered and several even filed for bankruptcy. 

At the same time, this shift towards online shopping and the digital customer experience drove a wedge between industries that offer “legacy” technology, such as point-of-sale (POS) systems used in retail stores and those that offer innovative digital-first technologies, such as digital wallets.

The surge in online shopping will recede, as evidenced by some surveys, which show a strong desire to return to malls and retail stores. However, like remote working, online experiences will become increasingly permanent in our digital world.

4. Digital-first businesses

Yet another ongoing trend that was accelerated by the pandemic was the adoption of digital-first business models.

While the terms “digital-first business” and “digital business” may have slightly different meanings depending on who you ask, both revolve around the use of digital technology at the core of the business.

This means:

• Adopting digital technology and leveraging that technology to improve organizational performance, efficiency, and resilience
• Using digital technology to differentiate oneself from competitors and gain an edge in the marketplace
• Implementing digital strategies and technologies that drive the business strategy
• Cultivating cultures that are founded upon digital workflows, digital-first mindsets, learning, and agility

In short, for many organizations, the pandemic hammered home the need to not just take advantage of technology, but to put technology at the heart of the organization, the business model, and the workplace.

Key takeaways

One of the most important takeaways from these examples is the fact that crises often force adaptation, and yet, emergencies shouldn’t be the sole driving factor behind investment in innovation.

As the COVID-19 pandemic made clear, the companies that were most prepared were those that had explored innovative solutions in advance. What this shows us is the importance of building resilient business models so that we are not caught unaware when a crisis does strike.