Three phases of business transformation

We are moving into the third year of COVID-19. For businesses and their customers, it has been a journey of shock, adjustment, and adaptation. We have observed three phases of how organizations transformed in response to changes in their customer and consumer behaviors during the onset of COVID-19 up to the present.


The first phase is the phase of shock which happened in 2020. Businesses and people were caught by surprise when the global and local cases of COVID-19 accelerated in March 2020, several countries announced lockdowns during the same period, heralding the onset of a pandemic and a global crisis. This was the first in our lifetime to experience something like this.

During this phase, people were forced to follow a set of norms, such as social distancing and working from home, for fear of getting infected, making people struggle with day-to-day life. Consumers stopped buying many things, as everyone braced for the looming global recession. We detected an emergent and overarching need of consumers during this, that is, the need to cope. This gave rise to new consumer market segments who struggled to manage demands of the situation involving financial, physical, mental, emotional, and spiritual resources.

On the other hand, businesses hurriedly implemented business continuity plans and struggled to tweak their business models. Companies were forced to pursue digital transformation strategies as a knee-jerk reaction. In fact, during this phase, more than eight out of 10 (86%) small- and medium-sized enterprises (SMEs) in the Philippines identified digital technology adoption as the way to improve business processes and 55% reported being at the “very early stages of digital transformation”, according to a survey commissioned by Epson in mid-2020. Companies hurriedly implemented business continuity plans but struggled to tweak their business models.


The second phase is the phase of adjustment, which happened in 2021. People took to digital media to work, to get entrained, and be connected with friends.

One cognitive bias among people that we observed during this phase was the fear of missing out, or FOMO. It’s a social anxiety a person experiences that stems from his or her belief that others might be having fun while he or she is not around. We saw this in people joining online workouts and cooking classes, binge-watching on Netflix, and trying new mobile apps.


We witnessed the accelerated adoption of e-commerce, digital payments, social media, and videoconferencing platforms among people and consumers. This was the reason why organizations needed to also accelerate their digital transformation efforts to adjust their operations and marketing activities. We observed a jump of 100% in cloud computing adoption among Philippine organizations, in order to scale their digital initiatives faster. Companies hastily moved to e-commerce and social media to market and sell to customers.

But this happened with a price. Customer experience was compromised. Poorly designed apps and online stores resulted in bad customer reviews. One example I always cited was one large grocery chain which set up an online ordering system at the start of the pandemic, only to annoy customers in the end because a person will call the customer to inform that some stocks were not available.

Notwithstanding the lack of seamlessness of customer experience when using these digital apps during this phase, consumers were generally willing to forgive companies struggling with pandemic-related disruptions.


Phase three is a phase of adaptation. This is where we are at now, at the onset of 2022, when people have adapted to the new normal. This is when “consumers will see the world as all-digital, with no divide”, as forecasted by consulting firm, Forrester. Furthermore, consumers also “expect companies to double down on building a successful and sustainable digital customer experience”.

As most companies are now using the digital medium, customers will be more discerning and will always be on the lookout for excellent customer digital experience. In the Philippines, digital consumers shop an average of 7.8 websites in 2021, an increase from 4.3 in 2020, according to a Facebook and Bain & Company report. This year, we expect consumers to visit more websites, as more and more alternatives come out. Customer behaviors, habits and priorities will continue to evolve.

This is why in this phase, digital transformation efforts of companies should focus on providing a seamless and positive customer experience across all digital and physical touchpoints. Companies should continually adapt to evolving customer needs and habits. A well-thought-of digital experience for customers that considers the entirety of the customer journey is what will separate the winners from the mediocre players.

The author is the Founder and CEO of Hungry Workhorse, a digital and culture transformation consulting firm.He is the Chairman of the Information and Communication Technology Committee of the Financial Executives Institute of the Philippines (FINEX). He is a Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at