Navigating transformation in turbulence

How enterprises can lead through disruption by building the digital fabric of the future

Hosted at the iconic St Paul's Cathedral, the HotTopics Food for Thought experience, in partnership with Tata Communications, gathered C-suite leaders for an open discussion about leading decisively through times of disruption and uncertainty.

In a relaxed atmosphere, the discussion began with a quick overview of the surrounding display of art, featuring oil paintings of the cathedral’s various deans.

Recorded under the Chatham House rule, and moderated by HotTopics Editor Peter Stojanovic and Editorial and Strategy Director Doug Drinkwater, the conversation kicked off with a question of market uncertainty and its impact on leading organisations through change.

Navigating transformation: Overview 

• A look at the macro lens of the global economy
• Being AI-literate
• The importance of forward-thinking and culture 

A look at the macro lens of the global economy

To what extent is market uncertainty either stalling your current transformation initiatives – or accelerating them? Do you go all-in, or can you be more reserved and hold back on some of the investments and programmes?

From the outset, it was clear that a lot of organisations are seemingly putting the brakes on their technology spending. 

The sheer number of investments often makes it difficult to put tangible numbers and benefits to all of them. As a result, in what one executive has called “organisational redesign” rather than full-blown transformation, companies are saving money and utilising those savings to power the most important initiatives for the organisation moving forward.

However, the roundtable agreed that the scope and progress of digital transformation are largely industry-specific. For instance, in the telecommunications sector, competition is a major driver of transformation. As Amit Mehrotra, VP, head of the UK & Ireland region at Tata Communications noted, “We connect to 90 percent of the cloud, [are the] largest wholesale voice provider. We do about 65 billion interactions... if you ever use an Uber or Amex card, or Sainsbury delivery, those interactions are managed by us.” The digital fabric they help weave has become foundational for businesses across sectors.

Given the pace of change, the days of long-term strategies are all but gone. Digital transformation is happening in staggered phases, because three-year and five-year roadmaps are less and less pertinent in the face of market instability. What is enabling these incremental changes is adaptive, phase-driven approaches. 

Cloud adoption and API-driven ecosystems have emerged as core enablers of this more agile transformation. 

As Sumit Walia, Chief Sales and Marketing Officer at Tata Communications, observed, “Cloud adoption is becoming more pervasive, and it is becoming mainstream, but cloud costs also are going out of control."

The key point for all was the importance of strategy and strategic, outcome-driven use cases. At the moment, many organisations are going through a pivoting phase to create more resilience, fortifying themselves to better manage near-term volatility – while staying focused on long-term readiness. 

As Walia put it, “Resilience becomes the focus in the short-term, and readiness for the future remains the focus for the long-term.”

Being AI-literate

How do you balance the here and the now - the short-term pressure with the longer-term aspirations of being AI-first organisations?

The conversation inevitably shifted to AI and the heightened expectations that come with it. 

Once again, the matter of use cases and their foundational significance popped up. For most speakers, an actual use case with a clear return on investment (ROI) is the starting point for leveraging AI in the organisational ecosystem. It rests on the fundamental understanding of the technologies at a higher level, where the technicalities drive the business questions. Governance is critical, such as identifying primary risks, locating frictions in the value chain and understanding the fast-moving regulatory landscape.

Naturally, economic and internal pressures will dictate the level of AI investments, but there is no doubt that the business landscape is witnessing a tectonic shift where AI simply demands a certain degree of investment- if only to keep pace with the competition.

A massively consequential aspect of being an AI-savvy company is managing expectations. Decision-makers tend to overestimate returns in the short-term and underestimate them in the long run.

This becomes particularly key when evaluating the proposed benefits, and use cases, against direct and indirect costs. Throughout this conversation, one recurring example of keeping assumptions in check was the total expense of cloud adoption. Numerous C-suite executives have failed to plan for the way the cost escalation has played out, not budgeting for the rising price tag, to the point where a whole industry of FinOps has sprung up just to manage creeping cloud costs.

Importance of forward-thinking and culture

How do you build teams that support the present day in the future?

With artificial intelligence firmly in the mix, the next topic was the human setup and capabilities to drive digital transformation and future-proof the business.

The prevailing sentiment was the gravity (or lack) of forward-thinking among the decision-makers. Most are too eager to see the transformation through, often driven by hype, fear of missing out (FOMO), or the desire for a quick win or two. While enthusiasm for AI's potential is commendable, over-eagerness and unrealistic expectations lead to considerable drawbacks and even project failures. To make matters worse, a lot of people aren't in the right roles to begin with. 

The consensus was that business leaders must first start by setting the proper team culture, one that appreciates what value and outcome team members are driving. Leadership support and involvement are critical, since without leadership buy-in, any AI project is doomed to fail. At the same time, there needs to be strategic alignment with clearly defined values of technology and data; otherwise, there will be a disconnect where AI won’t address real problems or integrate effectively.

Tata Communications' Mehrotra introduced a compelling framework for thinking about the future, describing it as a “hyper-connected ecosystem.” 

He shared, “We are creating a digital fabric. There are four legs of the digital fabric: network fabric, cloud fabric, interaction fabric, IoT fabric.” It’s this foundational structure, both technological and cultural, which allows organisations to withstand disruption and enable transformation.

The discussion also touched upon the need to foster cross-functional collaboration. Unfortunately, there is no shortage of organisations that assign the wrong people to AI initiatives, where they usually operate in silos, to add insult to injury. As a result, they have their objectives and can’t meaningfully influence the outcomes.

In conclusion

In the current landscape of global economic uncertainty, digital transformation seems to be evolving from broad, long-term strategies to phased, strategic investments aimed at building resilience and delivering quantifiable benefits. This shift emphasises targeted initiatives, particularly around AI and data, allowing organisations to adapt more swiftly.

At the heart of this transformation, AI success hinges on identifying clear, ROI-driven use cases and managing expectations, which is arguably a lesson learned from past technology adoptions, like the often underestimated costs of cloud. 

While there is no definitive answer on whether turbulence makes simple decisions easier because there is heightened risk, the human element remains paramount. A supportive team culture and unwavering leadership buy-in will be critical to avoiding the common pitfalls of over-eagerness and isolated efforts that can doom even the most promising transformation projects.

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