'Darwinian moment:' Pandemic pushes some Canadian companies to thrive, others to fail

With the threat of extinction hanging heavy over companies during the pandemic, a top tech executive says we're having a "Darwinian moment" that will see some firms emerge stronger while others will succumb to difficult conditions.

Microsoft Canada president Kevin Peesker said in an interview that COVID-19 has been a catalyst for digital transformation.

But he said while some companies have harnessed technology and innovation to build resiliency and thrive, other businesses are struggling to survive.

"It's a bit of a Darwinian moment where those who have made investments and built up skills within their organizations were the ones that were quickly able to adapt," he said. "Those who didn't were faced with the circumstances of the market around them changing so rapidly and not being able to respond in time."

It could help explain why Canada's economic recovery has been uneven, with some companies growing during the pandemic while others have failed.

Some of the discrepancy is clearly tied to a company's sector or location. A retail store in a downtown business district that relies on foot traffic from office workers, for example, never stood a chance.

Yet even within specific sectors in the same location, some businesses have fared better. The secret to that resiliency could lie in the company's overall attitude to innovation and technology adoption.

"Companies that are early adopters of technology gain a productivity edge and have a greater likelihood of survival," said Dalhousie University economics professor Lars Osberg.

The difference in a pandemic is that the normal evolution of business has been rapidly accelerated.

Market changes that ordinarily would have taken years to play out have taken place over a few short months.

"We've seen an unprecedented level of transformation from a digital perspective in the last few months," Peesker said.

"Businesses have built in days or weeks what would have previously taken months or years."

Yet the tools needed to respond quickly to challenges can extend beyond tech tools into more intangible aspects of business.

3M Canada president Penny Wise said building resiliency and agility into an organization's operation starts with "fostering a culture of curiosity."

She said when innovation and invention are "baked into" a company's culture in good times, it can respond to problems faster during difficult periods.

"In 2020, the businesses that have been able to pivot and adjust to the pandemic have thrived while unfortunately other businesses haven't made it," Wise said.

"At 3M, so much of what we've done ... has been about problem solving and improving our capacity to understand difficulties and driving invention to solve those problems."

It's not just global juggernauts like 3M and Microsoft that have taken advantage of innovation and technology.

Indeed, Peesker said the same business tools that help make a big companies successful can work for smaller outfits.

Take Lane Sales and LS Logistics in Guelph, Ont., for example.

The company is a third-party fulfilment centre, which warehouses and ships products on behalf of manufacturers to their retail customers in Canada.

A few years ago, the company invested in business process management software.

"We were growing our business and wanted to get beyond managing Excel spreadsheets," president Brendan Lane said. "We invested a lot of money but we needed to know for sure what was coming in and out."

Lane said the growth in online shopping during COVID-19 shutdowns increased demand for his services and the new software was an important part of securing new business.

"We're a third-party at arm's length, so those tighter inventory controls are essential," he said. "Our customers like to have full visibility of their inventory and business."

For companies that haven't yet invested in technology and innovation, Peesker shared some advice.

"It's not too late," he said. "The same platforms that allow a Microsoft or a 3M to be successful in adapting are absolutely available to the smallest of businesses."

As the second wave extends across much of the country, Peesker said "it is in these moments, where we are most challenged as a country, that innovation is rewarded."

"If there are any upsides of the pandemic, it's that it has been a catalyst for us to really wake up in awareness to enhance the skill levels of Canadians, and to better prepare Canadian organizations to compete on the global stage."

This report by The Canadian Press was first published Nov. 2, 2020.