This study investigates how organizations should prioritize their digital investments during a crisis. Based on an in-depth analysis of 18 Australian organizations' responses to the COVID-19 pandemic, the paper provides a framework for IT leaders to decide whether to exploit existing digital capabilities or explore new ones.
Problem
In times of crisis, organizations rely heavily on their digital capabilities for survival and adaptation. However, IT leaders face the critical dilemma of whether to focus limited resources on making the most of current technologies (exploitation) or investing in new, innovative solutions (exploration), with little guidance on how to make this choice effectively.
Outcome
- Organizations should assess their 'starting position' at the onset of a crisis across five key factors: people, cultural, technical, managerial, and financial. - Based on this assessment, one of three crisis responses should be pursued: 'Survive', 'Survive and Thrive', or 'Thrive and Drive'. - For a 'Survive' response, organizations should focus exclusively on exploiting existing digital capabilities to maintain operations. - A 'Survive and Thrive' response requires initially exploiting current capabilities, followed by a later shift toward exploring new ones. - Organizations in a strong position can pursue a 'Thrive and Drive' response, concurrently exploiting and exploring capabilities, with an increasing focus on exploration as the crisis progresses.
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I’m your host, Anna Ivy Summers. In a crisis, business leaders have to make tough calls, especially when it comes to technology. Today, we're diving into a fascinating study titled, "Setting Priorities for Exploiting and Exploring Digital Capabilities in a Crisis". It provides a framework for IT leaders to decide whether to get the most out of their existing digital tools or to invest in brand new ones. Here to unpack it all is our analyst, Alex Ian Sutherland. Welcome, Alex.
Expert: Great to be here, Anna.
Host: Alex, we’ve all seen how the recent pandemic forced businesses to pivot almost overnight. What was the core technological dilemma that leaders were wrestling with?
Expert: The big question was where to put scarce resources. Do you double down on the technology you already have, just to keep the lights on and serve existing customers? The study calls this 'exploitation'—making the best of what you have.
Host: Or... the alternative?
Expert: The alternative is 'exploration'—investing in new, innovative solutions, or doing new things in better ways. The dilemma is that if you only focus on exploitation, you risk getting trapped with outdated tech when the crisis is over. But if you over-invest in exploration, you could run out of money before seeing any real benefit. It’s a very high-stakes balancing act.
Host: So how did the researchers figure out the right way to balance these two priorities?
Expert: They took a very practical approach. They conducted an in-depth study of 18 different Australian organizations across various industries—from healthcare to construction. They interviewed 27 IT leaders right in the middle of the pandemic to see what decisions they were making in real-time and what the outcomes were.
Host: It sounds like a view from the corporate trenches. So what did they find? Is there a one-size-fits-all answer for businesses?
Expert: No, and that’s the most important finding. The right strategy depends entirely on what the study calls an organization's 'starting position' at the moment the crisis hits.
Host: 'Starting position'? What does that mean exactly?
Expert: It's an assessment of the company's health across five key factors. First is People: what are your team's digital skills? Second, Cultural: is your company risk-averse or innovative? Third, Technical: how modern is your IT infrastructure? Fourth is Managerial: how strong is your leadership and your processes? And finally, Financial: what do your cash reserves look like?
Host: Okay, so you assess your company against those five factors. What happens next?
Expert: Based on that assessment, the study identifies three clear response paths a company can take: 'Survive', 'Survive and Thrive', or 'Thrive and Drive'.
Host: Let's break those down. What does a 'Survive' response look like?
Expert: If your starting position is weak—say, you have limited cash and legacy IT systems—the only goal is to survive. This means you focus exclusively on exploitation. You use your existing tech to automate and stabilize core operations. Forget new, risky projects; just keep the business running.
Host: That makes sense. What about the next level, 'Survive and Thrive'?
Expert: This is for companies in a stronger, middle-ground position. The strategy here is sequential. First, you exploit your existing tech to stabilize the business. But once you have some breathing room, you begin to explore new digital capabilities. The study highlights an aged care provider that first used existing tools for remote consultations, then later hired a new IT leader to explore innovative partnerships.
Host: And finally, for the companies that were in a great spot when the crisis began?
Expert: They can pursue a 'Thrive and Drive' response. These organizations have strong finances, modern tech, and an innovative culture. They can do both exploitation and exploration at the same time. One construction company in the study was able to streamline its current operations while also doubling its fleet of drones for new types of automated assessments. They didn't just survive; they used the crisis to accelerate past their competitors.
Host: This is incredibly practical. For a business leader listening right now, what is the single most important takeaway? How can they apply this framework?
Expert: The first step is to perform an honest self-assessment. The study even suggests a simple 'traffic light' system. For each of the five factors—People, Culture, Technical, Managerial, and Financial—rate yourself as red, yellow, or green. Red means the factor is hindering you, while green means it's accelerating you.
Host: So you get a clear, visual snapshot of your company's readiness.
Expert: Exactly. That snapshot tells you which of the three strategies you should adopt. It replaces gut feelings with a structured roadmap for making critical decisions under immense pressure. It tells you exactly where to focus your limited time, money, and energy.
Host: And I imagine this isn't just for navigating a crisis that's already here.
Expert: That's the most powerful part. The framework is really about preparing for the *next* crisis. By understanding these factors, leaders can start working today to improve their starting position. They can ask, 'What do we need to do to move our company from a 'Survive' position to a 'Thrive and Drive' one?' It’s a blueprint for building long-term organizational resilience.
Host: A fantastic summary. So, when a crisis hits, the key is to first assess your starting position across people, culture, tech, management, and finances.
Host: Then, based on that assessment, you choose your strategy: 'Survive' by focusing only on existing tech, 'Survive and Thrive' by stabilizing first and then innovating, or 'Thrive and Drive' by doing both at once.
Host: And crucially, you can use this framework right now to build a stronger, more resilient organization for whatever comes next. Alex, thank you for breaking that down for us.
Expert: My pleasure, Anna.
Host: That's all the time we have for A.I.S. Insights. Join us next time as we continue to explore the ideas shaping our world. I'm Anna Ivy Summers.
crisis management, digital capabilities, exploitation, exploration, organizational ambidexterity, IT leadership, COVID-19
