Crisis strategies in High-Tech ventures

Crises are events perceived by organisational members as sudden, unexpected and massively disruptive (Hoelscher et al., 2022) in that they pose significant threats to firms in particular and economies and individuals in general (Newman et al., 2022). Organisational responses to crises range from passive attempts to cope with the consequences of the crisis to active efforts to change organisational processes to adapt to the new context following the crisis (Newman et al., 2022). Such adaptations range from minor improvements to existing processes, which enable organisations to persevere with their current strategic direction, all the way to major reconfigurations of existing processes and products which support organisational-wide innovation and change (Berends et al., 2021; Guckenbiehl and Corral de Zubielqui, 2022; Puthusserry et al., 2022; Wenzel et al., 2020). How organisations respond to a crisis is closely related to the concept of organisational resilience. Organisational resilience refers to organisational efforts to “maintain functions and recover quickly from hostile situations” (Hillmann and Guenther, 2021, p. 31). Organisational responses to adverse events, for instance, their efforts to cope with the consequences of a crisis by maintaining functions, and the nature of their recovery through adaptation or innovation, are thus also a function of their resilience. Research distinguishes between different aspects of resilience, which are closely related to various types of crisis response strategies, including, for instance, the ability to adapt, cope and reinvent existing activities (Hillmann and Guenther, 2021).

Both research on crisis responses and resilience highlight the fact that the nature of the crisis matters in shaping these responses (Guckenbiehl and Corral de Zubielqui, 2022; Hillmann and Guenther, 2021). For instance, the COVID-19 pandemic created a context that accelerated digital transformation within firms, through encouraging organisations to leverage digital technologies to coordinate their internal operations, manage their human resources and direct their interactions with consumers (Margherita et al., 2023). Moreover, during the COVID-19 pandemic, digital technologies have been pivotal in enabling ventures to increase their access to global markets and develop novel forms of knowledge transfer, thereby augmenting ventures’ capacity to survive and grow (Audretsch et al., 2024). Thus, digital transformation is an important aspect reflecting the impact that the COVID-19 crisis has had on existing firms. Furthermore, Mtibaa et al. (2024) suggest that organisational efforts to pursue digital transformation more broadly impact their resilience because they positively influence customer experience, business models and operational processes. Thus, digital transformation seems to play an important role in understanding how firms responded to the COVID-19 crisis.

While existing research has examined organisational resilience extensively (see Hillmann and Guenther, 2021) and firms’ strategic responses to crises (Newman et al., 2022), there is less research considering the relationship between digital transformation and crisis responses and resilience, and in particular, how firms respond to crises by pursuing digital transformation.

This study aims to answer this question in the context of high-ventures responding to the COVID-19 pandemic. The study examines the impact that the COVID-19 pandemic crisis has on high-tech ventures by investigating the changes these ventures make to their business operations and to their product/service offerings in response to the crisis. Our findings point to the important role that crisis interpretations – how these ventures make sense of the crisis as a sustaining or disruptive force - play in shaping these responses. Different crisis interpretations encourage ventures to pursue distinct changes in their existing processes and product and service offerings in response to the crisis. Different responses translate into different approaches to engage in digital transformation. Our findings bring a better understanding of how high-tech ventures respond to crisis, and in so doing develop resilience in times of disruption, offering insights for future crisis preparedness strategies.

The paper is structured as follows. The next section reviews the existing literature discussing crisis responses and digital transformation. The next section presents the research design, followed by the description of the findings and the discussion of the results. The last section outlines the contributions to theoretical knowledge, discusses the research limitations and identifies areas requiring further exploration.

How firms respond to crises has been investigated across different management fields, often employing slightly different concepts. Strategy and innovation researchers have considered the range of strategies which organisations deploy to respond to crises (Wenzel et al., 2020), particularly their ability to develop strategic flexibility (Herhausen et al., 2021) and leverage specific resources and capabilities (Mortara et al., 2022) to support these responses. Organisational studies and operational management researchers have examined organisational resilience. Originally conceptualised as the ability to revert to the status quo (Annarelli and Nonino, 2016), recent research has expanded the concept of resilience to encompass the capacity for renewal and transformation (Hillmann and Guenther, 2021). Finally, entrepreneurship scholars have investigated entrepreneurial firms’ responses to uncertainty (Berends et al., 2021) and crises (Newman et al., 2022), and the interaction between individual- and firm-level entrepreneurial resilience (Branicki et al., 2018). These studies have proposed a range of different classifications of crisis response and resilience strategies, underpinned by different criteria. A common criterion pertains to the motivation driving firms’ responses, with existing research differentiating between active versus passive (Newman et al., 2022), proactive versus reactive (Puthusserry et al., 2022) and instinctive versus strategic (Miklian and Hoelscher, 2022) responses. Another criterion concerns the modes through which firms execute their responses to crisis, such as leveraging internal resources, market (re)positioning (Herhausen et al., 2021), networking (Miklian and Hoelscher, 2022) and buffering or bridging between actors (Bode et al., 2011). Finally, another common criterion relates to the organisational effects of these responses, including coping or retrenchment by cutting activities, persevering or sustaining activities by adapting to the new context and pivoting or transforming by radically changing organisational activities or business models (Berends et al., 2021; Hillmann and Guenther, 2021; Glukenbiehl et al. 2022; Powell and Baker, 2014; Wenezel et al., 2022). Considering our focus on understanding the impact that crises have in terms of the digital transformation of the organisation, we focus here on the last criterion, which reflects the nature of change in the organisation. Existing research on resilience and crisis responses has identified different aspects of change that matter when considering organisational crisis response strategies, including the content, direction and novelty of change. The content of change differentiates between responses that affect different organisational aspects, such as business model versus specific products or processes (Guckenbiehl and Corral de Zubielqui, 2022). Direction of change differentiates between responses that allow organisations to maintain or change their strategic direction (Berends et al., 2021; Powell and Baker, 2014). Finally, novelty of change differentiates between responses that radically transform versus those that make incremental adaptations in organisational processes, products and models (Bunduchi et al., 2024; Puthusserry et al., 2022).

Existing research on crisis responses thus shows that crises can be major drivers of organisational change. One such form of organisational change involves digital transformation. Digital transformation refers to the process of leveraging digital technologies to reshape a company’s business model, product offerings and organisational structure (Hess et al., 2016, p. 124). Digital transformation has been acknowledged as an important approach for strengthening resilience (Schallmo et al., 2019), particularly in relation to the COVID-19 crisis (Margherita et al., 2023). The pandemic prompted a dramatic increase in the use of digital technologies, enabling companies to reduce face-to-face interactions while safeguarding customer and employee health and well-being (Kane et al., 2021). Companies that are capable of adapting and are prepared to learn and improve by transforming their organisations in response to new variables, including through using digital technologies, are likely to demonstrate resilience and to survive and progress (Li, 2020). Leveraging digital technologies across the range of business processes, including coordinating internal operations, managing human resources and organising customer interactions, is critical in enhancing organisational preparedness in times of crisis (Margherita et al., 2023). While there is extensive research on cataloguing organisational responses to crisis, there is less effort to understand how such responses affect the digital transformation efforts of the organisation. This justifies the research question in this study, namely: How do firms respond to crises by pursuing digital transformation?

While existing research shows that crises lead to organisational change, how this change manifests in organisations depends on their interpretation of the crisis as an opportunity or a threat (Powell and Baker, 2014). On one hand, experiencing crises as threats can lead to adverse emotional responses among employees, such as heightened anxiety and fear, potentially disrupting decision-making and diminishing operational effectiveness (Nikiforou et al., 2023). On the other hand, viewing crises as opportunities encourages innovation, enabling organisations to explore new avenues for growth and development (Powell and Baker, 2014). For instance, research finds that interpreting crises as opportunities rather than threats strengthens organisational resilience by uncovering potential for expansion and creating competitive advantages amid challenging circumstances (Lengnick-Hall et al., 2011). Straus et al. (2023) highlighted that remote employees with a high level of confidence in their abilities, who also benefitted from social support, reported higher levels of well-being, productivity and engagement. Furthermore, a positive perception of crises as opportunities encourages a problem-solving mindset and fosters an environment that values opportunity recognition, both of which are critical factors that enhance organisational resilience (Zhai et al., 2023). This research linking crisis interpretation to crisis responses suggests that to understand how firms respond to crises by pursuing digital transformation, we need to consider how firms and their employees, interpret the crisis in the first place.

This study explores the impact of the COVID-19 pandemic on high-tech ventures, focusing on their actions to respond to the crisis by pursuing digital transformation. We consider here both firms’ strategic responses to the crisis, entailing modifications in their operational processes and product offerings and their perceptions of the crisis, either as a sustaining force or a disruptive event, that informs these responses. We focus here on the software sector, and interviewed founders and senior managers in 23 software-producing firms ranging from micro-enterprises with 6 employees to large organisations with over 10,000. The median age of our organisation is 11, and the median size is 38 employees. About half of these organisations were headquartered in Romania, with the rest being based in Europe and Asia. The interviews took place a few months after the crisis started, in June-July 2020.

The interview guide covered topics ranging from background information on the company and its activities, including a description of the company’s product and strategy, and an in-depth discussion of the impact that the COVID-19 crisis. The latter covered different areas of the organisational activities, including: the nature of products and services developed, the interactions with clients, suppliers, investors and other partners outside the firm, the coordination of internal operations, the management of human resources and revenue models.

To analyse the data, we relied on thematic analysis and employed Huberman and Miles’ (1994) approach to iteratively move between coding, including description, interpretation and pattern coding, validation against a new round of interviews and going back to the literature to refine the emerging patterns. The list of codes was developed abductively, through a combination of inductive and deductive coding. While we started with a list of codes developed based on existing research, which included the different types of crisis interpretations (opportunity versus threat), and crisis responses involving changes in business operations and products (coping, adaptatoin and innovation), these codes were refined gradually as the analysis progressed allowing for new categories to emerge from the data. The final list of codes covering the types of interpretations and changes in processes and offerings is discussed in the findings section. This interative process led to the identification of recurring patterns that characterise the key changes made to processes and products by the different organisations, accounting for variations in the company size and their market focus, and linking these to the different interpretations that firms developed concerning the crisis.

The findings are organised around the three categories of codes we have examined: the interpretations of the COVID-19 pandemic that our firms developed, the changes they have made in their business processes and in their product and services in response to the crisis.

Our study reveals two primary interpretations of the COVID-19 crisis among our high-tech ventures: one interpretation involves seeing the crisis as a sustaining change that does not significantly alter the organisations’ long-term strategic plans. At the same time, the other considers the crisis a disruptive force that requires the organisation to alter its strategic plans to reflect the new context created by the aftermath of the crisis. These different interpretations are the result of differences in the characteristics of the market the firms target, in the stability of their revenue streams, and in their strategic flexibility in responding to uncertainty within the 3 to 4 months after the start of the crisis (see Figure 1).

Sustaining interpretations were developed by high-tech ventures whose response is to continue with their existing approach concerning both their operations and their products and services. We distinguish here between two interpretations concerning the temporal nature of the crisis, which lead to different responses. The first interpretation saw the crisis as a temporary and thus passing event, with expectations that things would get back to “normal”, i.e. the conditions before the crisis (stability maintainers). The second interpretation saw the crisis as a permanent event, but sustaining rather than disruptive in nature (strategic continuers). Both interpretations involved the firm choosing to respond to the crisis by continuing with its current approach, without making major changes. Each of these responses was underpinned by a different set of expectations.

(1) Stability Maintainers consider the crisis as temporary, with no long-term impact on their activity, and decide to continue with their existing strategy, making no noticeable changes to their processes or products. The reasons our respondents cited to explain this interpretation and justify their response included reliance on what they expected to be steady sources of income, e.g. EU contracts, well-established niche markets which were not seen as being impacted by the crisis, or where even a decline in clients’ volume of the activity was not expected to immediately affect their usage of the product.

(2) Strategic Continuers perceive the COVID-19 crisis as accelerating existing trends, which were already identified and addressed as part of their current strategies and continue on their existing path, without any significant changes to their processes or products. Generally, these already identified trends included changes in customer behaviours, which were addressed by our firms through pursuing customer-focused strategies. The COVID-19 crisis was expected to accelerate ongoing changes in customer behaviour, who were expected to be increasingly more focused on the overall value that firms provide as a portfolio of products and to pay more attention to cost, rather than to the stand-alone product itself.

Disruptive force interpretations were developed by organisations that embark on significant changes either in their operations or in their value offerings. We distinguish here between two approaches that firms take to respond to the disruptive changes posed by the crisis. These responses were underpinned by a different approach to decision-making in different firms.

(3) Cautious Respondents, which take a more cautious approach, hold off on making significant changes to their activity to first take stock of what the effects of the crisis are on their market, before acting. This response involves a more planned approach to decision-making, where firms seek to first assess the situation more fully, plan and then make a decision.

(4) Experimental Adapters which experiment by different approaches to understand what works by either making changes in their value offering, for example by testing new technologies, developing new product features to better serve their existing customers, look for new ways to commercialise products or expand into other domains; or making changes in their existing operations, for example by finding new ways to commercialise products. This response involves a more emergent approach to decision-making, where the firms are willing to learn gradually and develop their decisions incrementally.

To some extent, these different interpretations of the crisis – as sustaining or disruptive – are related to the market that the business serves and the extent to which its clients are perceived to have been affected by the crisis. COVID-19 led to significant drops in demand in sectors such as the textile and retail industry, real estate and transportation and has likewise significantly affected small clients. Firms that served these markets are more likely to see the crisis as a disruptive event, requiring them to change their activity to address the significant transformation they experience in their markets. In contrast, we noticed some increase in demand in other sectors such as food retail and IT healthcare products, as well as more broadly an increase in the demand for digitalisation and IT operations, for automation and optimisation solutions of infrastructure. Consequently, firms that target these sectors, or more broadly offer digitalisation solutions to a wide range of clients, are more likely to see the crisis as a sustaining event that positively affects their markets. This positive effect encourages them to continue on their current activities, requiring no imminent change to their current strategies.

The timing of our study, conducted in the early months of the COVID-19 crisis, highlighted several key impacts on firms’ internal operations and processes. The most prominent effects were related to shifting to remote working and facilitating internal communication, managing customer relationships, hiring practices and internal decision-making. The changes identified and summarised in the organisational process are shown in Figure 2.

Changes to remote work were discussed by the respondents in terms of (a) the ease of adaptation and (b) the impact of remote work on organisational performance:

• Ease of Remote Adaptation: Several factors influenced how easily organisations transitioned to remote working following the strict lockdown measures imposed across most EU countries. Prior experience with remote work played a significant role. Organisations that had already incorporated remote working into their operations – either extensively or partially – found the shift more manageable. Conversely, firms that were previously resistant to remote work struggled with the imposed transition. The nature of the business activity, particularly in software development, affected the adaptability of organisations. Many software firms found remote work easier to implement due to the accessibility of essential tools, such as laptops and stable internet connections and their employees’ inherent familiarity with digital technologies. The generalised preparedness for remote work influenced the speed of transition. Some organisations had already integrated remote working into their business continuity plans, adopted ISO security standards or implemented agile frameworks, which facilitated a smoother transition.

• Impact of Remote Work on Productivity: Across all organisations, the shift to remote work had significant implications for productivity based on three factors. Individual employee circumstances – such as whether they had dependents at home – impacted productivity levels. Efficient employees tended to maintain or improve their productivity in a remote setting. Adaptability also played a role, with workers who embraced change quickly showing higher performance levels. Company-related factors also influenced productivity outcomes. Decentralised, flexible and goal-oriented organisations generally reported improved productivity levels, while companies with less digital preparedness struggled. Organisational culture, particularly whether employees had prior experience with online communication, also affected performance. The nature of the work itself impacted productivity trends. For instance, product development teams experienced reduced efficiency during the early ideation phases, as creativity and collaboration were hindered by remote settings. In contrast, technical departments such as software development often saw productivity increases, given the independent nature of their tasks. To respond to the pressures remote work placed on employees’ productivity, firms pursued a range of solutions to support adaptation, productivity, flexibility and resource optimisation. First, to address low motivation, lack of focus and burnout among employees, firms sought to implement virtual socialisation opportunities, encouraged experience-sharing among colleagues and provided structured relaxation alternatives, such as reclaiming commute time for creative activities. In addition, remote work effectiveness varied across different organisational units. Sales teams, for example, required additional support to develop new skills, whereas software development teams generally benefitted from remote work due to the nature of their tasks. As a result, firms had to establish differentiated support mechanisms tailored to specific roles to ensure continued efficiency and engagement.

In addition to the impact on productivity, the switch to remote working also led to significant changes in internal communication. We distinguish here between three different aspects of these changes: “How?”, “What?” and “Where?” to communicate:

1. How? Remote work increased the concerns organisations developed with respect to the processes involved in how to work, interact and communicate to maintain or increase efficiency and effectiveness of communication, especially in the case of small companies located in countries where the effects of the crisis were delayed. In large companies operating in countries that were impacted by COVID-19 early on, the transition was smoother, often as part of an existing business continuity plan. Small companies, with limited prior exposure to remote working, took more time as they had to learn how to work, interact and communicate efficiently to overcome the physical distance. The lack of equipment and conditions meant that small business owners had to work in isolation, so they found it difficult at first both to support clients remotely and to coordinate internal work, while in some cases, their employees were forced to stop most of their activity. The switch to remote working forced organisations to consider how to support internal communication. Remote work required the use of new types and a greater frequency of online meetings. Firms also had to offer key employees easy access to new channels for decision-making and problem-solving, and often had to develop new procedures to ensure accessibility and acceptability of new approaches to communication in a remote environment.

2. What? Remote working requires changes not only to the modes of communication but also to the content of the communication. We found that managers’ main communication-related concerns in these first months of the crisis were directed at building a culture to strengthen employees’ trust in the organisation’s approach to responding to the crisis. For this purpose, internal communications included regular updates on the COVID-19 crisis, relevant to each country location, often relying on dedicated channels to support internal communication about COVID. Internal communication also included messages meant to encourage new forms of social interaction to preserve motivation, health and productivity in the workforce. The challenges were associated with difficulties in maintaining employee collaboration and ensuring efficiency in remote work systems. It was noted that sustained efforts were required to develop an organisational culture to facilitate social interactions, support employee well-being and cultivate a sense of belonging to the organisation.

3. Where? Remote working also required a change in the channels used for communication, moving from face-to-face interactions to online, relying mostly on technology, but in many organisations, this change was not necessarily complemented by changes in the “how” or “what” of internal communication practice.

A few organisations also reported changes in the interaction with their customers, including (a) Payment Flexibility which involved renegotiation of payment terms, mostly related to the need to facilitate customers’ ability to pay; (b) Digital Engagement which implied changes in customer interaction due to the shift to remote working, for example, relying on digital tools to communicate rapidly crisis-related guidelines in the use of their products and services; and (c) Value Driven Services which refered to focusing on delivering services that provide more value to customers seeing the changed brought by the crisis, rather than new product functionalities, for example developing new sales support activities on how to endure during the crises, and offering new services such as business continuity plans to accelerate customers’ digital transformation.

Some organisations also noted changes in their hiring processes, which, in most cases where such changes were noted, were impeded or delayed. We have observed a tendency to replace hiring new employees with partnering with other organisations to cover the rising demand. In other cases, respondents noted that the crisis led to instability in the labour market, which created new opportunities for them to access knowledgeable employees who were fired by competitors and who, seeing the instability, may accept lower salaries. The crisis was also noted to accentuate the importance of redesigning the recruiting process, for example, by noting that a permanent shift to remote working opens up opportunities to access talent and recruit from far-flung places and remotely.

We noted in a few organisations changes in the decision-making process, including a greater emphasis on decentralised flexibility to organise work from home (e.g. by accommodating different people with different requirements, developing sharing communities to enable equal access to information to support activity); and an agile governance approach wich took the form of rapid decision-making to cope with fast-paced changes in the context in which organisations operate. An example of such an agile governance approach includes setting up a COVID-19 committee to guide decisions to facilitate changes in procedures, improve productivity and sustain a more agile decision-making. These changes were, however, not widespread yet and were mostly noted in larger organisations that had the resources, as well as possibly the need, to consider flexibility and speed in decision-making.

In examining how organisations made changes to their product and service offerings following the crisis, we noted three types of response depending on whether the change concerned the content of the product, the speed of development of new products or the size of the activity (see Figure 3).

Across our organisations, we noted three forms of product content change: (a) radical, (b) incremental and (c) no change at all:

1. Several organisations embarked on a radical change in their product content. Some of these changes were targeted specifically at addressing the crisis, for example, through making use of digital technologies to address new kinds of demand that arose as a result of the crisis (e.g. telemedicine, remote work). In other cases, these radical changes were independent of COVID-19 and seen by organisations as a part of their long-term development plan, for example, involving the development of new digital products to complement the organisation’s existing offering and better address existing customers’ needs.

2. The most common form of product changes were incremental in nature, and involved (1) developing new product features, often in response to crisis specific needs for online delivery (e.g. introducing contactless delivery, virtual tours, etc.) either targeting existing or new customers; and (2) going back to previous products that were abandoned to re-develop as a way of addressing crisis specific needs either in existing or new markets.

3. In several cases, we noted no changes in organisations’ existing product offerings. These organisations continued to focus on developing the existing portfolio of products and services and targeting the same market. In some of these cases, however, we noted a change in their selling approach, and on some occasions, changes in the way in which these products were serviced. In both cases, these changes involved leveraging digital technologies to enable the selling or servicing of existing products.

In some cases, we noted changes in the speed involved in product development. In several cases, in response to the crisis, the organisation chose to either:

• Slowdown Development: slow down product development, for example, by reducing the frequency of releases, due to the drop in demand;

• Accelerate Innovation: to speed up product development activity either in response to extra demand within the same target market (e.g. healthcare); or because of the need to quickly scale up the range of existing products to other areas (e.g. food delivery in response to a drop in demand from tourism, transportation sector). To support the rapid increase in product development, we noted that organisations often relied on engaging in collaborations with other competitors to get access either to technology or workforce or through applying for EU grants related to COVID-19 work to access financial resources.

We also noted that several organisations responded to the crisis by changing the size of the activity involved in their product development. We differentiate here between four types of responses:

1. No changes, where there was no foreseen change in activity due to firms’ reliance on medium-term contracts that were already in place to cover product development expenses for the medium term.

2. Expansion, generally due to the increased demand for information technology optimisation and automation solutions, which the firm was keen to exploit. In this scenario, firms embarked on finding new ways to commercialise products or to expand in other domains by leveraging these new digital solutions.

3. Slowdown, by only keeping the minimum online presence to maintain the product alive for existing customers, without too many costs.

4. Stop all product development activity, and use the time either to prepare other projects (e.g. considering shifting the product activity to other areas).

Across all three types of changes in the product offerings that we observed in our data, we noted that most firms expressed expectations that the crisis led to a change in customers’ preferences to pay more attention to the maturity of the technology embedded in the product, the product’s scalability and issues related to product/technology security. At the same time, there seems to have been a shift from a transactional approach to customer relationships towards a more relational approach, based on more long-term relationships, service-intensive and trust-based. Consequently, several firms began to pay more attention to marketing and sales as a critical way to support the development of these relationships. Especially for smaller-scale software developers, whose competencies lay primarily in functional product development, this shift in emphasis towards marketing and sales was critical, as they needed the time and resources to invest in developing adequate skills.

We have examined three aspects related to organisational response to COVID-19, their interpretations of the crisis and their responses in terms of changes in their processes and changes in their products and service offerings.

Concerning respondents’ interpretations of the crisis, we find that organisations exhibited different interpretations of crisis as a sustaining force, either temporarily or permanently or as a disruptive force that requires changes in existing processes and products, whether these changes are made cautiously or boldly. Aligned with existing research, we find that organisational responses vary depending on these interpretations (Powell and Baker, 2014). In contrast to existing research, which links this interpretation with founders’ identity (Powell and Baker, 2014; Zuzul and Tripsas, 2020), we find that it is the characteristics of the organisation and the specific context in which it operates that explain these differences.

Specifically, we observe that firms’ dependency on external resources influenced their interpretations of the crisis, shaping their subsequent responses (Celtekligil, 2020). For instance, the stability of financial resources, such as reliance on EU grants or customers locked in long-term contracts, made high-tech ventures more confident that the crisis would not affect them significantly and they were more likely to maintain their current strategies. Companies dependent on markets that were more volatile or had been significantly impacted by the crisis (e.g. selling online versus selling to airports) were much more likely to perceive the crisis as disruptive and thus pursue significant change in their activities in response to these disruptions. In both cases, resource dependency highlighted that by and large, firms’ priority was managing customer relations to respond to the perceived impacts of the crisis, rather than changing their product development activities.

We also consider the categories of changes that firms pursue in response to crises, which highlight the priorities organisations consider when faced with crises. First, we find that a significant shift was the leverage of digital technology to enable the transition to remote work. This shift led to significant changes in communication, customer relationships, hiring process and decision-making process as these processes were suddenly changed from offline to online, which accelerated the digital transformation of these firms. Our findings align with existing research, which emphasises the importance of communication protocols, encompassing both internal and external channels, rapid and informed decision-making in times of crisis (Crandall et al., 2023). We find that communication indeed emerged as one of the most significant challenges during the COVID-19 pandemic, underscoring the need to adapt processes, people and technologies to foster organisational resilience.

Second, the shift to remote work involved not only the move of internal processes to online, but also prompted significant changes in these processes to optimise internal processes through accelerated digital transformation. We noted a significant difference in the ease with which this transformation took place. While large companies already had well-established processes, smaller companies lacked a resilience plan, which allowed them the opportunity to experiment more with different approaches. Although at times this experimentation means that some processes did not work as well, this approach also allowed for more innovation in their approach at a greater speed. It is in these small companies that we noted the most innovative approaches, for instance, the shift to entirely new markets or significant changes in their decision-making or hiring processes.

Third, the degree of change involved in the digital transformation of existing processes was uneven, not only across organisations as they exhibited different crisis interpretations, but also within organisations across categories of processes. For instance, while in general digital transformation led to efficiency improvements, there was a range of processes where the transformation generated negative outcomes. For instance, respondents noted that activities requiring collaboration and practical execution (e.g. product development) became much more difficult to carry out as processes shifted online. Similarly, regarding changes in product content, most changes we noted to existing products were incremental or very minor. The key product changes we noted concerned product development processes (e.g. acceleration in development cycle) and business development (e.g. shift in market but with similar or minorly changed products), rather than radical changes in product content. This suggests that to understand how organisations respond to the crisis by pursuing digital transformation, we need to consider the specific context in which digital transformation is enacted in response to the crisis, including both the characteristics of the firms and the nature of the process involved.

Finally, considering the specific responses our firms enacted to address the impact that digital transformation involving the shift to remote working has on employee productivy, our findings align with existing research which finds that social support and confidence in employees’ ability to succeed and more broafly, measures aimed at improving work-life balance significantly contribute to increased employee satisfaction, motivation, productivity and increased engagement (Iancu et al., 2022; Straus et al., 2023). We have noted that employee-focused practices, such as integrating flexibility-promoting strategies, optimising connectivity, addressing communication challenges, organising face-to-face meetings tailored to the teams’ relationship history and holding social events, enhanced interpersonal connections and workplace performance, facilitating the digital transformation of the organisation.

This research examined the impact that the COVID-19 pandemic crisis has had on high-tech ventures in terms of changes in their business practices, operations and product/service offerings, which reflect the organisational efforts to respond to the crisis by embarking on digital transformation. We found that different organisations perceive the crisis in different ways, whether as a sustaining or disruptive force for change. Different interpretations lead to organisations pursuing different responses to the crisis, involving distinct efforts to change their existing processes and product and service offerings by leveraging digital technologies. We linked these different interpretations to the degree of market volatility that the organisations’ target and their financial stability. As expected, we noted the most significant process-related changes in leveraging digital technologies to shift to remote working and transform internal communication. These changes reflect the key areas where the organisations engaged in digital transformation in response to the COVID-19 pandemic. Here, we observed that our organisations were mostly concerned with the ease of change and the varying impact that this transformation has on employees’ productivity. We also noted the organisations embarked on digital transformation to respond to the crisis in other areas of activity, mostly related to customer interaction, hiring and decision-making. It is in these areas where the longer-term effects of the crisis are likely to have the maximum impact, beyond the mass movement to remote working.

In contrast, changes in product offerings were less prominent and where we noted them, they were mostly incremental. This suggests that digital transformation in the aftermath of the crisis was focused primarily on altering business processes, rather than their product offerings. Where we did note changes with respect to firms’ product offerings, they tended to consider the processes underpinning the product development activities, rather than the product content, thus reinforcing our finding that the firms focus their response efforts in the immediate aftermath of the crisis by transforming their processes rather than value offerings.

The study examines companies in the software sector only, which does not fully capture the broader spectrum of high-tech ventures. Compared with hardware companies, software companies have been less dramatically affected by the crisis, for instance, concerning their ability to continue running their operations remotely. Furthermore, the nature of the product means that there was a high level of digital skills among the workforce, which makes the transition to digital transformation easier compared with companies where the workforce is less digitally skilled. Furthermore, we have considered these changes at one point in time, shortly in the aftermath of the crisis. As such, we have covered only the beginning of the organisation’s effort to embark on digital transformation to respond to the crisis. However, crisis responses evolve. Consequently, an important avenue for further research would involve examining and understanding long-term impacts across diverse industries through a longitudinal and cross-sectional study.

The authors extend their special thanks to the tech entrepreneurs and representatives of high-tech organizations, whose valuable insights have significantly contributed to this research, supporting the advancement of knowledge and the enhancement of the learning process.