Historic barriers to market entry are evaporating, changing the competitive landscape in a profound way. Reduced overheads, quicker set-up of operations and rapid deployment of products and services (across multiple geographies) mean that smaller-scale start-ups are challenging larger, established businesses in a way we’ve never seen before.
Adapting to digital transformation
Enabling much of this change is ‘digital’ transformation and the ways in which digital skills are changing how consumers buy services and products, how people work, and how business is done. By digital skills, I don’t just mean hard, technical skills like coding or application development but the softer skills to behave more digitally as well. For employees, I mean the ability to use the technology of their choosing to find, access, analyse, use and share information and data, to change and improve ways of working.
Contrary to recent media hype, these skills aren’t just applicable to younger, tech-savvy generations. Recent research from VMware, a global leader in cloud infrastructure and business mobility, surveying 5,700 employees across Europe, Middle East and Africa, found that digital skills are considered a priority for all employees of all ages. Almost three quarters (71%), for example, think the widespread use of digital skills can improve their business’ competitive edge, while two thirds (66%) think it will increase revenue/profitability for the business over the next five years. Importantly, the hunger for embracing these skills transcends age demographics as well: 64% of all employees are willing to use their own time to learn new digital skills and ways of working while, to take one example, 39% of 45-54 year olds are seeking advice or training on designing and building mobile applications.
What are the challenges?
This raises challenging questions for business leaders who, within this changing, digital world, should be asking themselves;
• What rules still apply to running a business?
• What aspects of the way we do things, and even of the type of business we are, do I need to rethink?
• How do I bring this new way of doing things alive and make it relevant within my firm?
What are the complications for business leaders?
Several factors are further complicating matters for businesses and their leaders. The first is the extent to which new ways of working, enabled by the latest technological innovation, are destabilising the dynamic between senior teams and their organisations. Where will knowledge come from in this changing environment? Senior staff are no longer (necessarily) those in the ‘know’, and by this I mean having both a deep awareness of the environment that the business operates in and a knowledge of the business as a culture and system. The environment that organisations are working in is no longer stable, certainly less predictable and faster changing. Successful strategies could just as likely emerge from the edges of an organisation, rather than from the top. Many organisations are working through how strategies can be evolved through trial and error, closer to their customers, with quick learning cycles.
We have seen some organisations struggle with this through a clash of expectations between ‘old’ and ‘new’ staff. In some technology firms, the newer staff challenge their managers who developed the now outdated technology. With more generations in today’s workforce than ever before, organisations will need to establish ways of working where senior teams with years of experience are closely aligned with younger talent who have new expertise, expectations and ideas. And there’s further disruption to the way decisions are made in organisations, begging the question: what are the criteria for decisions now? The conventional framework for decision making has been Return on Investment, however, we’re now talking about new ways of working, unchartered territories, which may not come with the data to extrapolate a conventional ROI figure. So business leaders also need to consider how they measure accountability, performance and outcome in a meaningful way, within this changing ecosystem. It’s about measuring inputs more effectively, and balancing this with the traditional concern for outputs.
What are the main changes that will happen?
It’s a lot for businesses to take on. Three points from me that should help organisations adapt to the impact of digitisation and digital skills are:
1. Strategies should start with the understanding of customers through data and experience. Select customers to trial innovative activity with and agree a measurement framework based on the (possibly new forms of) data that can be generated from the activity. Speed of learning and adaptation will be key, as activities are continually tweaked based on what works and what does not.
2. Remember, you cannot have a technology strategy without a people strategy. An immediate ‘lightning rod’ for these types of issues are the skills and workforce you need. Look at both formal and informal training methods to give employees the skills and equip them to work in the way that digitisation affords them. Specifically, gamification can help translate these training strategies into well implemented practices, using the addictive powers of games to motivate employees to develop new skills and behaviours.
3. There’s a very real need for empathy and people care within this ‘always on’ world, as businesses face pressure to maximise employee productivity while managing work/life boundaries that are quickly eroding. It’s also tough for top teams: there’s potential in young people that are foreign to them – in terms of challenging how business is done and how they should be managed and developed – that they’ll need to adjust to.
We’ve recently seen numerous major brands suffer from their failure to adapt quickly enough and move towards a more ‘digital’ business. The pressure to translate technology innovation and new ways of working into the business in order to remain competitive is very real. We should take comfort in the fact that we’re all in this together – the digital age is flattening the traditional hierarchy of businesses and uniting different age demographics. Success will come down to willingness to learn, the speed in which we can adapt and the framework that’s put in place to measure change. Get these elements right and you’re one step closer to realising the digital opportunity.