Responding to Disruption: Stormy weather ahead?

By Kerry Topp

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“If you do what you’ve always done, then you’ll get what you’ve always got.”

There’s a paradox here: why would companies that have been successful and created a winning formula need to do anything different? Why should they feel the need to transform or invest in new areas when they can maximise shareholder returns right now?

The reason: If boards and executives don’t have transformation and continuous improvement in their strategies, they are building vulnerability into their organisations.

To quote Ralf Dreischmeier, Global Leader of Technology Advantage Practice at Boston Consulting Group: “Executives need to create their own ‘digital attacker’ businesses. Long-dominant companies are increasingly under attack from a host of digital start-ups that are out to reinvent businesses and industries by addressing consumer needs in completely new ways.”

Dreischmeier states that incumbents should be more disruptive: “Large companies hold a lot of cards—including resources, assets, relationships, and data—that smaller competitors frequently do not have enough of. But they often do not fundamentally rethink their business model.”

This challenge is at the heart of why companies in New Zealand are slow to commit to activities which seek out new markets and opportunities, and help their people change and survive.

But why?

To quote another guru, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, recently said: “Making Industry 4.0 work requires major shifts in organisational practices and structures.”

These shifts, Schwab said, include new approaches to IT and data management, to regulatory and tax compliance, new organisational structures, and changes in company culture.

Professor Schwab has been at the epicentre of global affairs for over four decades and he’s convinced that we are at the beginning of a revolution that is fundamentally changing the way we will live, work and relate to one another.

He explored this concept in his book, The Fourth Industrial Revolution. He characterises this Revolution through a range of new technologies that are fusing the physical, digital and biological worlds. The impact of these technologies will affect all disciplines, economies and industries, and challenge ideas about what it means to be human.

“The world has the potential to connect billions more people to digital networks, dramatically improve the efficiency of organisations and even manage assets in ways that can help regenerate the natural environment, potentially undoing the damage of previous industrial revolutions.”

However, Schwab also expressed grave concerns that organisations might be unable to adapt and governments could fail to employ and regulate new technologies to capture their benefits. Also that shifting power could create new security concerns, and inequality could grow causing societies to fragment.

If we focus for a moment on the Financial Services sector as an example. There is no doubt the sector is going through a seismic shift. Changing customer demands, the growth of financial technology companies like Xero, the pressing need to be innovative and the changing relationship between Boards and executives are all reshaping the industry. At the same time, executives need to balance these demands against the expectations of analysts and the requirements of regulators.

This is certainly something coming through loud and clear from the 490 Financial Services CEOs who took part in a 2016 Global CEO Survey recently. The survey, entitled “Turning risk into opportunity – The changing face of Financial Services”, highlighted that CEOs were worried about speed of technological developments, with 81 percent of respondents either extremely or somewhat concerned about keeping up with the pace of change. The next biggest worry was that a limited talent pool could inhibit their growth, which 70 percent of respondents were concerned about.

So what’s the answer?

First, education – specifically, the education of Boards and executives. These incumbents need to be aware of the magnitude of the potential threat but also the opportunity that technology disruption will likely create for their business.

Tech Futures Lab is doing exactly this. As Sacha Judd, Managing Director of Hoku Group recently put it, “The Tech Futures Lab workshop … is critical information that should inform all our decision-making, as the exponential growth of new technologies challenges all of the assumptions that we’ve previously held about what the world will look like, and how our industries and society will adapt.”

Secondly, strong leadership at a time of uncertainty and change is incredibly important.

As Adobe Chief Executive Shantanu Narayen recently put it: “A great Board is one that spends disproportionate amounts of time with management, taking active steps to understand the opportunities and challenges facing the business,” he says. “With the world increasingly moving to digital and businesses implementing digital strategies, Boards also need to boost their digital capabilities to be better strategic advisers to the business.”

But it’s not just technology that Boards need to grapple with, it’s “entrepreneurial venturing” or, put another way, deferring returns today by investing in potential growth areas which can achieve returns in years to come. Boards and execs need to set the expectation that they will be more entrepreneurially-minded and less risk-averse when it comes to investing, and they’ll need to feel comfortable making some decisions based on instinct rather than hard numbers.

Why? Because this is a new world – some of the things that are happening now are unprecedented and you have to be in the game to stand a chance of winning.

New Zealand boards and executives are, on the whole, not especially diverse. They tend to be dominated by very smart accountants and lawyers because of the types of material things discussed – risk, finance, etc.  However, there is a real and present danger of “group-think” with that make up. Companies should consider the addition of a disruptor – an experienced entrepreneurial and tech-savvy protagonist – to their team.

Because as Ralf Dreischmeier said: “Leaders in the digital age are different from leaders in the past. They prototype an agile strategy and learn from their experiences. They attack their own businesses before disrupters do. At the same time, they digitise their core business and get the most value from both their existing and external data, all the while mastering the digital ecosystems they operate in.”

Is this how current Board members and executives have been thinking? In my experience, this is only happening in a handful of local organisations.

Now is the time for vision, strategy, an entrepreneurial streak, strong communication, expectation setting and above all, strong leadership.

Disrupt or be disrupted is the motto of today – but I would add that company leadership needs to enable their people to be safe to “venture smart and venture more”.

Good luck on your venturing – our future economy needs you.

Digital transformation requires people with an appetite for disruption

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By Brett Roberts

Digital transformation involves using digital technologies – such as the web, cloud, mobile, social media, the Internet of Things and analytics-driven personalisation – to re-shape and improve customer interactions, business models and financial returns. An important focus area is the provision and ongoing enhancement of customer experiences that are multi-channel, data-driven and digitally-enabled.

Ideally, such changes allow organisations to embrace and exploit the exponential rate of technological change for the benefit of themselves and their customers. This often entails a shift in organisational ‘rhythm’ away from a steady, sustained marathon-like jog towards something that more closely resembles orienteering.

The agents of digital change

In a sense, the Datacom Digital, Customers and Collaboration team is at the sharp end of digital transformation. Put simply, we exist to enable digital business: everything from web design and build, mobile innovation and app development to implementing data analytics, business intelligence, Customer Relationship Management and collaboration technologies, such as Microsoft SharePoint.

As you would expect, we help customers with technology design, build, deployment and management, and deliver related big picture strategic advice and consultancy. We understand the critical roles these play, but a major part of what we do is help organisations to operationalise digital innovation – i.e. make transformation ‘stick’.

Time and time again, we’ve found that the single most important factor for long-term success is the people within the organisation. They operationalise the new technologies and processes; the enhanced customer experience. They need to adopt, embody and express the new mindset that accepts and embraces the new world of constant, or at least hastened, change.

This means that, wherever you start on your digital transformation, you should focus on your people first and foremost. A new Datacom white paper, available free for download here, examines the implications of this and provides guidance on how to do it. It focuses on four people-related areas: recruitment, leadership, change management and culture. Below is an excerpt from the paper, on recruitment.

An appetite for disruption

Hiring the best candidates is a perpetual challenge, full of risk and opportunity. If you take the best, then your competition is left with the rest – and vice versa. But in the new digital world, the best people may not be who you are looking for or who you already have on board.

Lean Startup author, Eric Ries, said: “The modern rule of competition is whoever learns fastest, wins.” In other words, you need to recruit smart people who you can teach to do anything, and who can thrive amid disruption. You need people with varied, hybrid abilities. You might think this means hiring a cohort of digitally-minded Millennials, but digital skills can be taught. What you are after is rarer: attitude on top of aptitude – which can exist in people of all ages.

For example, my team regularly interviews candidates for senior developer roles. We look for technical proficiency, of course, but favour people with the ability to have an engaging conversation with a customer about their business issues over those who are more technically skilled but unable to talk outside their domain.

In general, we look for a broader mix of skills within the ideal candidate, and a growth mindset. This means they are mentally flexible, a fast learner, comfortable with uncertainty, accepting of the need to take risks and experiment – and fail sometimes – in order to succeed and grow. They are able to stand up for themselves, but recognise, and run with, better ideas. They collaborate and communicate well, and have empathy for their customers, colleagues, partners and suppliers.

They can sit in a room with a customer and others for a week and work with them to design, build and test a prototype application that the customer takes to their Board and gets approval to fully implement. In our accelerating, digital business world, this kind of rapid ideation and prototyping activity is becoming commonplace, even core business for many organisations – and applicable to all manner of product or service innovation – making the diverse attributes described above more mission-critical every day. It’s how my team and others at Datacom work, on many projects.

Shifting demands

There is an interesting macro trend at play here – a contradiction: the more digital businesses become, the less they need people with traditional IT skills. As the example above shows, there are plenty of roles for highly technical people in specialist firms like Datacom. But as business (and consumer) technology becomes easier to use, more automated, provided as-a-Service, and so on, the need for deep technical knowledge and skills within other types of businesses recedes. If these skills and services are required, then organisations can call on the specialists.

Conversely, the need for people who can leverage new digital technology to learn faster, work more productively, be more creative, and come up with new innovations and solutions and run with them, is exploding. And if you bring in people with an expansive, flexible attitude and these skills, then you will help your organisation to foster a digital mindset and culture.

For more guidance on, or help with, making digital transformation succeed, please contact us on digital@datacom.co.nz.

Brett Roberts is Associate Director for Digital, Customers and Collaboration at Datacom. 

Don’t plan to build a Content Management System – plan to build a website

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By Trudy Evans

When a CMS is delivered the job is only half done. For a web site to be successful, you’ve got to have high quality, responsive content to put into the new CMS structure.

Imagine building a supermarket but not stocking the shelves. The builders would be celebrating that they’ve built the supermarket on time and on budget but the store manager’s saying, ‘When’s the stock arriving? Where are my staff?’ Without stock and staff people won’t find what they want, have a good experience or return for more.

And it gets worse. The builders say stock and staff is ‘out of scope’ for this project and have a section in the Statement of Work to prove it. The project team says: ‘But you build supermarkets all the time. Why didn’t you tell us its best practice to also stock the shelves and hire staff? You’ve let us down. You’d better provide some people to help us sort this out or we’ll never get you to build another supermarket for us again.’

The night before the supermarket opens the project team, the builders, a bunch of grads and random family members are furiously chucking stuff into shelves. The supermarket opens on time but is a total mess. Over the next few weeks there is a mad scramble to get things under control – there is a massive amount of stress, heaps of overtime and a couple of resignations. In the meantime the customers have had such a rubbish experience they’ve gone to the supermarket down the road.

In the real world this wouldn’t happen. Teams who run supermarkets know they need to be stocked. They know what people want, who their potential customers are, and how they buy. Supermarket stock is treated as an asset – it’s why people go to the supermarket and how it makes money.

Having high-quality digital content on your website is like having the right stock in the right aisles. It’s the reason why people visit to your website. Your content will make or break site traffic, engagement and conversion to sales. But all too often content is not treated as an asset and included in the CMS plan.

The analogy of people chucking random stock into shelves at the last minute is an unfortunate reality on many CMS projects. A lack of content planning means website launches are often delayed, damaging customer experiences are made live, business objectives aren’t realised, vendors, customers and visitors are unhappy. Time and money is wasted and it takes a long time to make up the lost ground.

So why is this happening when everyone knows ‘content is king’? Unfortunately it’s not the same as ‘treating content as king’. Content is hard work and the way forward isn’t always clear. Unlike the supermarket stock analogy, content strategy on CMS projects isn’t well known or supported in the digital industry.

You need a content migration strategy – which simply comes down to understanding what’s involved and creating a plan. The approach to intranet migrations is similar. Here are the main steps.

Step one: The audit.

Quantitative audit:

  • The current platforms/sites/tools/sites migrating to the new platform
  • Count of all the content/pages, list page names and URLS
  • Identify content types (including a count)
  • Automated and manual audit
  • Set up a master content migration spreadsheet

Qualitative audit:

  • Identify content owners and stakeholders (RASCI)
  • Define content evaluation criteria i.e. age, relevance, legal requirement, quality, and accuracy
  • Decide which content will be left, kept, or merged
  • Define the state of the content, effort to update, priorities and migration order
  • Identify the visual assets and PDF documents
  • Analyse site statistics and define review sign-off process.

Step Two: Content creation

  • Map the current content from the audit phase to the new information architecture
  • Review the new design and evaluate the impact on content
  • Define how long new content will take to create
  • Estimate the resource requirements and key dates/milestones and identify risks
  • Establish tools, templates, editorial guidelines, and other documents
  • Define Sign-off processes and management

Step Three: Content loading, building and launching your new website

  • Define Taxonomies/naming conventions for content
  • Understand your new CMS and get training if required
  • Define workflow, equipment, project area/ room, tools, resources needed
  • Define sign-off management
  • Set up and manage redirects and SEO tasks
  • Establish archiving of old content
  • Transition to BAU – change management and user adoption.

At Datacom we typically run information architecture as a separate task and then merge with the content audit findings to ensure we have captured everything in the new IA and identified any content gaps. We also kick content off at the same time as design and development. This way what we learn from the audit process can be fed into the design process.

Design and content must run hand in hand. To make a real impact on your customers and get them to buy, content must be treated as king.

Trudy Evans is a User Experience Analyst for Datacom Auckland.

Our blog is an open platform for leading thinkers right across our business. The views and opinions expressed are those of the author(s) are their own and do not always imply endorsement by the Datacom Group.