By Laurence Buchanan, EY EMEIA Advisory Digital Leader – as first published on betterworkingworld.ey.com
We might think we’re living in an era of rapid transformation, but in reality we’ve only had a taste of the explosive changes that advances in multiple fields have yet to bring.
There is so much more to come in disciplines such as 3D printing, genomics, nanotechnology and advanced robotics. In addition, the combination of new technologies with the connectivity of everything will have wide-ranging implications for humankind. It will allow us to do everything from optimizing supply chains to increasing our chances of living longer, healthier lives through the ability to monitor and predict our health conditions.
Today the speed of change is so fast that it’s beyond the control of any company, even the most celebrated tech giants. Fortunately, however, entrepreneurial businesses stand a better chance of keeping up than most because they have agility on their side and are unencumbered by legacy systems or assets. Many of the Fortune 500 companies were never designed to cope with the pace of life today and so they are burdened with convoluted processes, impenetrable silos and rigid organizational structures. On the other hand, the simpler business models and flatter structures of entrepreneurial companies allow them to respond more nimbly to opportunities.
Yet agility alone will not guarantee success for today’s entrepreneurs. They also need to understand how they can harness the transformative power of technology – whether they see themselves as ‘tech’ companies or not. The best way of doing this is to learn some important lessons from the digital leaders.
So, what are these lessons that entrepreneurs should take to heart?
1. Above all else, start with a clearly defined purpose and stay true to that purpose
The greatest digital leaders know what their company stands for and what it is trying to achieve. Rather than jumping to digital tactics and technology fads, everything they do then relates back to this purpose. For example, the low-cost airline EasyJet experiments with a broad range of technologies from 3D printing engine parts to inspecting planes with drones, but everything they do relates back to delivering low-cost, safe air travel.
2. Turn your vision into experiences that deliver great outcomes
Don’t just listen to what customers say they want and need. Use your insight to find out what their issues are. Then create new products, services and experiences that the customer didn’t even realize they needed. In a quest to better serve customers, a global pharma company switched its mindset from selling pills to improving health outcomes. That change led it to partner with a technology company to combine its medicines for asthma with a connected inhaler that helps patients measure exactly how much medication they had taken.
3. Embrace agile innovation
Entrepreneurial companies that learn this lesson will have an advantage in the market. Don’t be afraid to bring together expertise from different sources and develop products quickly. Remember that failures and tangential developments are important parts of the innovation process so celebrate them for that, learn and quickly move on to the next cycle.
An interesting example I can think of is how Visa Europe CoLab works to a rhythm of 100-day sprint cycles. Every 100 days they take a new challenge from the business, connect with hundreds of start-ups to crowd-source the latest thinking and ideas and then rapidly build out and market-test new concepts and ideas. By doing so, they are able to constantly provide new services to their members, consumers and retailers.
4. If you want to build a strong business, don’t focus just on digitizing today’s business
Think continuously on how new technologies will impact upon your business model in the future. For instance, rather than continuing to digitize and automate their manufacturing and logistics processes, a pharma company recently received regulatory approval to 3D print their drugs, opening up a new world of customized medication.
5. Harness the power of communities
Tap into both consumer communities and tech ‘ecosystems’ – for example, the tech start-up networks in Silicon Valley, East London, Eindhoven and Nairobi – where a business can assemble a wealth of innovation and technology from multiple, fast-moving sources.
We now run start-up challenges in several tech clusters around the world, connecting the biggest challenges of our large clients with the creativity of start-up communities in Silicon Roundabout, Tel Aviv, Amsterdam, Berlin and others.
6. Love and hate your legacy
In a world where a new technology can hit 50 million users in under 30 days, the reality is that every organization builds up technical debt. Left unchecked, that can create a huge barrier to agility. However, the line between an asset and a liability can be thin. Physical stores can keep operating costs high, but they can also be a valuable asset for engaging with consumers and offering greater logistics options.
A leading Russian retailer was concerned by online-only retailers competing on price. Instead of following the price war, they turned their supply chain and physical stores into a competitive advantage, allowing consumers to browse in shops, order online, pay in cash on arrival and service in store.
7. Plan for a diverse workforce
In the future, diversity won’t just mean men or women, or people from different ethnic backgrounds. It will mean having a workforce that may be comprised of locally based employees, a network of freelancers working globally 24/7 and a digital workforce of physical and software robots carrying out some of the toughest tasks. Diversity also means diversity of skill-sets. Success in digital today demands a constant clashing together of skills from creatives and technologists to lawyers and cyber specialists.
For example, fines for companies getting topics like data privacy wrong can now reach four percent of global group turnover in some regions. In order to get to market more quickly, a consumer products company recently decided to make certain their lawyers were “at the design table,” working through potential legal barriers early, rather than blocking new concepts just before launch.
8. Recognize the value of data
If you use your data well, it will give you invaluable insight into the customer experience that you are delivering and help to refine your administrative processes, your operations and your supply chain. It may even prompt you to overhaul your business model. GE Digital has transformed into a multi-billion software company, building a data platform for the industrial internet which offers their clients insights into the real-time performance of their jet engines, wind turbines, medical equipment and more. In fact, EY and GE Digital recently announced a strategic alliance to develop and provide Industrial Internet of Things (IIoT) services.
EY Legal Services Contacts:
Roselyn Sands – Global Labor and Employment Law Leader
Peter Katko – Global Digital Law Leader