Digital Ecosystems, Tzars, Puzzle Pieces, & The Halo Effect

This week I have had numerous informal discussions with different business leaders about the digital potential of Guernsey in the context of a COVID world. It got me thinking.

What are the key ingredients of an efficient digital and innovation ecosystem? What are the key pillars? If I was Digital Tzar for a day, what would I focus on?

I immediately thought back to my own entrepreneurial journey starting in 2011 in Shoreditch (London) when I left Accenture Consulting & co-founded The Social Experiences Club, one of the first European experiences and activities marketplaces. Along the way and following an exit I have advised, mentored, coached and consulted to many other entrepreneurs, VCs and corporates on everything from new venture development to business models to fundraising to hiring and firing.

Below I have provided a list of some key ‘ingredients’ to an efficient innovation and digital ecosystem. They are like pieces of a puzzle. There can’t be one without the other. Whilst there are wider factors required for success (e.g. smart, collaborative and decisive government), these are not the focus here.

Key Ingredients Of An Efficient Digital and Innovation Ecosystem:

  • Innovation-I think the focus on ‘digital’ is too narrow. Perhaps the better conversation is around how to foster new ways of thinking, working and investing (in technologies, skills, institutions etc), and how to provide the right infrastructure for anyone or any organisation to be able to build new solutions and deliver benefit, value and prosperity for consumers/citizens.
  • Commitment + Vision As with anything in business or life, a strong vision and commitment to that vision is required to create impact and make change happen. For the public-sector, having a strong technology and innovation policy is critical, and was the foundation of Estonia’s e-Government transformation  Even with such intent and will execution will be hard enough, but without this and appropriate support, resources and political capital, nothing will change.
  • IT InfrastructureThe pandemic has shown how strategic this asset class is to the future prosperity of nations – and will continue to be – which may require regulators to rethink approaches to regulation and competition. Without reliable and quality connectivity and access for all people at a fair price today or in the near future (e.g. 5G, fibre etc), economic and social growth could suffer and could lead to catastrophic long-term consequences. On regulation, balancing the strategic interests of nations and the telecom providers (who all have very different corporate strategies, business models and operating structures) is no doubt a difficult but critical balancing act, especially in light of COVID’s acceleration of digital services, access and inequality issues, and continued and future investments in next generation infrastructure (e.g. 5G). 
  • Centralised Governance A centralised market-focused unit as the knowledge and resource ‘hub’ responsible for digital activity can provide benefits for an emerging innovation ecosystem, especially where aspects of the infrastructure might be lacking. London had TechCity, although it was arguably overshadowed by the power of the entrenched historic networks of the wider ecosystem in terms of universities, commerce, government, and investment community. 
  • IncentivesSmart technology and innovation tax policies is critical to facilitate a more efficient and attractive market to build the wider entrepreneurship and corporate innovation ecosystem.

Support for business R&D can help to foster innovation and boost productivity. Investment in new technologies can also be supported through more generous depreciation deductions or immediate expensing – OECD Report (2018) – Tax Policies for Inclusive Growth in a Changing World

Incentives (whether EIS, SEIS, tax-breaks or otherwise) can encourage and unlock local (and overseas) private and corporate capital flows into start-ups/scale-ups. In 2011 when I was raising funds for a start-up in London in 2011, everywhere we went investors, accountants and lawyers would immediately ask the same question: are you EIS compliant? Clearly the years following the 2009/09 Financial Crisis was a massive boon for innovation with a huge supply of entrepreneurs choosing new paths and supported by an abundance of capital. 

Since its inception in 1993 the Enterprise Investment Scheme (EIS) has enabled UK companies to raise over £16 billion in investments. Of the 3,470 companies benefitting from the EIS Scheme in 2015/16 alone, 1,645 companies were raising funds for the first time, between them generating £997 million of investment – Thomas Jenner LLP 

On the supply-side, facilitating a more efficient is needed to generate an increasing supply of entrepreneurs able to access capital (plus ‘smart’ capital) especially at early stages. For companies, encouraging the development of in-house IP via R&D tax credits (or similar) (UK HMRC policy is here) could also have downstream benefits such as up skilling (depending on the policy), and can be aligned with any national Digital Vision.

  • e-Government For smaller nations, it is especially critical to invest in citizen-facing automation (e.g. paper-less) and improved customer experience opportunities across social security, ID, e-voting, e-health, data, e-signatures, and EdTech. Often government is the largest employer in smaller communities hence these investments can have outsized impacts and benefits. It also ‘opens’ the government up to being more accessible, transparent, and helpful in working with and facilitating the wider ecosystem.
  • Ecosystem – One of the key reasons why London has been able to become a global leader in innovation (especially FinTech) has been due to the infrastructure and network effects facilitated by a number of key factors. In particular, within a 1hour train ride you have leading universities (e.g. Oxbridge, LSE, UCL, Imperial etc), commerce, and government. It creates enormous opportunities for creativity and collaboration to flourish, share knowledge, and build relationships with every piece of the start-up puzzle, from enterprise clients, to talent, to regulators and so on. As a start-up co-founder in Shoreditch in 2011, you could easily do nothing but network and attend amazing events, meet ups, hackathons, talks, pitch competitions etc  every night. Whilst not every city or small community can replicate that, the principles and practices are there to be examined and implemented within whatever your specific context is.

“We are witnessing a rapid changing of the guard for global investment in innovation centers. The US and Europe have traditionally been viewed as dominant forces in innovation and technology but Asia could soon surpass the US for number of innovation centers built and operated. Moreover it is clear that funding alone is not enough — the success or failure of any innovation center hinges on how effectively it taps into the surrounding ecosystem, and the role it plays in driving a broader corporate innovation strategy – Eric Turkington, Director at Fahrenheit 212, part of the Capgemini Group

  • Talent/Skills – Education is critical for the future of innovation in a society. At K-12, schools need to be offering introductory (and advanced) knowledge-based and/or practical courses on digital topics whether entrepreneurship, digital marketing, Excel/Google Spreadsheets, coding, design thinking, or analytics. This creates opportunities for ‘start-up clubs’ and business idea/pitch competitions aligned with industry, which can provide pathways for hiring and investors. Businesses should also prioritise up skilling which includes investing in softer skills (e.g. communication, creativity, collaboration, empathy).

“Twenty years from now, if you are a coder, you might be out of a job,” Cuban predicted. “Because it’s just math and so, whatever we’re defining the A.I. to do, someone’s got to know the topic. If you’re doing an A.I. to emulate Shakespeare, somebody better know Shakespeare”. – Mark Cuban

In addition, it is critical to learn new ways of working and thinking (e.g. agile, lean, design), and how to significantly improve inclusivity and diversity initiatives for existing talent (and future hires). At the higher education level, it is no surprise that some of the best known ecosystems (from Hollywood to Silicon Valley) have top-tier universities in close proximity. A centralised knowledge, teaching and research centre for technology and related skills and excellence must be a high-priority for any region without this. Also, making it easier or more flexible to hire overseas talent and plug skill-gaps in high-priority areas – whether software, analytics, UX or engineering – should also be considered, especially as this removes the friction for individuals or companies to pursue innovation.

  • Specialism It certainly helps to be known and famous for a certain speciality. London has done well to intentionally (or accidentally) carve out a ‘brand’ around FinTech which leverages the reputation, expertise and talent in that sector, although it is still active in many other sectors. This helps with the halo effect to build an ecosystem around that which then flows out into other areas. 
  • ExamplesThe halo effect above also extends to when there has been one or more successful start-ups and entrepreneurs who have moved though the start-up stages i.e. idea to exit. In a similar way that we celebrate sports stars and use them as aspirational icons for children and others, this can be used to inspire the next generation of entrepreneurs. If the right examples exist, we need to profile them and start holding them up examples of what can be possible (and using them as mentors).
  • Intellectual Property – Historically patents have been used a measure of R&D and innovation – and hence subject to tax breaks – but since 2000s software development has become a critical focus. Incentivising corporate investment into building out in-house IP vs using an overseas agency/service provider may provide local benefits and stimulate the local digital skills ecosystem.
  • Pathways Programmes for potential entrepreneurs whether at school or higher-education or post-university to educate prospective entrepreneurs. To be effective it requires all of these initiatives to be in place or in-flight
  • Collaboration – A critical digital ‘soft-skill’, without a collaborative approach and mindset amongst key participants – coupled with the strongest of commitments from smart government – attempts to develop and execute on a digital vision will struggle. This needs to be baked into any refreshed governance supported by strong top-down commitment.
  • Experimentation – Modern start-up development relies on many small experiments: start with a small hypothesis, test, learn, iterate, build, repeat. Government therefore needs to be more comfortable with this way of working to ensure progress is made versus spending years analysing and/or smothering creativity with bureaucratic processes which ultimately delivers nothing or very little. In the midst of an ongoing pandemic, unprecedented government spending, and a reduction in tax revenues, the Government must work differently and smarter in order to be more accountable to taxpayers and deliver benefit, value and sustainable progress for citizens.

 

 

BigTech Power, Regulation, And The Early Days Of The Internet

I recently came across a Guardian article looking at the winners and losers from last month’s US Congressional hearings into the power, practices and conduct of various ‘Big Tech’ companies. It got me thinking.

BigTech’s power and urgent need for regulation reminds me of a hot topic back in the early days of the Internet being….the urgent need for regulation.

In Australia during the early 2000s, the approach of business and government to the emerging Internet and associated applications tended to be driven by fear and uncertainty (“let’s sue them, shut them down, and take control of the IP” – major records labels in the music industry) as traditional legal and regulatory frameworks struggled to adapt to the new paradigm and business models began to creak.

Between 2000-2004, I was entrenched in these issues as I wrote and delivered a brand new undergraduate and post-graduate course at Queensland University of Technology called ‘e-Commerce law’.

At the same time, I was in private practice advising Australia’s biggest casino, media and other operators on how to navigate the emerging world of online gaming and meet the increasing demand of Australian consumers (who love to gamble).

Most topics in the course and in practice grappled with the issue of how do the traditional legal frameworks apply to this new technology and applications, from payments and money, copyright (e.g. music file-sharing), privacy (e.g. data protection), and reputation (e.g. defamation).

In 2004, I analysed the Governments prohibition of online casinos in my first academic article published in QUT’s law journal, titled The Prohibition of Online Casinos in Australia: Is It Working?’.

I’ve pasted the introduction here as in the context of the BigTech Congressional Hearings, a few points are still interesting:

Preliminary online research of consumer gaming activity was utilised to develop an assumption that [after 2 years of prohibition] prohibition is not working. A key reason for this is the futility of prohibition given the unique nature of Internet technology. This article will also critique Government motives for prohibition, as arguably, the best approach to deal with interactive gaming was not implemented. The relevant question for public policy appears to be not whether online gambling can be controlled, but the extent to which it can be controlled.

Obviously, 16 years on you can apply this principle to the other areas which BigTech have completely dominated including social media, search, video, browsing, advertising, e-commerce, web services, app stores, personal data, and so on. In the early 2000s, it was a nascent and emerging industry and overall regulation policy needed to be ‘light-touch’ (although exceptions existed especially where consumer harm risk was high, such as gambling, payments).

As converging technologies penetrated (Internet, broadband, OS software, mobile, apps, cloud etc), limited regulation has allowed a handful of companies control the majority of our online data, purchases, browsing habits etc. This will only accelerate given the impact of COVID on our behaviour, and soon that will extend in the last frontier of growth for such firms including health, education, government services, and so on.

Whilst regulation (and disposals or break-up) is clearly required for many different reasons (competition, national security, business and consumer harm etc), it is unclear what will play out given the power of these firms, how politicised the issues have become, and the nature of US anti-trust enforcement and law which historically focused on pricing practices and consumer harm.

In Chairman Cicilline’s wrap-up:

This hearing has made one fact clear to me. These companies as they exist today have monopoly power. Some need to be broken up. All need to be properly regulated and held accountable … their control of the marketplace allows them to do whatever it takes to crush independent business and expand their own power. This must end.

Something needs to be done. But we will have to see what happens after the Nov elections.

What. Is. Going. On. With. Organisations. Right Now?!

Today I gave a short presentation titled ‘What. Is. Going. On. With. Organisations. Right Now?!’ which focused on how organisations are responding to COVID, what are the big opportunities, and how to navigate the future in terms of what areas and skills to focus on developing.

The event was the The Guernsey Chamber of Commerce lunch at The Old Government House (St Peter Port) with the theme focused on the ‘skills crisis’ and the upcoming launch of the new Guernsey Institute.

Check out the slides below:

Andrew Essa Talk OGH Chamber 24th Aug 2020

 

4 Major Post-COVID Megatrends

This week I came across a great report and visual from market intelligence firm Luxinnovation. It focused in on the major megatrends that will impact the economic recovery: digitalisation, sustainability, resilience and new business strategies (see below):

The study “Post COVID-19 Market Trends” is based on information from three sources:

  • National recovery strategies that have already been published by European countries, as well as the European Commission’s recovery plan and position papers issued by international organisations such as the OECD and the World Economic Forum
  • Technology and innovation market studies taking into account the impact of the COVID-19 crisis
  • Articles published by specialised press on topics related to current market trends in the post COVID-19 period

As the report aligns with recent research I conducted into strategic responses of a range of organisations across the world (REIGNITE! 2020 Report), I’ve summarised the key points below as highlighted by Sara Bouchon, Head of Market Intelligence at Luxinnovation.

On digital:

  • Even though the crisis brought some parts of the economy to a near standstill during the lockdown, it has strongly accelerated some trends, such as digitalisation
  • A large proportion of the workforce had to switch to remote working with almost no advance notice, for example, and many shops had to very rapidly start selling their products online
  • Digitalisation also turned out to be a success factor for some industrial companies with a high level of automation, which allowed them to continue producing even when the staff could not be present on site. This will speed up the development of the factories of the future that are based on Industry 4.0 principles

On resilience:

  • The huge impact of the current health crisis has raised people’s awareness of the potential consequences of a future climate-related crisis.
  • Many governments have recognised the need for a sustainable recovery and the opportunity to “build back better”, to use the words of the OECD
  • Recovery plans will include dimensions such as achieving the transition to renewable energy, shifting to a circular economy and rethinking food value chains to make them more local and environmentally friendly. There is also a will to invest in sustainable infrastructure
  • The ability to absorb and adapt to external shocks is vital, for countries as well as for companies and individuals. This crisis has highlighted vulnerabilities in the way our society functions of which we were not aware. It is essential that we work on lessons learnt and define what we can do to become more resilient.
  • A main focus in obviously on the healthcare system that is some places has been pushed to the very limits of its capacities. Other key issues include the building of regional supply chains, the development of new skills that help the labour force be flexible and agile, and ways to stimulate an inclusive democracy

On business strategies:

  • While businesses are now dealing with the severe short-term impacts of the crisis, many of them will have to reconsider their strategies in the post-crisis period, taking into account the “new normal” situation.
  • Some companies that adapted their production in order to respond to the urgent needs for disinfectants, face masks and visors, for example, are considering whether to stay in those markets or not.
  • Others, who changed their business model to offer online shopping or home deliveries, ask themselves the same questions
  • COVID-19 has been a strong driver of new forms of business innovation
  • New partnerships have been formed that would not have happened otherwise, and we can see much more of open innovation. This, in turn, challenges the current regulations of intellectual property as many innovations stem from cooperations involving several organisations
  • The health crisis has created new consumption and working habits, new needs to ensure that sanitary measures are being respected in offices, shops and other public areas, and new demands for entertainment in a context where large gatherings and face-to-face contacts are difficult. These are some of the areas in which we expect to see a lot of innovation in the near future.”

If you are interested in more context on the future implications of COVID, check out my recent report called REIGNITE! 2020 Report

Building Resilient Growth

The creators of Blue Ocean Strategy recently a wrote Harvard Business Review article called “How to Achieve Resilient Growth Throughout the Business Cycle

In it they address this fundamental question: How do you build growth and resilience, irrespective of the stage of the business cycle?

Below I summarise some of the key insight from the article:

Strategize like a market-creator

The authors Chan Kim and Renee Mauborgne argue that based on their 30 years of research, they have identified two types of strategy:

1.     Market-competing strategy, which focuses on beating rivals in existing markets, and

2.     Market-creating strategy, which focuses on generating new markets.

While both types of strategy have their role to play, companies pursuing market-creating strategies are not only better positioned to unlock a growth edge when economic conditions are favorable. They are also able to generate resilient growth during unfavorable economic conditions.

Red ocean and blue ocean strategies are not a binary choice. You need both. But while you’re already focusing on market-competing strategies, ask yourself how much of your focus is going to market-creating moves that generate the resilient growth.

red-ocean-vs-blue-ocean-strategy

How to build resilient growth

There are four actions companies take to best manage growth through market cycles:

1.     Focus on building a healthy, balanced portfolio of market-competing and market-creating strategic moves.

Both are important. While market-competing moves generate today’s cash, market-creating moves ensure tomorrow’s growth.

2.     Don’t wait for growth to slow to make market-creation a strategic priority.

Prepare in advance. You’ll be buffered by your market-creating move in a downturn cycle only when your market-creating move is already launched or set to launch. Don’t wait. Act now.

3.     Ensure your market-creating efforts are a core component of your strategy.

It shouldn’t be siloed into a function, effectively a side show. If you want to achieve market-creation you need to make it a priority.

4.     Remember, technology itself doesn’t create markets.

What creates new markets is the use of technology and whether it provides a leap in value to the buyer. Ask yourself: Is it linked to value innovation or not?

In a nutshell, the principles focus on both (i) leaders being aware and fully committing to exploring opportunities beyond the short-term and (ii) organisations being organised – or ‘building the muscles’ – through culture, systems, processes and talent to embed the focus on exploring and exploiting market-creating growth opportunities.

The late Professor Clayton Christensen and co-authors applied these theories to the prosperity and income inequality challenges the world faces and continues to face today with the book The Prosperity Paradox

This book and Blue Ocean Strategy is a must-read for anyone wanting to learn more about market-creating innovations. 

 

OneTrust: How A Privacy-Law-Compliance Tech Start-Up Became America’s Fastest Growing Company

Today I came across an incredible story of OneTrust, a privacy-law-compliance start-up based in Atlanta.

OneTrust landed at No. 1 on this year’s Inc. 5000, with more than $70 million in 2019 revenue and a staggering 48,337.2 percent three-year growth rate. It is among the global leaders in privacy-law-compliance technology with a suite of digital tools that gives companies a clearer view of all the user data they accumulate.

This enables them to comply with privacy laws, like the European Union’s General Data Protection Regulation (GDPR) which gives consumers greater control of how com­panies can use their data.

Whilst Enterprise B2B SaaS and analytics isn’t the most sexiest space, in many cases, firms that play there can be the fastest-growing, most scaleable and profitable (and do good things at the same time). 

In an age of Big Tech monopolies, increasingly intelligent AI and API-powered platform business models, growing regulatory oversight and appetite, and increasing consumer-awareness, OneTrust and others are clearly riding a tidal wave. 

Read the full story here 

 

 

Digital Playbook: How And Where to Focus to Maximise Opportunities In a COVID World

In summary, this article provides:

  • An 8-point playbook of strategies which leaders can use to focus time and resources to build digital capabilities and navigate business change
  • A useful framework to compare or evaluate existing digital investment and innovation initiatives to improve quality and impact
  • A useful article to share or use for internal discussions with non-digitally native executives, Board members and cross-functional teams
  • A set of practical strategies to guide implementation following on from the key insight and findings in the REIGNITE 2020 Report authored by Andrew Essa
  • A playbook to evaluate your digital progress and help plan for the future. Get in touch with any questions, comments or help to implement these perspectives here andrew@rocketandcommerce.com or at ROCKET + COMMERCE

The 8 strategies include:

  1. Understand current digital usage, productivity, value and benefits
  2. Diagnose and benchmark digital performance and opportunities
  3. Scale digital capacity for increasing demand but manage complexity
  4. Review and upgrade cybersecurity measures
  5. Move from ‘good’ to ‘great’ across 4 key areas
  6. Prioritise resource reallocation to digital initiatives (with a crisis mindset)
  7. Improve the digital acumen of the Board (and workforce)
  8. Organise to build digital capabilities

8 Strategies For Leaders to Navigate Digital Acceleration

Although some organisations are thriving on the back of tailwinds in this environment, many more are struggling. In many cases, the difference between the former and the latter is an organisation’s ability to rapidly adapt and chart a sustainable and differentiated path forward, especially through maximising Digital opportunities across areas including Customer Experience, Growth Strategy, Workforce Productivity, and Organisational Adaptability (I posted recently here about the 3 Big Digital Opportunities for Organisations)

Below are 8 playbook strategies for leaders to now consider:

#1 Understand productivity, value and benefits 

For most organisations, the critical first step has been to safeguard employees by enabling them to work remotely using the full suit of available tools (see below). 

hub---digital-workplace

As this continues alongside partial or even full reintegrations, firms should continuously engage or ‘pulse check’ with workers, customers and key stakeholders. It is critical to evaluate what is working well (e.g. feedback, analytics, usage), what is missing (e.g. cybersecurity, training, IT hardware), lessons learned, and where low-hanging fruit is for further digitisation opportunities and benefits (e.g. customer service and experience).

main-qimg-1e639c31c8722a6fa494676916d1199f

A challenge to overcome is that most firms typically fail to realise the full value from their technology investments for a variety of reasons (e.g. budgets, skills, governance, change, training etc). What tends to happen is some efficiency and cost reduction, but limited revenue generation, improved customer experiences and new products/services. The firms who out-perform their peers are the ones who prioritise and maximise the full potential of digital and are laser-focused on benefits realisation across the organisation. 

“The crisis has sped up the utilisation of tools such as Microsoft Teams for meetings, e-signature software and other tech which will assist both with internal and external customers moving forward. Typically face to face meetings or travel has been a big part of how we’ve conducted business particularly in my role in the past – Client Director, Private Investment Bank (interviewed in the REIGNITE! 2020 Report)

#2 Diagnose digital performance and opportunities 

For some SMEs, the current state of digital maturity involves a combination of accelerated back-end cloud, front-end software tools (e.g. MS 365), and new ways of working. Other larger, established firms however continue to have core (or hybrid) infrastructure set-ups based on outdated tools, processes, and assumptions combined poor digital acumen at leadership level and limited workforce training or up skilling.

This makes it increasingly difficult to adapt to new challenges (e.g. remote work, new services, cybersecurity), manage complexity, and properly reap the benefits of digital technologies. In some cases, the lack of agility will drag down the business which might be fighting to to rescue declining margins, compete, or even survive.

The challenge for leaders is to build on the momentum of change (‘it can be done!’) and increased adoption by leveraging the potential of digital across the entire organisation (not merely in pockets) for improved efficiency, productivity, customer experiences and new products/services.

To get started, leaders need to know what they are dealing with today.  If strategic planning around digital opportunities are to be robust and there is leadership intent to focus time and resources on the digital agenda, data and insight about the current digital state of the organisation will be needed.

Diagnostic surveys tools and assessments can help to evaluate an organisation’s digital and analytics maturity to discover digital growth, operational  improvement and worker productivity opportunities now, with recommendations on where to focus efforts for longer-term growth, change or productivity. 

At ROCKET + COMMERCE our Digital Performance Index (DPI) focuses on areas including Strategy, Customers, Analytics, Technology, Operations, Marketing, Offerings, People, Culture, and Automation. This data-driven, diagnostic approach helps CxOs and functional leadership teams to shape, refresh and align around a common vision and strategy across key digital and innovation dimensions.

We also critically incorporate human-centric approaches (see below) to our diagnostic tools which also provides people-focused data of digital change on users, customers, experiences, productivity, collaboration, skills, behaviours, trust, safety, belonging, health and well-being. 

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Read these brief case studies on how  at ROCKET + COMMERCE we have helped organisations do this and find new ways to go-to-market, become more customer-centric, launch new ventures, or pilot new up skilling programmes

This exercise also allows leaders to identify gaps between current capabilities and those of digital leaders (or the desired future state of the organisation), and plan a prioritised road map of tactical improvements or new strategic initiatives. This data-driven, diagnostic approach can also help CxOs and functional leadership teams align around a common vision and strategy across key digital dimensions. 

DMM_Model_Overview_2020

#3 Scale digital capacity for increasing demand but manage complexity 

Many IT teams are now grappling with providing sufficient capacity to serve the increased (and varying) volumes of traffic flowing through digital channels. One respondent to the survey (a provider of web-based collaboration tools), experienced a surge in demand from all of the newly remote workers and had to rapidly build out new infrastructure capacity to ensure availability.

This transition to digital channels will likely continue beyond the current health crisis as customers and organisations adopt fundamentally different ways of working. Recent research from Gartner indicates that about 41% of employees are likely to work remotely for some of the time post-pandemic. 

RemoteWorkStatisticsSource: Blackfog

The accelerated capacity build-out in H1 2020 has taken many forms beyond physical infrastructure deployment. In many cases, it has pushed organisations to adopt different architectural solutions for expansion, such as cloud bursting and augmenting on-premises deployments with virtual appliances and software-based deployments in the public cloud.

According to Mike Pelliccia, head of worldwide financial services technology solutions at Amazon Web Services (AWS), on-premises infrastructure no longer meets the business needs of today:

On-premises data infrastructures do not scale to meet variable and increasing volumes of data. Multiple disconnected data silos with inconsistent formats obscure data lineage and prevent a consolidated view of activity. Rigid data schemas prevent access to source data and limit the use of advanced analytics and machine learning. The high costs of legacy data warehouses also limit access to historical data.

The cloud helps organisations to harness the value of their data and aggregate it at speed and scale so that they can achieve their business goals. Traditional data solutions cannot keep up with the volumes and variety of data that is being collected today by financial players.

Pelliccia adds that a cloud-based data lake allows organisations – from banks to SMEs – to store all data in one central repository where it can be more readily available for the application of other technologies such as machine learning, “to support security and compliance priorities, realise cost efficiencies, perform forecasts, execute risk assessments, improve understanding of customer behaviour, and drive innovation.”

This enables organisations to maintain a holistic view of their business, while identifying risks and opportunities. For instance, analyses can help to detect fraud, surface market trends and mine for deeper customer insights to deliver tailored products and personalised experiences.

#4 Review and upgrade cybersecurity measures

Whilst many organisations will have robust cybersecurity processes and culture, for many others this will represent a new capability and massive learning curve. What was good just a few months or weeks ago may not be adequate today.

The urgency and impact of the shift away from office working will mean most organisations may have introduced new levels and types of cybersecurity risk not previously seen before at this scale (see below for leading causes of cyber risks).

bakerhostetler-causes-graph

Source: PropertyCasualty360

While allowing the workforce to be flexible is only a small part of digital transformation, it carries with it the need to ensure that new hardware (laptops, home printers, smartphones) and services have been, and continue to be, implemented securely (e.g. full disk encryption, enabling strong multi-factor authentication, and using VPN      technology).  

 #5 Move from ‘good’ to ‘great’ across 4 key areas 

Once solutions to immediate workforce and business priorities are in-flight, organisations should accelerate the exploring of different ways to use digital to work and operate, deliver innovative customer experiences, and create value in the new normal. For example, restaurants enabling entirely new in-home dining experiences, telemedicine becoming more of a norm, and different ways to shop with ubiquitous curb-side pick-up.

According to McKinsey, whilst many B2B companies have a general sense of what they need to do to become more digitally-enabled, it is the best B2B leaders who move beyond “accepted wisdom” to focus on being ‘great’ at 3 main differentiators of digital success:

  • Customer Insights
  • Process Improvement
  • Capability Building

To this list, I add a critical 4th dimension: Business Models 

The below provides further explanation:

Customer insights

  • Good: Focus on understanding their customer preferences and demographics.
  • Great: Ability to quickly translate into the most relevant value-creation strategies. Pick one or two high-value customer segments, then map decision journeys front-to-back to understand how customers buy, what channels they use, what turns them on—and off. More than 90 percent of B2B buyers use a mobile device at least once during the decision process, yet fewer than 10 percent of the B2B companies in the survey indicated that they have a compelling mobile strategy.

Process improvement

  • Good: Relentlessly improve existing processes.
  • Great: Use agile development techniques, automation, and design thinking to reengineer or reinvent supporting processes. Effective pre-sales activities—the steps that lead to qualifying, bidding on, winning, and renewing a deal—can help B2B companies achieve consistent win rates of 40 to 50 percent in new business and 80 to 90 percent in renewals. Incorporating agile techniques forces product development, marketing, sales, and IT to come together and use digital design practices, such as launching minimally viable products (MVP). That can ramp up the cultural changes needed as well.

Capability building

  • Good: Build important capabilities for digital initiatives
  • Great: Identify and augment the capabilities critical to achieving scale. B2B leaders create an organisational structure that supports their digital transformation. That involves identifying which skills need to be reallocated, what data and analytics resources are needed, and which customer opportunities require capabilities that need to be built, hired, or acquired. Systematic performance tracking needs to be in place to keep the efforts on track and make sure they having the desired impact (only one in five B2B companies systematically tracks digital performance indicators).

Business Models

  • Good: Optimise existing business model by digitising their traditional products, interfaces and distribution channels. 
  • Great: Take advantage of platform models and thinking leveraging network effects, intelligent AI-powered solutions, developer/API enablement and ecosystems, and customer-centric orchestration. As every sector digitises – accelerated by the COVID crisis – the imperative to incorporate new digital business models becomes more urgent. This underpins the ‘great’ executors. 

According to digital platforms expert Simon Torrence:

Platform thinking is about taking advantage of flexible software and digital  infrastructure to leverage, at scale, other economic actors (complementary third parties and/or developers) to create new value for customers and markets.Rather than trying to design and build everything yourself – which is the default for most companies today – platform thinking encourages you to act as a coordinator or enabling intermediary between the needs of your customers, your own expertise and the expertise of others.

Simon goes on to say that:

Incumbent leaders admire and fear the big tech giants, and would love to emulate or incorporate some of their ‘secret sauce’ into their own businesses, but don’t know how. They have been happy to invest large sums to digitise their existing business model and fund experiments, pilots and CVC investments in new areas, but have found it difficult to fully embrace the types of digital business models that work best in a hyper-connected world and to take bold steps in re-allocating meaningful levels of capital and resources towards them.

In summary, a commitment to “great” is really what allows companies to reap the rewards from digital and build digital and supporting capabilities. Without it, organisations will find their improvements provide only modest benefits that cannot be scaled.

#6 Prioritise resource reallocation to digital initiatives (with a crisis mindset)

As outlined above, the COVID crisis will accelerate the gap between digital laggards and transforming leaders requiring firms to now evaluate investments, baseline ‘digital maturity’, and in the short-term, secure a stronger, repositioned role for digital investments in 2021. 

In fact, in 2019 McKinsey believed a ‘crisis mindset’ was required. And that was before COVID….

1-920x1024

This is likely to require an urgent reallocation of resources. Although most senior executives understand the importance of strategically shifting resources (according to McKinsey research, 83 percent identify it as the top management lever for spurring growth— more important than operational excellence or M&A), only a third of companies surveyed reallocate a measly 1 percent of their capital from year to year; the average is 8 percent. 

This is a huge missed opportunity because the value-creation gap between dynamic and drowsy reallocators can be staggering. A company that actively reallocates delivers, on average, a 10 percent return to shareholders, versus 6 percent for a sluggish reallocator. Within 20 years, the dynamic reallocator will be worth twice as much as its less agile counterpart—a divide likely to increase as accelerating COVID impacts, digital disruptions, and growing geopolitical uncertainty boost the importance of nimble reallocation. 

The disconnect tends to be because managers struggle to figure out (and agree) where they should reallocate, how much they should reallocate, and how to execute successful reallocation. Additionally, disappointment with earlier reallocation efforts can push the issue off top management’s agenda.

Although these challenges can be overcome, feedback and data from employees, customers, and the maturity benchmarking should help to align senior management commitment to prioritising the short-term digital investment requirements, and at the same time laying the foundation for more detailed discussions and analysis for longer-term strategic planning. 

#7 Improve the digital acumen of the Board (and workforce)

 A UK government report published in 2016 found that the digital skills gap is costing the UK economy £63 billion a year in lost GDP. Similarly, a report from Amrop, a global executive search firm, reveals that just 5% of board members in non-tech organisations have digital competencies, and that the figure has barely moved in the last two years.

In the new COVID world requiring adaptability and digital adoption at a scale never seen before, boards must get to work in reassessing competencies, adopting new ways of working (e.g. continuous strategic planning, collaborating internally and with the wider ecosystem), and being open to hiring diverse backgrounds if needed. 

33333-1

In addition, since many new digital directors may have atypical perspectives (e.g. deep technical vs product vs strategy vs HR), companies must make sure that they have strong on-boarding processes in place, to capture and maximise the impact of their new board members.

A critical first step is to ensure a consistent understanding of what digital and innovation means amongst leaders and boards, what are the best practices of leading tech and non-tech organisations, and what are the big opportunities for digital (and threats) in a COVID world. As part of this, improving the board’s understanding of the external environment and how it is shifting, and how the big trends and signals might impact the immediate and longer-term future. 

In many cases, firms will need outside help across recruitment (e.g. diversity), training and education (e.g. research and insight, best practices, benchmarking), advisory, and briefings from experts, entrepreneurs, academics, and other ecosystem players. 

Once the above happens (which in theory can happen quickly with committed leadership), this should provide the intent and focus to refresh strategic plans and budgets, and then roll-out or accelerate digital and innovation upskilling throughout the wider workforce as a strategic priority.  

#8 Organise to build digital capabilities  

Put simply, digital capability can be defined as doing everything it takes to develop an organisation and workforce able to:

  • Maximise the potential of technology, data and talent to address business challenges; and
  • Ability to respond quickly to continual shifts in consumer behaviour and external environment in a fast-changing connected world.

According to recent study by Deloitte involving interviews with industry leaders, achieving this is not easy as the survey had a multi-faceted response. However, organisations that have successfully adapted to this new environment typically make delighting the customer their #1 priority, set bold goals to achieve factors of 10x impact, and challenge the status quo by looking for new ideas to solve.

3 core critical success factors to building digital capabilities:

Leadership:

In these times of significant change, leaders must understand, collaborate, and champion the exciting potential of technology from the very top of the organisation.

However, understanding the full suite of digital opportunities (e.g. API-based BaaS platforms) are often new and alien to leaders of incumbent firms. Teams and advisers need to help them to understand how digital can work, and the options in terms of where to play and how to win. This is critical to getting commitment to re-allocating sufficient capital and resources from other initiatives to support this market opportunity in a meaningful way.

Organisational Structure and Operating Models:

Organisations need to embed and build the right structures and models that allows them to drive digital change and execute in an agile way.  This requires clarity on the firm’s approach to digital strategy (e.g. build vs buy vs partner) as the implementation approaches to build digital capabilities will differ.

For example, many established firms will embark on dual-transformation or innovation portfolio approaches by

(i) executing process improvement and cultural change in the main firm (see ‘A’ below)

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(ii) creating separate legal entities, JVs and alliances to tackle new markets, exploit new business models, sometimes at the risk of cannibalising the main business (see ‘B’ above or ‘Exploit’ below)

82247d19-8db0-4050-8831-d4ec50b39f43.__CR0,0,300,300_PT0_SX300_V1___ (1)

03-Chart-ExploreExploitContinuum

Source: Strategyzer

PingAn has pursued the above approaches to become one of the best-performing transformer of the past decade (and become a much sough-after MBA case study subject). It typically kick-starts new ventures with partners as part of the ‘explore’ portfolio which is one of the most effective approaches to reducing risk and increasing chances of success.

Typically these are best managed away from the core in an ‘explore’ portfolio of businesses within a new organisational structure and P&L. 

Talent, Skills, Culture and Data:

Maximising digital opportunities require radically different skills, technologies, ways of working, and metrics. Organisations need to empower people to be creative, test and learn and challenge existing ways of working. They also need to cultivate diversity and a lifelong learning mindset, recognising that many will resist change. This was highlighted in PwC’s recent Skills Report.

In addition, whilst the focus of the ‘future workforce’ tends to focus on the technical and ‘hard’ skills (e.g. engineering, analytics, coding etc) it is the soft skills and humanities expertise which will gain increasing importance.

Screen Shot 2020-08-21 at 10.56.33

According to billionaire tech entrepreneur Mark Cuban:

“Twenty years from now, if you are a coder, you might be out of a job,” Cuban predicted. “Because it’s just math and so, whatever we’re defining the A.I. to do, someone’s got to know the topic. If you’re doing an A.I. to emulate Shakespeare, somebody better know Shakespeare.” Cuban acknowledged the importance of coding as a short-term opportunity. Long-term, however, the Shark Tank investor pointed out that A.I. is only as good as the data it’s given–meaning the highest-skilled workers in the future will be the ones who can identify “what is right and what is wrong and where biases are.”

Already today design thinking and human-centred design is a new differentiator in digital which complement technical mobile, cloud, AI, and other more technical digital skills.

“Creativity, collaboration, communication skills: Those things are super important and are going to be the difference between make or break” – Mark Cuban

In terms of data (the new ‘oil’) organisations need to capture, track, protect, analyse and maximise the business value of their data, as along with people, this is the most valuable asset.

Some further tactics might include:

  • Senior executive and board training, commitment and refreshed digital strategies 
  • Centralising digital business expertise (e.g. Centre of Excellence) using hub-and-spoke engagement model 
  • Hiring a Chief Digital Officer and team/function
  • New talent and up skilling (e.g. analytics, user experience)
  • Hiring external, flexible talent e.g. freelancers
  • Cross-functional governance
  • New incentives and behaviours
  • Collaborating with wider industry and ecosystem partners
  • Training will be integral which will also enable every C-level executive to be their own ‘Chief Digital and Innovation Officer’ for their functions.

Accenture summarise this using an 8 step ‘playbook’ below:

Accenture-Change-Leader-Digital-Economy-ThumbnailWhat’s next?

To better understand these issues further or explore our range of digital business advisory offerings, get in touch here andrew@rocketandcommerce.com or at ROCKET + COMMERCE

3 Big Digital Priorities for Leaders

After analysing the data of over 439 senior leaders at global organisations in the recent REIGNITE! 2020 Report, it was clear that the use of technology for 95% of the majority had been to maintain business operations, whether that was survival or business continuity in facilitating remote work. 

This is not surprising per se in response to a major emergency. Before the tectonic shifts caused by COVID-19, some organisations were executing on multi-year digital transformation plans, with others focused on fighting other fires with digital not even on the radar. 

The ongoing pandemic, economic, social and health crises continues to raise the stakes for leaders on digital priorities, underscored by three major opportunities:

#1 Increased digital adoption enables adaptability at speed and scale

For many firms this has involved a combination of accelerated back-end cloud, front-end software tools, and new ways of working. Many of those digital initiatives quickly became make or break—for example restaurants, cafes, and retailers enabling digital orders and connecting seamlessly with delivery services. 

Other firms however continue to have core (or hybrid) infrastructure set-ups based on outdated tools, processes, and assumptions which need to be re-envisioned for the evolving landscape, continuing remote workforce requirements and leadership appetite to maximise the full potential of digital across the firm.

The focus for leaders should be to build on the momentum of change the crisis has caused (‘it can be done!’) and adoption by moving beyond ‘getting back to business’ and understanding the full set of digital opportunities for customers, internal processes, workers, and organisational capabilities. 

#2 Digital acceleration increases the widening gap between the ‘laggards’ and transforming leaders 

COVID-19 has accelerated this trend and has firmly planted digital and innovation at the top of most CEO’s (and CXO’s) agenda. Whilst many of the worlds large and small companies went into tailspin or survival mode once the pandemic took hold, a handful of digital-powered and platform-enabled companies have instead added billions to their market capitalisation and top-line revenues. And they won’t stop (even likely break-up by the US government will not slow them down). 

In other words, if COVID crisis hasn’t shown you the burning platform (i.e. how fast change is moving, and how digital can help you adapt), then nothing will.

Here are the 3 rough categories of organisations today:

The Leaders: 

A business or brand, which has invested heavily (monetarily and otherwise) into a digital transformation strategy that goes far beyond ‘remote work facilitation’. Integrating key technologies and talent (up skilling existing and augmenting with external expertise) to elevate customer experiences, exploit new business models and ventures, and optimise business processes. Not to be confused with those who have attempted digital transformation, only to implement a new email system and hang up their hats.

The Laggards: 

Those who, for whatever reason, have failed to incorporate new technologies and/or invest in up skilling their talent, leaving their business to rely solely on manual or traditional forms of operations, business models, go-to-market, and communications. While you may be inclined to think of this group as pure traditionalists, grasping on to their old standards, assumptions and ways of working, this group has grown to include a much broader range of organisations. 

In talking with many leaders and employees across the world, it is surprising how many leaders have gone straight back to this way of working after Q2 2020 lockdown. In some cases, they have retreated even further. 

The Middle-Ground Mavens:

This may be the point in which you find yourself asking, but what about those in middle? Not quite a leader, but definitely not a laggard. In our post-COVID world and given the pace of change, the space taken up by these ‘middle ground mavens’ you could argue is increasingly dwindling, giving way to a landscape in which we can only find ourselves as laggards or leaders. Those who have mastered the art of transformation and innovation, and those who have not. 

(NB This is obviously hugely simplified and far from black or white, but the sentiment remains).

For non-tech large incumbents with some tailwinds and the appetite to transform, there is significant opportunity to use the scale and resources to digitise processes for efficiency, and at the same time, investing in future growth and innovation portfolios, new business models, and up skilling. PingAn’s transformation is a brilliant case in point. 

Whilst this is not easy and requires the right leadership, the alternative is arguably worse: a slow death-march toward extinction or significant value-destruction. 

 #3 Digital acceleration enables more advanced and integrated human and digital combinations

In other words, digital adoption will enable the workforce of today and tomorrow (e.g. remote, virtual, distributed, agile, flexible, gig etc) to become more productive, effective and efficient (‘smarter’) utilising automated workflows (enabled by cloud, analytics, AI, automation, software) of both repetitive and higher-order tasks.

The Boston Consulting Group call this the ‘Bionic Organisation’ which at its core will combine more advanced and integrated human/software combinations (see below):

The-Bionic-Company-of-the-Future_Exhibit_tcm-233419-1024x829

According to BCG, what the company of the future will look like is becoming clearer. At the centre is purpose and strategy: the reasons it is in business and how it brings those reasons to life. Four enablers allow companies to operate as bionic organizations: two have to do with technology and data, while the other two address talent and organisation.

What’s next?

To better understand these issues further or explore our range of digital business advisory offerings, get in touch here andrew@rocketandcommerce.com or at ROCKET + COMMERCE

119 Worst Business Buzzwords for 2020

Yesterday I posted about a new BBC podcast looking at the history behind this buzzword: Disruptor.

I since came across a list of 119 of the worst business buzzwords in 2020 (thanks to TrustRadius).  Check them out below.

The 119 Worst Business Buzzwords for 2020

  1. Synergy
  2. Think outside the box (and other variations, like “step out of the box,” an “out of the box” idea, etc.)
  3. Take it offline
  4. Circle back
  5. Low-hanging fruit
  6. At the end of the day
  7. Cloud, and cloud-based
  8. To not know what you don’t know
  9. Big Data
  10. Move the needle
  11. Leverage
  12. Agile
  13. Best Practice
  14. Digital transformation
  15. Deep dive
  16. Bandwidth
  17. Customer journey
  18. Moving forward–and its close cousin “going forward”
  19. Next level, up-level, level up
  20. Reach out
  21. Touch base
  22. Wheelhouse
  23. Disruptor
  24. Alignment / Aligned
  25. Right
  26. Bottom line
  27. Acronyms (FYI, ROI, KPI, etc.)
  28. Disruptive
  29. Value (as in value-add, driving value, value proposition, corporate values, or value drop)
  30. Ping
  31. Lean, and lean-in
  32. Paradigm (as in paradigm shift or breaking the paradigm)
  33. Partner–the verb (“Partner with us”) and the noun (“Business partner”)
  34. Ideate / Ideation
  35. Ask, used as a noun to mean “request”
  36. Learnings
  37. Holistic, especially in the phrase “Holistic approach”
  38. Culture (as in “company culture,” “corporate culture,” “startup culture,” or “creating a [inset adj. here] culture”)
  39. Thought leader / Thought leadership
  40. Content (whether “Content is king” or “snackable content”)
  41. Growth hacking (which is essentially just marketing)
  42. Buy-in
  43. Pain point
  44. Swimlane, or even just “lane,” particularly when someone is telling you to stay in yours.
  45. Best in class / Best of breed
  46. Game-changer
  47. Teamwork, team-building, and team-players
  48. Next-gen
  49. Hard stop
  50. ROI (“Return on investment”)
  51. IoT (“Internet of things”)
  52. Innovative
  53. Influencer
  54. Single pane of glass
  55. Customer-centric
  56. All hands on deck
  57. Net-net
  58. Put a pin in it
  59. Stakeholders
  60. Strategic
  61. Metrics
  62. Machine Learning
  63. Pivot
  64. On the same page
  65. Advertainment
  66. Collaboration
  67. Intelligence, whether it’s “artificial intelligence,” “business intelligence,” “emotional intelligence,” “market intelligence,” “competitive intelligence,” or otherwise.
  68. Automation
  69. Blockchain
  70. Intuitive
  71. Analytics
  72. Platform
  73. Open the kimono
  74. Unpack
  75. Giving 110%
  76. Tables of all sorts: table stakes, bringing something to the table, or tabling it for later
  77. Quick win
  78. Onboarding (and “get everyone on board”)
  79. Scrum
  80. Boil the ocean
  81. Story (in context of “storytelling,” “user stories,” or making a “long story short”)
  82. On your plate, or having a “full plate”
  83. 30,000 ft. view, 10,000 ft. view, and other escalations of a top-down view
  84. Core competency / Core capabilities
  85. Rockstar
  86. Loops: “looping back,” keeping someone “in the loop,” or the dreaded “feedback loop”
  87. Free, and even worse, freemium
  88. Blue sky
  89. Integration
  90. Engagement
  91. Actionable
  92. Efficiency
  93. Socialize
  94. Diversity
  95. Verticals
  96. Bio-break
  97. Bleeding edge
  98. Optimize
  99. Scalable
  100. Organic
  101. Omni-channel
  102. Empower
  103. Win-win
  104. Optics
  105. DevOps
  106. Data-driven
  107. In the weeds
  108. Double click (as in to “double-click” into something)
  109. On your radar
  110. Ducks in a row
  111. Drill down
  112. Space (as in “playing in” a particular “space”)
  113. Fast in various forms, such as “fast-paced,” “fail fast” or “cheap, fast, and good”
  114. Top of mind, mindfulness, and mindshare
  115. KPI (“Key performance indicator”)
  116. ASAP (“As soon as possible”)
  117. Giving back your time
  118. Per (“per se,” “per my last email,” etc.)
  119. FYI (“For your information”)

Behind The Buzzwords Podcast: Disruptors

The business world is famous for jargon and phrases that become so overused they soon become meaningless. ‘Disruptors’ is one of these words, and is explained from different perspectives in this great podcast episode from BBC called Behind The Buzzwords.

I came across the term ‘disruptive technologies’ in the early 2000s after reading The Innovator’s Dilemma by the late Professional Clayton Christensen. I ended up using some of his theories to help me with major research project analysing what was going on with the record labels and retailers in the Australian music-industry as online P2P file-sharing emerged and began to ‘disrupt’ the physical music business model. 

Interestingly, the perception of ‘disruption’ was subjective. For the small indie labels and artists, digital music was a new opportunity to reach new audiences. For the major labels, it was perceived negatively as a threat, especially as no legal services existed. It was the same with music retailers. 

This podcast explores these fascinating issues further in the context of 20 years on. It is well worth a listen. 

Humanocracy: Creating Organisations As Amazing As The People Inside Them

It is rare that you come across a business book that makes you scream “YEEEESSSS!” when you haven’t even read it yet. In fact, I don’t think that has ever happened to me before.

Just a few words in the blurb from author Gary Hamel did it for me:

“Our organisations are failing us. They’re sluggish, change-phobic, and emotionally arid. Human beings, by contrast, are adaptable, creative, and full of passion. This gap between individual and organisational capability is the unfortunate by-product of bureaucracy–the top-down, rule-choked management structure that undergirds virtually every organisation on the planet” – Gary Hamel, management guru and author of Humanocracy

humanocracy-cover-2x

This quote, COVID-19 and first-hand experience of these issues over the past 20 years provided the inspiration for me to want to better understand what is going on inside large and small organisations around the world across 15 dimensions including leadership, strategy, culture, processes, and technology.

This led to a multi-month project producing the REIGNITE! 2020 Report, numerous new tools and frameworks including the COVID Response Index (CRI) and REIGNITE! FLYWHEEL, a forthcoming ebook (wait list here), and new set of offerings at REIGNITE! Global. 

I doubt Gary Hamel realises what he has started and the impact he is going to have with this book. Actually, he probably does.

Humaocracy is out soon and on pre-order now. Obviously, I have signed up. Book review to follow in September I think.

#covidresponse #covidimpact #leadership #strategicresponse #organisationalbehaviour #organisationalchange

First And Second Order COVID Impacts

Every day there is a new story or report on how COVID will impact X, whether business, industry sector, country, health, your brain, and so on. This has been going for months, and obviously will continue for a long time.

In fact yesterday I posted about this in relation to the island I live (Guernsey).

I’ve since started a very basic list of these impacts. I’ve divided up into first order (direct) and second order impacts (indirect). I haven’t done so but I will need to categorise them.

Over time I’ll aim to build up in a database and post updates here. In the meantime, please feel to comment or add your perspectives here or on the socials.

First Order Impacts

  • Reduction of in-bound and outbound business and leisure travel
  • Increasing shift to online business development and sales
  • Increased e-commerce and local delivery needs
  • Increased demand for flexible and remote working
  • Increased home office improvement needs
  • Shifting social and psychological contract for workers and consumers
  • Increasing focus on mental health, wellbeing, worker and customer safety, trust
  • Office rationalisation due to safety measures and demand for flexible working
  • Smarter, frictionless offices with more automation, smartphone ID, facial recognition and refit for more experiential work e.g. client meets, collaboration, workshops, creativity, training
  • Increased demand for more use cases beyond shopping for contactless payments and frictionless ordering e.g. restaurants, cafes
  • Commercial real estate, higher education and executive training, and hospitality models upended

 Second Order Impacts

  • Trust, safety, culture differentiator for certain workplaces in areas
  • Potential migration away from over-populated major cities (e.g. UK) into second cities, regional or coastal areas
  • Universities unlikely to open meaning a significant number of ‘gap’ years for 18 year olds
  • Existing older leaders aim to cement positions and hold on to ‘power’ or a changing of the guard for new perspectives
  • Changing mix of workforce with more comfort for a ‘talent anywhere’ model
  • Requirement for more flexible resourcing with demand for more specialised contract and freelancers
  • New sectors developing hybrid on/offline business models for smarter, more relevant customer experiences e.g. education, gyms, training, retail
  • More public and private infrastructure development
  • Talent anywhere to hire the best wherever they are
  • Smarter, frictionless, reconfigured offices which may be provided as a perk
  • Smart phone use cases in-store increase e.g. digital ID, office access, ordering in-store
  • Privacy issues around any contact tracing services
  • Retail high-streets and commercial workplaces continue to transform with more residential housing

The Big Opportunities for Guernsey (& Other Island Nations)

*This blog post was written on 3rd July but not posted until 4th August. It formed part of the The REIGNITE 2020 Report but in the final edits I decided to take it and post separately. Whilst it has not been updated since writing, many of the points remain relevant. The post was written for discussion purposes and not designed to be exhaustive, detailed or rigorous. 

As attention turns to recovery and rebuilding through the States of Guernsey’s Revive And Thrive Strategy, the challenge for the private and public sector will be in using the crisis as an intentional opportunity to boldly rethink ambitions, and adapt and execute quickly and creatively in the post-pandemic world. This is also especially important as the need respond with agility to future relapses will be likely as Guernsey balances economic recovery with health and safety.

A key risk for the future of Guernsey is that this opportunity is lost as people, firms and government simply return to ‘old’ ways of thinking, working and operating. The benefits of excellent health risk management in Guernsey may have unintended consequences, but only if local leaders and policymakers fail to take up the new call to action.

Whilst the data from 335 Guernsey leaders and business owners surveyed in The REIGNITE! 2020 Report indicated significant impacts for many Guernsey organisations, others have been able to respond with new offerings and ways of working, and accelerated investments into new technologies and processes.

We used this ‘impact’ data to categorise patterns and themes of impacts for Guernsey at large. Whilst by no means exhaustive (with many applicable globally), a few of these  include the following:

First Order Impacts

  • Reduction of in-bound and outbound business and leisure travel
  • Increasing shift to online business development and sales
  • Increased e-commerce and local delivery needs
  • Increased demand for flexible and remote working
  • Increased home office improvement needs
  • Shifting social and psychological contract for workers and consumers
  • Increasing focus on mental health, wellbeing, worker and customer safety, trust
  • Office rationalisation due to safety measures and demand for flexible working
  • Smarter, frictionless offices with more automation, smartphone ID, facial recognition and refit for more experiential work e.g. client meets, collaboration, workshops, creativity, training
  • Increased demand for more use cases beyond shopping for contactless payments and frictionless ordering e.g. restaurants, cafes
  • Commercial real estate, higher education and executive training, and hospitality models upended

 Second Order Impacts

  • Trust, safety, culture differentiator for certain workplaces in areas
  • Potential migration away from over-populated major cities (e.g. UK) into second cities, regional or coastal areas
  • Universities unlikely to open meaning a significant number of ‘gap’ years for 18 year olds
  • Existing older leaders aim to cement positions and hold on to ‘power’ or a changing of the guard for new perspectives
  • Changing mix of workforce with more comfort for a ‘talent anywhere’ model
  • Requirement for more flexible resourcing with demand for more specialised contract and freelancers
  • New sectors developing hybrid on/offline business models for smarter, more relevant customer experiences e.g. education, gyms, training, retail
  • More public and private infrastructure development
  • Talent anywhere to hire the best wherever they are
  • Smarter, frictionless, reconfigured offices which may be provided as a perk
  • Smart phone use cases in-store increase e.g. digital ID, office access, ordering in-store
  • Privacy issues around any contact tracing services
  • Retail high-streets and commercial workplaces continue to transform with more residential housing

Opportunities for Guernsey

Based on the survey data and analysis, the following non-exhaustive list of opportunities were identified. All will require smart, fast-moving and collaborative government to accelerate existing initiatives (e.g. Green Finance) and to think and act creatively, boldly and collaboratively on new initiatives to maximise economic development across a variety of areas:

  • Guernsey Vision: Agree a refreshed shared, common vision for the future of Guernsey in light of the new world and Guernsey capabilities, and accelerate initiatives to implement
  • Safety-As-A-Service: New business opportunities for existing or a new set of service providers to help businesses to set-up, maintain and ensure ongoing COVID-19 health and safety compliance
  • Safe Haven: Position Guernsey as a safer destination for UK/Jersey/France travellers or any individuals, families or businesses looking to relocate from overseas to Guernsey, especially when UK and other nations’ travel restrictions loosen;
  • Staycations: Hospitality to create new, tailored and segmented packages, experiences and integrated offerings to attract the spend of local Guernsey residents which traditionally goes off-shore
  • Cross-Placements: Another strategy for acquiring talent is cross-placement, which involves finding hidden talent from other industries that can be redeployed for your company.
  • Public Works: Fast-track known public expenditure projects (e.g. Seafront, Airport etc) and encourage new public-private partnerships to upgrade, regenerate, and redevelop areas plus provide employment, create new businesses, and support existing businesses (e.g. hospitality)
  • Centre(s) of Excellence: Whether this is in Fin or RiskTech, Green Finance or other areas, Guernsey has untapped potential and needs to build up an ‘innovation cluster’ of capabilities in close collaboration with the private-sector (or new unit), and firmly commit, invest, enable, and market these unique capabilities
  • Entrepreneurship: Accelerate investor incentives (e.g. EIS) and other measures to encourage start-ups or scale-ups with increased flows of early-stage capital
  • Commercial Property: With many vacant properties sitting idle – which is              now likely to increase- encourage owners to off-load properties and/or provide more flexible planning and incentives to allow new investors, generations,  and alternative business uses to thrive
  • Corona Corp: Create a ‘Guernsey Corp’ of school-leavers or university students who now may not leave the island to start or continue University to work on Government COVID-19 rebuild initiatives e.g. apprentice schemes
  • Government Automation: Rapidly increase the online self-service capabilities of Government departments, transform across the back-end and front-ends, and experiment with new solutions (e.g. Digital ID)
  • Regulatory: Regulators will take a lot of lessons from how the financial sector performs during the COVID-19 lockdowns, both in terms of finding out what existing processes and tools worked best plus new technologies, but also identifying vulnerabilities that need to be addressed by future standard-setting.
  • University: It is highly likely that despite parents wanting to ‘off-load’ their teenagers from the house, many Guernsey students may not go back to the UK due to COVID uncertainty and risks. Whilst COVID will cause many UK universities who offer Hyuandai-quality certifications for a Mercedes price to push harder into online learning (or offer diminished campus experiences), this will happen against a backdrop of increasing deferral rates, supply challenges for mid-tier schools without a deep wait-list, and an inability to cut costs. Many mid-tier universities and colleges will close whilst others too reliant on international students and without strong business and financial models begin a slow death-march. Perhaps this presents an opportunity for Guernsey to facilitate, improve the offering of an existing higher-education provider, partner, or build a University-type solution, skills academy or certification provider in a ‘safe’ local environment to develop the most locally relevant skills to support both the FS and wider sectors. This is a critical component for Guernsey’s future competitiveness especially in a COVID world. If these conversations and plans have already been discussed, they should be fast-tracked.