“New Law” Opportunities for Law Firms

I recently came across a presentation I gave in April 2015 to senior partners at Eversheds LLP in London. At the time, Eversheds were proactive in starting to diversify their professional services offerings away from traditional legal and transactional work into ‘alternative’ services areas, such as business improvement consulting for in-house legal teams, and flexible resourcing solutions.

At the time, it was unusual for a major corporate firm to be experimenting into different areas.

The question for the presentation was as follows:

Downward cost pressure, deregulation and new technology are transforming the legal industry, as ‘New Law’ providers compete with traditional law firms.  What are the opportunities for large law firms in this evolving marketplace? 

I focused on 2 main themes of (a) Changing the mind-set and (b) Managing innovation.

Since then, in six years a lot of innovation has been introduced into the legal sector. However, it has been a fairly low-bar for many years with the legal sector ‘glacial’ when it comes to change and technology.

Certainly the ‘legaltech’ and/or ‘lawtech’ markets have received significant injections of VC to build next generation B2C and B2B solutions. Most large firms are now experimenting with different AI and automation solutions, running incubators, offering flexible resourcing arrangements, investing in start-ups, and so on.

To better support Fortune500 General Counsels with their efficiency challenges, the Big4 are building services and capability at scale, as are legal process outsourcers and ALSP’s.

Many of these ideas were referenced in the presentation.

However, the critical question is has anything really changed in how legal services are delivered, bought and sold? How much of this is ‘innovation theatre’ and nibbling around the edges versus real change?

For example:

  • Does the partner in the Freshfields office in HK work any differently then they did as a trainee 20 years ago?
  • Are the skills and requirements of a newly qualified lawyer any different?
  • Does the single lawyer law office in Bristol run their practice any differently?
  • Does the COO of a regional law firm run the business any differently?
  • Do consumers who need a family lawyer do this any differently?
  • Does the barrister or judge involved in a trial do this any differently?

The short answer I think is not a great deal of change across the industry as a whole. However there has been a tonne of experimentation and innovation in some fragmented areas, especially in B2C (e.g. DoNotPay). COVID-19 has certainly accelerated this, and that can only be a good thing.

I think what we are seeing is a marathon, not a sprint. In fact, it is more like the start of a triathlon where there’s a washing-machine effect as participants fight their way forward before a steadier state emerges.

We see this with most new technologies, where things often take much longer to truly disrupt. In retail and e-Commerce, it is only recently that the Internet is causing significant challenges for traditional players, almost 20 years after the Dot.Com crash in 2001.

One thing is for sure – the next 10 to 15 years in the legal sector will be fascinating.

How To Create Winning Strategies That Reignite Human Potential, Adaptability and Creativity

Yesterday I gave a presentation to a NED Forum event sponsored by Investec. It covers a topic that I think is one of the most important issues for CEOs and Boards today who continue to grapple with the challenges of COVID.

The 3 key objectives for the presentation were to:

  1. Better understand what are some of the key and complex forces at play in organisations due to COVID
  2. How organisations can be more adaptable and resilient to future disruptive change
  3. And how to do this with more humanity using some best practices of a growing new breed of organisations out there

You can view the presentation here or below including the REIGNITE! 2020 Report:

The REIGNITE! 2020 Report

For those interested on more detail, below I have pasted in snippets of the talk including the Introduction.

Enjoy!

——

Hello and welcome everyone. Thank you to The NED Forum and Investec for the opportunity to speak here today. My name is Andrew Essa, and today I’m going to cover a topic that I think is one of the most important, if not THE most important, issues for CEOs and Boards today.

And that is:

Not just about turning this COVID crisis into an opportunity

Not just about where CEOs should focus, or where to invest

And not just about what winning strategies to implement to outmanouevure the competition

But more about HOW to do all of this in a way that is also more humane, more trusting and less bureaucratic, and in a way that can unleash the potential and creativity of people to have more impact and more fulfilling work lives

So we will aim to do 3 things here today:

  1. Better understand what are some of the key and complex forces at play in organisations
  2. How organisations can be more adaptable and resilient to future disruptive change
  3. And how to do this with more humanity using some best practices of a growing new breed of organisations out there

Slide 2 – Gary Hamel quote

  • So to bring this quote which I love and also my ‘fascination’ with this topic – I’ll tell you a quick story about ABC Learning Company, based here in Gsy. 
  • Obviously that is not their real name but I came across them in some research I did during Q2 and lockdown. 
  • In the research which later became the REIGNITE 2020 Report – which I’ll introduce shortly – there was so much devastation across sectors including travel, hospitality, retail, construction, manufacturing, and so on. 
  • In fact 50% of the 439 leaders surveyed were in total despair, in terms of closures, restructuring, uncertainty and so on. 
  • However…there was a glimmer of hope!
  • About 10% of businesses were doing extraordinary things. They were using the crisis as an opportunity to reset, rethink, and reinvent. They were pivoting, quickly using technology to launch new offerings, testing new business models, and at the same time becoming more efficient, productive and reducing costs.
  • In terms of ABC Learning, it was a typical lifestyle business providing high school tutors, owned by one person with 5 tutors on the payroll. No online presence, web-site or anything. Business stopped overnight with lockdown, but by rethinking things quickly and using simple online and digital tools – google spreadsheets for CRM and bookings, zoom for delivery of live sessions, stripe for online or over the phone payments, the owner was not only able to quickly survive but doubled revenue during lockdown, hired 10 more tutors on contracts, and created a scalable solution which allowed for recorded training on-demand on popular topics. So better CX, more revenue and profits.
  • So what is interesting here is the combination of human psychology and business strategy during a crisis: so how did the leader reinvent whilst everyone was retreating, what can we learn, and how can we emulate this for our own contexts
  • This is what underpins today’s talk and certainly the REIGNITE 2020 Report which I’ll introduce shortly.

Slide 5 – The Modern Org is Under Attack

  • So the modern organisation is clearly under attack from so many angles. 
  • The pace of change now is exponential and only will increase as further technological convergence happens through digital, AI, automation, analytics and so on
  • Today’s orgs look and feel very similar to how they have always been – command-control, top-down consistency, coordination and standardisation- which is the classic bureaucracy 
  • In US 1983-2019 the bureaucratic workforce – managers and overhead – has doubled in that time-frame VS growth of 50% in all other job categories
  • At same time productivity per OECD has gone down since them
  • Mental health, burnout, anxiety, stress, bullying, politics, discrimiation, harassment etc has skyrocketed 
  • Do we know anyone who is a leader, manager or worker and genuinely feels inspired, trusted, valued and engaged by their organisation every day??
  • We can’t afford it anymore!
  • So the question becomes, is it possible to build organisations that are big and fast, disciplined and empowering, responsive to market shifts yet resilient, efficient and entrepreneurial, and bold and prudent?
  • Many examples of new breeds of organisations successfully operating with 1/2 of bureaucratic load of traditional org
  • Case study – Buurtzorg (page xi)
    • Dutch firm Birdszaard home-health employers 16,000 nurses and home-carers with 2 line managers with a span of control of 1-8000!
    • They do this with dividing into small teams, give them the data they need to be self-managing, connect with a social platform to collaborate to solve problems and collaborate and share best practices, hold deeply accountable with P&Ls
    • Gives all the advantages of bureaucracy with control, consistency and coordination with no drag or overhead

On Digital Business:

  • Speed and scale: Digital and cloud has enabled adaptability at speed and scale;
    • The crisis has shown that rapid change at speed and scale is possible using digital and cloud in the short-term.
  • Increased adoption: Increased adoption of back-end cloud and front-end productivity tools, from e-signature to VC to MS365 to Dropbox etc
  • Effectiveness and benefits: Focus now on what is working, what isn’t, benefits realisation, productivity, efficiency, training, 
  • Complexity: So much going on…..managing capacity, cybersec, managing the complexity of the new IT estate, ensuring greater resource allocation with 2021 budgets, investments and leadership commitment to that 
  • Scaling and Transformation: The best firms – probably not many – are:
    •  firmly putting digital at the centre of corporate strategy
    • looking whether to build vs buy
    • aligning leaders on digital acumen so every CXO is a Chief Digital Officer for their function
    •  looking at wider opportunities for upskilling and digital adoption across the firm – so beyond infrastructure into more advanced worker productivity tools – automation, AI, analytics, superior Customer Experiences, New Business Models and Products/Services, Ecosystem Collaborations/Ventures
    • As well as more strategically, how to better organise and transform to become a digital business
  • Caution! Digital laggards will get left behind due to external forces and competitive intensity

On Trust + Safety:

  • So this is such a critical, complex and often overlooked dimension, mainly as it requires leaders to be empathetic and emotionally intelligent, and unfortunately many aren’t  
  • The BIG opportunity is that for the firms who get these complex dynamics right, will differentiate themselves from a talent retention and hiring perspective and become the new employers/brands of choice 2021+
  • But first we need to look at the state of play before COVID
  • In a nut-shell, there is very little trust, just need to look at amount of oversight, rules, policies, rule-choked processes and employees get this and know they aren’t trusted and even that their managers don’t think they are very capable
  • UK amount of discretion people have in jobs has been going down in last 20years
  • Only 1 out of 5 believe their opinions matter at work
  • Only 1 in 10 have the freedom to experiment with new solutions and methods
  • Most people can buy a car or house but same people in organisations can’t order a better £150 work chair without going through crazy internal hoops and hurdles
  • The way organisations are organised it is a caste system of managers and employees of thinkers/doers which causes disengagement of people from their work
  • Gallup surveys show only 20% of those highly engaged in their work – this is ALARMING so something needs to change
  • So against that backdrop you introduce a health and economic crisis of proportions never seen before, which impacts the human psyche in many different ways, and for most orgs you have a widening trust gap
  • Key impacts:
    • The “psychological contract” between employer/employee has also shifted for many
    • Traditional work assumptions have been challenged, firms must now not assume ‘old’ practices were the right ones
    • Acceleration of complex issues around safety, mental health, inclusivity, belonging, empathy, EQ, culture and behaviour, power dynamics, and expectations on leadership styles

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

 

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)

DQ7v-LKUEAEeVK5

(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

The REIGNITE! 2020 Report

“Many have compared the COVID crisis to armed conflict … Once this war against an invisible enemy is over, our ambitions should be bolder – nothing less than to make a fit planet for our grandchildren to live on”Mark Carney, Former Governor, Bank of England

After a few months of research, analysis and writing during lockdown, I am pleased to be able to finally share insights from one of the largest single studies of strategic responses of Guernsey firms to the COVID-19 pandemic (“crisis”) conducted to date.

You can access the full report here, or below I have pasted in the key sections.

Background

Between April and June, I surveyed 439 senior leaders across Guernsey, UK, EU, US, APAC using a 15 question open-ended online survey (see below):

Strategic-Response-Roadmap-(SRRM)

Why?

Given the nature and scale of the pandemic, this really is a once-in-a-lifetime opportunity for organisational behaviouralists to understand what is going on in terms of how firms, leaders, employees and other stakeholders are responding over time.

Specifically, for leaders and firm the findings hopefully help with the following:

New Insight: Leaders and teams can better understand the strategic responses of large and small firms across many different sectors to the crisis, and the complex consequences, behaviour, and implications it has had on firms, people and customers

Priorities: Leaders and teams can learn about the priority focus areas and big opportunities for leaders to better structure and get to work to rebuild and reignite performance

Behaviours: Leaders and teams can learn the new leadership styles, cultural behaviours, mindsets, and ways of working needed to turn crisis into opportunity

Key Findings:

We identified 6 areas of insight for leaders and firms:

  1. Evolution AND Revolution

  • 5-10 years of change in 5 weeks for many sectors
  • Rapid acceleration of many pre-existing structural trends (e.g. cloud, flexible work, e-commerce, up-skilling) and new behaviours likely to endure
  • For many change will likely be evolutionary but for others it will be revolutionary with increasing pace of change e.g. retail.
  • Leaders must continuously identify, evaluate and scenario plan for the right market signals, trends and new consumer behaviours
  • Firms who don’t do this, get it wrong or go too slow risk disruption, market share loss or other business risks

OPPORTUNITY: The top 5 key trends impacting your firm today will provide the investment roadmap for your next 24 months

2. Trust As A Differentiator 

  • There are complex dynamics at play and business and moral imperatives for leaders to assess the impact of the crisis on the human psyche which has affected people in many different ways
  • The “psychological contract” between employer/employee has also shifted for many, and firms must now not assume ‘old’ practices were the right ones.
  • Traditional work assumptions have been challenged, as as well complex issues around safety, mental health, inclusivity, belonging, empathy, EQ, culture, power dynamics, and expectations on leadership styles 

OPPORTUNITY: The firms who get these complex dynamics right will become the new employers/brands of choice 2021+

3. Digital Acceleration 

  • The crisis has shown that rapid change at speed and scale is possible using digital and cloud in the short-term.
  • Rapidly advancing and converging technologies combined with increasing human capabilities, new business models and ways to organise and lead are needed.
  • Digital laggards and firms with limited customer-centricity will get left behind due to external forces and competitive intensity

OPPORTUNITY: Put digital at the centre of your corporate strategy, align leaders on digital acumen so every CXO is a Chief Digital Officer for their function, upskill workers, and prioritise the top3 digitising opportunities beyond back-office operations into more advanced worker productivity tools (e.g. automation, AI, analytics), superior customer experiences, new products/services and ecosystem collaborations/ventures

4. New Skills, Mindsets and Ways of Working

  • As a shift to ‘smarter working’ means different thing to different firms, it is important to define what it is, what it means for the firms and employees, and what are the expected behaviours, required, skills, mindsets, and ways of working.
  • Continued experimentation is required to engage with workforce, test models, gain feedback, learn best practices, and repeat, but the risk is many firms will likely revert to old habits and practices which will jeopardise trust with their talent
  • This process is critical as learnings will likely have firm-wide impacts to entire workforce and processes, practices, culture and strategies e.g. training, performance management, corporate values, recruitment, rewards, policies, agile methods

OPPORTUNITY: Whilst firms who prioritise and commit to this will adjust more quickly to the landscape, those who use intentional cultural design as the agent of change will build a stronger platform than peers for longer-term success

5. Resilience And Adaptability 

  • Whilst many firms are making cuts to ride out the storm or shutting down permanently, our research identified many entrepreneurial firms who adapted quickly with new business models AND in parallel also focused on financial restructuring (e.g. loans, capital raising) and enhancing productivity (e.g. software, up-skilling), better utilisation (e.g. re-deploying staff), or improving customer experiences (e.g. online ordering via Facebook Commerce).

OPPORTUNITY: The firms who get the right but very difficult balance of resilient best practices, innovation for growth with longer-term exploration, and agile/new ways of working will be well-positioned to outperform peers and last for the longer-term

6. Increasing Leadership Complexity 

  • Given the nature of the crisis, for many leaders it represented a call to action to adopt both crisis management AND people-focused behaviours such as empathy, self-awareness, openness, vulnerability, and EQ
  • The best leaders will also now spend more time on longer-term growth and innovation planning and exploration

OPPORTUNITY: Self-awareness is critical for leaders to start addressing skills gaps. Those who do and forge more trusting, purposeful, inclusive, authentic, and empathetic workplaces will retain (and be able to hire) the best talent and rebound faster then competitors

Survey Results

The survey results showed that the crisis has impacted organisations in many different ways over time. Some have had headwinds and tailwinds, but many have been caught in the middle.

The challenge now will be for leaders to be ‘open’ to understanding ‘what is going on’ inside and outside the firm, evaluating the degree to which each is relevant and to what extent, and then planning and executing an appropriate response.

Confidence

Whereas 92% of international respondents were confident of being able to get through the crisis, only 64% of Guernsey respondents felt confident

Speed                                 

96% of respondents indicated that their firms were able to respond to the crisis fast (52%) or extremely fast (44%);

Impact          

22% of firms were unable to operate due to the crisis

Change

Smarter working (34%), new technologies (33%) and new offerings (22%) were pre- planned changes that were accelerated due to the crisis

Work     

47% of respondents saw no changes to their work (i.e. work remotely) with the remaining undergoing disruption including job losses (15%). Adapting to virtual meetings (26%) and new ways of working (27%) were the major changes to jobs/skills

People

Employee safety and well-being (31%) were the major areas of people focus

Leadership                       

Empathetic leadership (25%) with strong communications (23%) were the major leadership behaviours demonstrated

Technology  

Desktop and mobile video-conferencing (VC) tools (46%) and cloud-based document and collaboration software (28%) were the most valuable technologies

Culture

Supportiveness (30%) and team spirit (20%) were the most valuable cultural attributes

Processes

New ways of working (18%) and new technologies (18%) have been the most important processes to improve

Innovation + Growth

 Interestingly, only a small number of firms  innovated with new channels or offerings (7%), with 12% engaging more with clients/partners (12%), and 14% indicating ‘no innovation’

What survey respondents said about the impact of the crisis on:

 IMPACT:

“Categorisation of business critical role and function for immediate, should and medium term. Anything out of above scope, amended, reduced or halted. Focus is on surviving the immediate challenge and preparation for reopening” – Hotel Owner

 SMARTER WORKING:

“The crisis has enabled more working from home flexibility, more focus on work life balance in times like this where stress and anxiety are a big part of many employees’ lives”Director, Training Firm

CHANGES:

“More areas of focus needed include managing mental health and wellness during and after the crisis; planning for the ‘new normal’, whatever that may be, and likely to be different in many ways to how we worked before COVID; and reintegration – thinking carefully about how we transition back to face to face after a sustained period of disruption, easily underestimated and ignored as a potential challenge”Management consultant

LEADERSHIP:

“Empathy, transparency, and authenticity. For example, our MD did a WebEx from his daughter’s bedroom for all to see”Sales Director

CULTURE:

“Agility, flexibility, ability to make quick decisions” – CTO

TECHNOLOGY:

“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” – Investment Banker

GROWTH + INNOVATION:

We have built industry specific thought leadership and points of view that have historically fallen down the list behind client work; digitising our many face to face interventions, essentially helping us build out a whole new suite of assets that are now deployable in a virtual environment now and beyond COVID; more time for training and personal development – Learning and Development Manager 

Conclusion

In summary, the crisis presents a significant opportunity for all leaders and firms to reset and lean-in to fully understanding what is going on in terms of how the crisis is impacting organisations in the short-term, what this might tell us about longer-term impacts, and where and how to focus efforts and investments across the operating model.

Reimagine The Future Online Conference

This Reimagine The Future virtual conference starts today and I have signed up for it.

It is being run by Thinkers50 and Outthinker and features 24 top management experts doing 24 sessions in 24 hours including Renee Mauborgne (INSEAD and Blue Ocean Strategy), Scott Anthony (Innosight), Daniel Pink, and Hal Gregerson. Recordings of every session will be available on-demand so there’s no need to be live.

All profits are going to a range of charities involved in COVID-19 relief. You can access tickets here.

Assessing Your Firm’s Innovation Readiness

Before COVID-19, it would be fair to say that most CEOs to some degree were focused on innovation as a top or near-top priority. Whilst the current crisis has caused many of these CEOs to adjust priorities and resources to short-term survival mode, there are others who are accelerating, pivoting or experimenting with new businesses in the face of disruption from the pandemic fall-out.

There are many tools out there to help leaders to re-start, or get started, on a future-focused innovation and ‘exploration’ path. Below are a few tools which might prove to be useful. They are from StrategyTools in Norway, and were valuable for me with a client recently. You can read more information on these tools here.

If you have any feedback on these or other related tools, be sure to let me know.

Transformation_Test

 

Transformation_Architecture

 

9 Tools To Enhance Strategic Planning

In the midst of the COVID-19 crisis, strategic plans of every company around the world are being torn up and re-written. As an expert in strategy formulation – whether corporate, business, product, technology or operational – I have listed a number of useful tools which can help with this process.

There are many, many tools out there, however these are ones which I have used the most over the past 12 months.

If you have any feedback on these or other ones you have found valuable, be sure to let me know.

  1. Strategic Planning Process

There are 100s of versions of this process, whether from academics, consultancies, or other practitioners. In fact, the topic occupies a huge amount space in the strategic management academic literature following decades of empirical studies.

Whilst I don’t have a specific view on this one or other tools, if you just want a rough, simple, logical guide on the general steps, this one works (sorry, I don’t know the source).

What are the steps of strategic planning? - Quora

2. 11 Sources of Disruption 

This is from Amy Webb, a Professor of Strategic Foresight at NYU and Founder of the Future Today Institute. It is like PESTLE on steroids. I tend to add a few more categories, and you can read about those additions here

The Future Today Institute | The Future Today Institute helps ...

3. Strategy Introduction

This is a tool from Strategy Tools, founded by Norwegian academic and consultant Christian Rangen. You can read more about the tool here

Strategy_Intro

4. Strategic Time Horizons 

Another tool from Amy Webb which links strategy to time. You can read more about it here

How To Think About Time | The Future Today Institute

5. Strategic Innovation Canvas

Another tool from StrategyTools. It builds on the Horizon Planning map and links degree of innovation to time. You can read more about here

Strategic_Innovation_Canvas

6. Industry Shifts Map

The Industry Shifts Map helps you identify, analyse, and develop capabilities to go after new market opportunities. You can read more about it here

Industry_Shifts_Map

7. Business Model Canvas

This is a popular one when looking for a simple way to analyse and present thinking about an existing or new product/service. You can more about it here.

Alex Osterwalder🇨🇭 on Twitter: "*Simplicity* is the ultimate ...

8. Value Proposition Canvas

Another tool from Strategyzer, it allows you to map customer profiles with value to the created. You can more about it here

Value Proposition Canvas - ProductCoalition.com

9. Go-To-Market (GTM) Strategy

There are 100s of GTM tools out there. Whilst I don’t have one which I have utilised every time, this one is a good, simple starting point (I don’t know the source, sorry).

Go-to-Market Strategy - Who Are You Selling To | Marketing plan ...

 

Mental Health Impacts of COVID-19

On Friday I caught up with a friend who works at WhatIf (now owned by Accenture). We were talking about the impact of COVID-19 on the future workforce. He mentioned an interesting point around how the crisis could drive increased mental health impacts as employees (and companies) grapple with the future transition from ‘work-from-home’ to whatever is the ‘new normal’.

Some firms may stay as is, some may adopt a hybrid model, and some may go back to offices full-time. Whichever the model, each presents its own set of unique short-term challenges for staff and firms.

Gartner have a great article here discussing these issues further. It is called ‘Leading Your Employees Through The Emotional Side of COVID-19’. If you are leading or managing teams, I suggest you take a look.

Strategic Responses of Firms to COVID-19 Crisis

This week I developed and launched a survey designed to gather insight on how a range of firms in different sectors are responding to the COVID-19 crisis. If you are interested in completing it, the survey is here.

To provide more context, I’ve pasted below what is contained in the Introduction section of the survey:

Overview:
This survey seeks to understand what strategies, tactics and activities a sample of organisations large and small across sectors are undertaking to manage the current crisis. It is a project being run by Andrew Essa of ROCKET + COMMERCE (a management consultancy). An advisory board of cross-industry leaders is forming to interpret the results.

Geographies surveyed include firms based mainly in Guernsey and Jersey (Channel Islands), although there will be respondents from UK, EU, US, and APAC.

Timings:
The last day to complete the survey is 30th April 2020.

Interviews:
A number of short interviews via VC are also being conducted with select leaders or senior managers. If you would like to apply, please contact Andrew Essa via the details below.

Insights:
The results will contribute to a white-paper and new report series e.g. Disruptive Change 2020 Report. I will share these with all respondents in due course. It is expected to generate useful market insight for firm leadership on how your peers within or across sectors are managing and strategically responding to the crisis. The results therefore should improve firm decision-making in the short and long-term, including strategic planning, operational reviews or change management.

There may be further (e.g. 3+) surveys across the year to track strategic responses and changes over time as the crisis develops, but this will be kept under review.

Audience:
The target respondent is a senior manager, executive or experienced professional within an organisation. Firm sizes will range from international business to local SMEs, with sector coverage broad including Technology, Financial Services, Legal, Accounting, IT, Retail, Aviation, Health, PR, Government, Corporate & Fiduciary Services, Education, Charities etc.