Keeping step with the pace of digital disruption

By TEC Speaker Simon Waller

You don’t have to look far to see the impact that digital disruption has had on our lives. Technology that was once central to our lives now belongs in a museum, replaced by new devices that are faster, smarter and more useful to us.

While technological development has always been happening, what we have seen in the last few years is the true impact of digital disruption. Now, business processes that used to be lodged firmly in the analogue world are finding their feet in a digital existence that looks very different to anything we have seen before.

For many CEOs, the challenge is now two-fold. Not only do they need to start embracing technology within every level of the business, they also need to become the leading proponents of technology and win over sceptical workers to these new opportunities.

The end of business as usual

One of my favourite quotes comes from Kevin Kelly, a founder of Wired Magazine, who said:

If we were sent back with a time machine, even 20 years, and reported to people what we have right now and describe what we were going to get in this device in our pocket – we’d have this free encyclopaedia, and we’d have street maps to most of the cities of the world, and we’d have box scores in real time and stock quotes and weather reports, PDFs for every manual in the world – we’d make this very, very, very long list of things that we would say we would have and we get on this device in our pocket, and then we would tell them that most of this content was free. You would simply be declared insane. They would say there is no economic model to make this.

The point here is the influence of technology appears in many ways, making it hard to predict the future. Digitisation has inevitably and irreversibly changed business organisations so that there are entire industry sectors offering free services, with diverse and creative ways to be profitable.

In just about every sector there are start-ups and innovators looking to challenge the way businesses are traditionally run. These upstarts are often able to thrive thanks to their reliance on technology and their willingness to push the envelope in ways that risk-averse organisations aren’t prepared to pursue.

Kevin Kelly was also quick to point out that over the next 20 years we are going to see even greater change – the kind that will make the last 20 years look like a snail’s pace by comparison.

This change has become so widespread that even attempting to predict the future is pointless – with the words likely to feel outdated as soon as they leave our mouths. So while we cannot stop this disruption from occurring, we still don’t know what form it will take or how it will occur.

Preparing for a world where technology underpins every business

Just as the future business world cannot be predicted, it is becoming clear that every job in the future will require some level of technical or IT knowledge.

The findings in the UK Digital Skills Taskforce, published in 2014. The study found that 90 per cent of jobs will require at least a basic understanding of digital technology, while 56 per cent require an intermediate to advanced skill set.

Many workforces simply don’t have this depth of expertise that they need in order to thrive in a digital future. Building these skills require comprehensive training efforts and upskilling programs to ensure existing staff can handle an increasingly digital workload.

This is also true at the C-Suite. Many senior executives will have come of age at a time when digital technology was still in its infancy and therefore may not be familiar with the latest developments that are changing work on the shop floor. CEOs that want to make the most of digital technology need to acknowledge the limitations of their own skills as well as those of their staff members.

Technology that is truly personal

If you look at the history of technology, among the biggest changes has been taking technology and making it personal and relevant to an individual.

Take computers as an example. The very first computers were solely the preserve of governments and very large businesses. Over time, mainframe computers became standard in businesses, before being replaced by the personal computing revolution.

Of course, the PC was never really personal – it still had to sit on a desk be plugged into a wall and even with the advent of the internet, the connection still came through the wall. It has only been with the growth of mobile computing that this technology can truly be called personal.

While the march towards truly personal technology is a great boon for individuals, these same changes need to be addressed at an organisational level. CEOs need to recognise that old patterns of procuring and using technology are still done through the lens of the organisation, rather than the individual user.

Scaling technology to a personal level also demands scaling business decisions and direction to that same level as well.

Business that is led by innovation

Every company sits on a scale – from those who are leading digital disruption to those who are actively trying to preserve an old technology in the face of change.

Historically, companies at the latter end of the scale were those that were seen as successful – they had a proven track record, a specific niche and were dependable. Innovative disrupters were the opposite; treated as highly risky undertakings working on the periphery of established processes.

Now, that relationship has been inverted. Protecting old industries is now seen as a dead-end, while the top end of the disruption scale is seen as the area where real growth is occurring. A shift in business thinking needs to occur so that companies focus on moving up that scale. That’s a change that cannot come soon enough – and it has to start with the C-Suite.

Expecting the unexpected

Being told there is no way to predict the future may come as anathema to CEOs that are used to market research and sales forecasts, but it’s a realisation that needs to happen. Every industry and sector is already playing catch-up with technology and trying to keep pace with the latest innovation, and this challenge is only going to grow from here.

While there’s no sure-fire way to succeed, there are some steps CEOs can start to take. Focusing on technology skills, both their own and those of their staff, is essential for building digital-first organisations. Likewise, understanding how personal technology and innovation are now shaping the business landscape are essential for informing future business planning.

In an unpredictable future, mastering these strategies will give businesses a chance to make the most of digital disruption, rather than becoming another disrupted organisation.

Is company culture holding back your organisation?

Company culture can be a difficult thing to quantify and measure, especially for an SME that is looking to become more innovative.

While CEOs and company leaders will play a major part in establishing and maintaining a strong internal culture, there are still issues which derail these initiatives.

This is especially challenging if it means that companies cannot remain competitive and stay ahead of the opposition. Innovation is just one area where company culture can play a major role in long-term success or failure.

This issue was recently explored in the Culturing Success report from Microsoft into how widespread innovation is within a small business and what is setting apart high-performers in this space. The research reported that nearly 70 per cent of SMEs in Australia are finding it difficult to become more innovative because of company culture.

According to the report, there are four cultural issues which are undermining the performance of Australian firms. These four are; working in silos, employee distrust, poor collaboration and a fear of failure.

The importance of innovation was underscored by Microsoft Australia’s Managing Director, Pip Marlow, who stated that “innovation is vital to the success of any business, no matter how big or small.”

“However, our research reveals that many businesses find it difficult to develop a culture of innovation.”

While there is clearly a lot of room for Australian companies to improve their processes, the report did highlight features that set highly innovative companies apart from the competition. The 33 per cent of firms that fell into this highly innovative category possessed five key features, including:

A strong customer focus
Awareness of and appetite for innovation
Visible and involved leaders, which in turn create engaged employees
Authentic internal dialogues
A supportive working environment

The result of implementing these processes is a considerable improvement in the performance of an organisation. According to the research, 39 per cent of high-performing firms reported above average growth, compared to less than a quarter of those who are poor innovators.

So how can companies achieve this new focus? The report suggested four strategies that companies can embrace to move closer to the example set by highly innovative organisations:

Attract new staff

The study emphasised that attracting the right staff is an important part of building an innovative business. By bringing in new perspectives, organisations will be able to create great ideas and subsequently see them through to completion.

The advantages of attracting the right staff go beyond boosting innovation, they can also play an important role in realising customer engagement.

Many Australian companies are already aware of the challenges that come alone with attracting and retaining valuable staff members. For fast-growing SMEs like Enablis, finding the right staff members has been the core challenge when trying to scale the business to handle further expansion.

Collaborate with external partners

Creative ideas and innovative solutions don’t just come from within a business – in many situations, creative ideas will actually come from tapping into the skill sets of other firms and working collaboratively.

Business collaboration is also becoming increasingly important across new technology, with collaboration over cloud technologies predicted to double over coming years, according to a study from Research and Markets.

Evaluate performance

Companies that are looking to become more innovative will need to have established and concrete processes to measure performance. Microsoft suggested organisations can audit themselves to understand exactly how well they are realising an innovation strategy at each stage.

One option that companies can use is the assessment tool provided by Microsoft. This quick test was designed to accompany the research and allows businesses to measure how innovative they really are. This sort of information can then be used to identify the areas an SME will need to work on if they want to move up the scale.

The benefits of this system were also highlighted by Pip Marlow, who emphasised the advantages of taking this assessment for small-business owners.

“Microsoft’s new self-assessment tool is the first of its kind to help small and medium-sized businesses identify their culture-related obstacles and then implement tangible solutions to become true innovation leaders,” stated Ms Marlow.

Build a flexible workplace

Staff will often perform better if they have the opportunity to get out from behind their desk and work in a way that best suits them. Not only can making this change ensure that staff are thinking creatively, it can also reduce the amount of stress they feel outside of work.

Solutions like working from home and employees choosing their own hours are easy ways for small businesses to introduce more flexibility, and thinking along these lines is a key ingredient in building an innovative company.

A flexible workplace can also involve introducing new processes to reduce the amount of time spent working on menial or repetitive tasks. For TEC member Alister Haigh, introducing ‘Baxter’ – a robot  designed to take over menial processes – has introduced a new level of flexibility into his family’s chocolate business.

Of course, none of these approaches alone is going to transform a business into an innovative organisation. But, by combining these different factors into a single coherent strategy, businesses will be well-placed to become a highly innovative firm that is also a leader in their industries.

For small businesses, building this sort of culture is going to require constant attention and maintenance. While this might sound daunting, the benefits for SMEs that can embrace this way of thinking are certainly going to be considerable.

How to boost productivity through better office design

When measuring the benefits of energy efficient building upgrades, many companies only consider the savings. While a reduction in costs may be considerable, there are far more business advantages to better design.

Some of the biggest organisations in the world are beginning to concentrate more on the layout and sustainability of their offices, including technology giant Google.

Anne Less, e-team innovation program manager at the firm, said the importance of eco-friendly measures in the workplace can’t be overstated.

“Energy efficiency is a huge focus for Google – both in our productivity and our operations – and we’ve found that it aligns with our goals for healthy workplaces,” she said in an interview with the Rocky Mountain Institute (RMI).

“There is a strong correlation between workplace satisfaction and temperature, and similarly with Googlers’ self-reported productivity.”

According to the RMI, Google makes decisions on office design throughout the entire real estate lifecycle, right from concept to construction and beyond.

The business also often weighs factors such as user experience and worker health alongside traditional issues such as cost and energy usage. As such, Google aims to create innovative plans that make the best use of natural light, are more sustainable and ensure staff aren’t exposed to harmful materials.

These measures mean Google now only uses half the US average for energy in its test building, with the company stating its hopes that other enterprises will begin to understand how such investments can bear fruit.

Going green in Australia

A new report by the World Green Building Council (WGBC) stated that staff costs typically account for approximately 90 per cent of operating expenditure for organisations.

This means that even a moderate improvement in productivity at the workforce level can have significant financial implications for employers. In Australia, businesses waste $7 billion a year on absenteeism and poor health.

Romilly Madew, chief executive of Green Building Council Australia, said the report – which her organisation sponsored – will help companies in the country appreciate the value of environmentally-friendly designs.

“Operating from sustainable office space is increasingly recognised as a strategic business decision that is not only environmentally and economically-sound, but can also enhance a company’s biggest asset and expense – its people,” she added.

Peter Hilderson, head of energy and sustainability services for the Asia-Pacific region at Jones Lang LaSalle, said there is a “sweet spot” where financials, people and buildings overlap. In other words, enterprises can achieve mutual benefits by creating office spaces that not only help their bottom line, but boost productivity among employees.

“Organisations that invest the time and apply the necessary rigour to implementing this framework will unlock the benefits of these inter-relationships and reap the rewards,” he stated.

Taking the next steps

The WGBC report outlined a number of areas where businesses can examine their existing building design and make improvements.

If your organisation is looking to upgrade to a more sustainable future, these changes could be a good place to start.

Air quality: Enhancing indoor air quality has been shown to improve productivity anywhere between 8 and 11 per cent. High ventilation rates and low concentrations of CO2 are important factors in achieving better air quality.

Active design and exercise: The health benefits of exercise should be encouraged, including access to gyms, bike storage and green space. The WGBC said people who cycle to work are much less likely to take sick days.

Lighting and nature: A growing body of research shows that green space and nature both have a positive impact on health, particularly mental wellbeing. Office layouts that prioritise access to windows and natural light, therefore, are tied to a boost in productivity.

Temperature: The WGBC said it is difficult to separate the benefits of air quality and room temperature, as they are often closely linked. However, providing staff with control over their thermal comfort is thought to produce productivity gains somewhere in the single figures.

Amenities and location: This is becoming an increasingly important part of modern offices, particularly in relation to childcare. Businesses that have provided these services on-site experienced a significant financial gain through reduced absenteeism.

Noise: Employees typically highlight loud office environments as a severe impediment to productivity in knowledge-based jobs. In fact, there can be a 66 per cent drop in performance due to distracting sounds, according to one study cited by the WGBC.

Interior layout: Recent research has suggested that creating a number of different task-oriented workspaces is the key to making workers more productive. This means providing separate areas where staff can socialise, brainstorm or work on their own.