For enterprises to succeed in the digital economy they need to become “digital innovation factories” within the next three- to five years, new research suggests.
This means creating and distributing digital products and services with digital-native speed and scale but to also produce software to meet growing customer needs, expectations and experiences.
Rialto Consultancy welcomes this call to action and is already working with a number of clients in this area.
According to International Data Corporation (IDC), software is becoming a “bigger piece” of how every enterprise competes in the digital economy and to guide organisations through this transition, it has published a Future of Digital Innovation framework.
Becoming a digital innovation factory means that while organisations will continue to consume software such as ERP, CRM, manufacturing, finance, human resources, procurement, and other enterprise applications, they will also shift their priorities toward producing software that is embedded in their products and services, to compete in their own industry.
Most of this digital innovation will be focused on creating new value for customers, noted IDC.
“We are now on the future path of digital innovation, where every company becomes a software producer,” Mickey North Rizza, programme vice president, enterprise applications and digital commerce at IDC.
When organisations understand they can completely change their operating model, creating more customer value and optimising their business for success, it completely shifts the strategy and dynamics of their business plan
“The organisations with digital innovation supply chains focused on delivering digital products, services, and experiences will reshape our global economy in the coming years.”
The transition from software consumer to software producer, or digital innovation factory, requires a solid and carefully thought out strategy and execution plan, along with strong skills and substantial agility in IT departments.
To build these capabilities, enterprises need a solid methodology. IDC’s digital innovation supply chain is made up of four equally important characteristic steps: plan; source; develop; and distribute.
Following the digital innovation supply chain enables a very high level of business transformation digitally, as demonstrated by companies that have already begun the journey.
When organisations understand they can completely change their operating model, creating more customer value and optimising their business for success, it completely shifts the strategy and dynamics of their business plan and future vision. But reaching this level of transformation will require a substantial commitment for most organisations, cautioned IDC.
Commenting on the framework, Rialto Consultancy director, Richard Chiumento, said it reinforces how all organisations must now see themselves as tech companies. “And it is imperative that this is recognised at CEO and senior levels if the right capabilities and culture are to be developed to support organisations in the digital age,” he added.
How do I imagine you reading this post? Feet up on your desk with a mug of coffee and two clear hours to absorb and ponder every word?
Of course not. You probably have at least three devices on the go right now. You’re checking your email, calendar and texts in between my sentences. You’re fighting pop ups, ads and colleagues’ interruptions whilst you get through my words.
There are a whole range of different priorities competing for your attention. My words must work harder than ever to rise above all the noise.
Old tools, new world
Today’s frenetic working environment means that effective communication has never been more challenging – or more important. And yet, most of us haven’t changed the way that we communicate in the past ten years.
We tend to fall back on communication techniques learnt at school, university or early on in our careers – well before our current toxic environment of ‘information overload’ set in.
This means that most of the tools we have at our disposal simply aren’t relevant or effective anymore. They don’t take into account how our audiences consume and react to information in today’s busy business world.
Evolving attention spans
Most experts have debunked the theory that attention spans have shrivelled to goldfish level (just 8 seconds). After all, most people are more than able to focus on things that they’re interested in (The New Yorker’s 10,000 word articles, for example, still attract a huge readership). But, whilst attention spans may not have shrunk, they have changed considerably in recent times.
According to Prezi’s 2018 State Of Attention Report, nearly half of respondents said they’re more selective about the content they consume now compared to the previous year. And it’s no surprise that they’re so choosy, given the avalanche of information that hurtles towards each one of us every day.
Because of our more discerning audience, we must now urgently adapt our communication style to better connect with our stakeholders and have more successful conversations.
The new rules of communication
We need brand new strategies to persuade, influence and inspire action if we want to succeed in our careers in today’s digital world.
We need to learn how to cut through information overload and communicate with impact. That means we have to:
- tailor our communication to a more discriminating audience
- learn how to overcome groaning inboxes to get our message heard
- communicate complex messages more clearly and effectively for all stakeholders
- speak and write in a way that engages and stimulates action in an environment of competing priorities
If you’d like to learn more about ‘The new rules of communication for the hyper-busy 4IR workplace’, call us to speak to one of our communication experts Kim Arnold or book onto our complementary leadership lunch on Friday 6th March. For more information and to book tickets for this interactive lunchtime leadership session, please click here.
The challenges faced by CEOs across the next year and coming decade will be many and varied. Entire industries and sectors are being disrupted by technology while political and societal changes are also coming into play. Any gathering of CEOs, however, is also likely to generate common discussion in areas such as the war for talent, innovation and reskilling. So what are the most pressing concerns for both CEOs and the C-suite?
Finding the right talent
As the Fourth Industrial Revolution gathers pace, new industries, sectors and roles will be created while others will be displaced and disrupted. Ensuring organisations have the right talent will be difficult but leaders must have robust strategies in place to deliver on this front. For in the age of automation and artificial intelligence, it will be people, not technology, that will be a key differentiator in areas like customer experience and innovation. While there is high demand for digital acumen soft skills must not be overlooked and will prove equally important.
Continual innovation
Securing the right talent will also help CEOs to crack one of the other big challenges they face: the ability to continually innovate. According to research and advisory services firm, Gartner, nearly 90 per cent of organisations have digital initiatives focused on improving current products and services while four-fifths have digital initiatives focused on creating new products and services.
The extent to which an organisation is successful at identifying new opportunities, determining which opportunities to pursue, and adjusting business processes to act on those opportunities, is described as their “innovation effectiveness”. Improving the innovative effectiveness of an organisation can increase annual revenue by as much as $8,800 per employee, Gartner claims.
Reskilling
Alongside recruitment and retention, CEOs face a huge challenge when it comes to reskilling and upskilling their existing employees. A report from the World Economic Forum (WEF) warns that 54 per cent of all employees will require significant reskilling and upskilling in the next three years. It is already something that weighs heavily on the minds of many CEOs with recent PwC research revealing that four-fifths of CEOs are extremely concerned about their workforce’s existing skills.
To meet the challenge, CEOs must work with C-suite directors from across their functions to identify as well as anticipate the skills that will be most required and ensure a culture of continuous learning is in place.
Building trust
The ongoing change that has taken place in the world of business in recent years and the era of digital transformation has proven unsettling for many workforces. Leaders need to ensure their people are aligned with the organisation and its strategies if they are to be successful. Which is why building trust will remain one of the biggest challenges for many CEOs. But they must work hard to achieve trustworthiness with honest and transparent behaviours and actions that make people want to follow them.
A force for good
Alongside these individual – though interlinked – challenges, leaders around the world also face a big picture test which involves rethinking role of business in society. This requires a different approach to leadership than in the past. Employees, customers and other stakeholders increasingly want businesses to embrace societal change. Fortune magazine reports that two-thirds of individuals in the US reckon a company’s “primary purpose” should be making the world better. And it isn’t just politicians that need to have climate action or infrastructure investment on their agendas but business leaders, too. This means leaders must be more philanthropic and altruistic and become involved in initiatives that position their personal and company brand as a force for good.
Win-win situation
This will have internal benefits too though and, ultimately, help leaders tackle all the above challenges. Top and diverse talent will want to work for the organisation and go the extra mile when it comes to performance and in areas such as innovation. It will also be easier to build trust in such a company. In short, it’s a win for business and society.
Rialto Consultancy wants to help CEOs and business leaders confront the challenges of the 21st Century as well as help them ensure they have the right pipeline of leadership talent for the future. Call us today on (0)20 3043 8640.
The Fourth Industrial Revolution (4IR) is blurring the lines between people and technology and is impacting on the way people work and the way businesses produce value, new research finds.
The study indicates business leaders and governments must adapt to these changes and support the workforce transition by developing new leadership capabilities alongside other people management strategies.
This key insight aligns with the thinking of Rialto Consultancy which has long called for a fresh leadership mindset as well as upgraded skillsets to meet the challenges of the Fourth Industrial Revolution and is committed to building these into its leadership programmes.
If managed well, the future of work may be one where many more people are able to fulfil their full potential, notes HR 4.0: Shaping People Strategies in the Fourth Industrial Revolution.
The study was conducted in partnership with the World Economic Forum, Saudi Aramco, Unilever and Willis Towers Watson.
HR 4.0 identifies six imperatives that business leaders, partnering with their human resources counterparts, will need to implement to successfully meet future challenges:
• Developing new leadership capabilities for the 4IR
• Managing the integration of technology in the workplace
• Enhancing the employee experience
• Building an agile and personalised learning culture
• Establishing metrics for valuing human capital
• Embedding inclusion and diversity
The study covers three sections. The first examines why the 4IR creates an impetus for transformation in people strategies and HR practices. The second outlines how business and HR leaders can respond through the six imperatives with practical models and case studies. The third describes how organisations are responding to the need for change with examples of emerging roles, technologies and critical skills for the future of HR.
If managed well, the future of work may be one where many more people are able to fulfil their full potential
“As the Fourth Industrial Revolution transforms work and the workforce, HR professionals must respond to proactively manage the future of work,” added Saadia Zahidi, managing director, World Economic Forum, and head of the Forum’s Centre for the New Economy and Society.
“HR leaders will increasingly need to develop skills and understanding of data analytics and technology, as well as supporting others to develop those skills to encourage employee experience and productivity.”
Commenting on the findings, Rialto Consultancy director Richard Chiumento welcomed the study as further evidence of the need for HR and business leaders to ensure they have skillsets that are fit for the future. “It is critical for their own career development and that of junior and upcoming managers and leaders in the organisation,” he said and continued: “These new leadership capabilities must be built into leadership development programmes so UK plc is putting in place solid foundations to effectively meet the challenges of the Fourth Industrial Revolution.”
The challenges that artificial intelligence (AI) poses for organisations and the workplace are highly complex. The answers to many of them lie in sharing knowledge, information, opinions, ideas and experiences to keep the discussion and our thinking moving forward in this fascinating area.
While attending a recent parliamentary evidence meeting on the enterprise adoption of AI, Richard Chiumento, director at Rialto Consultancy, underlined the importance of leaders taking on a greater role in reskilling and upskilling the workforce. He also highlighted how AI is already creating new jobs but more immediately the stark predictions are that it will destroy jobs faster than technology has in previous eras.
According to research, almost one third (30 per cent) of jobs in the UK and two-fifths (38 per cent) of jobs in the US are at risk of disappearing while 30 per cent of tasks in three-fifths of all jobs are at risk of being automated.
This will require reskilling of workforces on a global scale and Richard warned that the current mechanisms intended to facilitate this may not be able to absorb and respond to the changes quickly enough. He urged business leaders to place reskilling of employees at the top of their corporate agendas, stressing that it goes hand in glove with a digital transformation strategy, which will be key to businesses seizing competitive edge in the Fourth Industrial Revolution.
Business leaders must place the reskilling of employees at the top of their corporate agendas
Also contributing to the discussion was Dr Chris Brauer, director of innovation at the Institute of Management Studies (IMS) at Goldsmiths, University of London, who pointed out that “we shouldn’t be carried away with what AI could do, what matters is what AI should do”. He added that one quarter of businesses (24 per cent) have an AI strategy, double the number from 12 months ago. He also pointed out that those using AI are outperforming their peers by 11 per cent compared with five per cent the previous year.
Meanwhile, Justin Anderson, associate, digital strategy, KPMG reckoned that top-down policy on enterprise adoption of AI is leaving those in the middle “rather scared” of the transformation AI imposes. One of his key messages was organisations have to “empower middle management and engage them more”.
And PwC’s AI programme driver, Maria Axente, responding to the chair Lord Holme’s question, how can we effectively manage “dormant data” that already exists, stressed this was an important aspect moving forward, suggesting that decision-makers who are “educated about the possibilities of AI can make a big difference”. Having a data strategy and knowing where this sits, is pivotal.
Each of these comments are great openers for fascinating discussions that will help to shape how everyone successfully integrates AI in workplaces. Rialto looks forward to contributing to further discussions and helping our clients address challenges in areas such as leadership development, reskilling, upskilling and the next generation of digital transformation to ensure they are fully fit and ready for an integrated AI future.
Richard Chiumento is part of the permanent advisory board of the All-Party Parliamentary Group on AI. He participates in monthly evidence sessions at the House of Lords on how AI and automation is radically changing both what we do and how we do it in the workplace, which he actively shares with leaders in business.
Three quarters of UK organisations (76 per cent) admit to being uncertain whether they have an artificial intelligence (AI) strategy in place, a new study finds.
There is also a lack of understanding among UK business leaders about how to scale their use of AI and the report warns that UK organisations risk falling behind global competitors unless they act swiftly to accelerate their use of AI technology.
The report, released by Microsoft UK, reveals that organisations using AI are outperforming those that are not by 11.5 per cent. In the face of current unprecedented economic and political uncertainty, UK businesses can ill-afford to pass up this boost, notes Microsoft UK.
Despite this opportunity, the report, conducted in partnership with Goldsmiths, University of London, finds that less than a quarter of UK organisations (24 per cent) have an AI strategy in place.
Worryingly, three-quarters of the nation’s business leaders (74 per cent) doubt the country has the socio-economic structures in place to lead in AI on a global stage.
This puts in doubt the UK’s ability to compete with countries such as the US and China implementing AI at pace, on a greater scale.
In addition to the doubt that the UK is in a place to capitalise on the opportunities that AI presents, there is also a lack of understanding among UK business leaders about how to scale their use of AI effectively and ethically.
Such technologies are likely to bring deep-rooted and lasting change and there is an urgent need to share knowledge and best practice across all sectors
While two-fifths (38 per cent) want their organisation to be seen as leaders in AI innovation, just 34 per cent say they know how to evaluate the business benefits of their AI investments.
Similarly, only 21 per cent of UK leaders have completed AI training, while three-fifths (57 per cent) admit they don’t know how to intervene when AI takes the wrong course of action.
As well as stifling their own growth, this gap between intention and knowledge among leadership is making it increasingly difficult for UK organisations to gain a competitive edge over more AI-advanced rivals abroad.
“The results are clear. UK businesses and public sector organisations that forgo or delay implementing AI solutions risk missing the boat on driving down costs, increasing their competitive advantage and empowering their workers,” said Cindy Rose, CEO, Microsoft UK.
“Given this moment, where both UK leadership and competitiveness on the global stage is more vital than ever, there is no doubt that fully embracing AI-led digital transformation is a critical success factor for UK businesses, government and society.”
The report also uncovers a pressing need to focus on the cultural transformation required to fully harness AI’s potential.
Despite more than half of UK organisations (56 per cent) using the technology, 96 per cent of employees say they have never been consulted by their boss about its introduction.
The need for cultural change is further underlined by the direct correlation identified in the research between an organisation’s AI maturity and its ability to foster a collaborative, communicative and supportive environment required for staff to use the technology effectively and responsibly.
Commenting on the findings, Rialto director, Richard Chiumento, who sits on the All-Parliamentary Party Group on Artificial Intelligence, said it is clear that UK leaders need support and guidance when it comes to implementing an artificial intelligence strategy. “Such technologies are likely to bring deep-rooted and lasting change and there is an urgent need to share knowledge and best practice across all sectors.”
Half of IT leaders (49 per cent) report difficulties in achieving stakeholder agreement on important business initiatives, according to a new study that points to a ‘chasm’ between IT and business on how to advance the digital agenda.
The global research commissioned by Mendix reveals “disturbing disconnects” with companies of all sizes having trouble competing and disrupting due to a persistent shortage of software developers.
According to the Digital Disconnect: A Study of Business and IT Alignment in 2019 report, this has resulted in the rise of “shadow IT” when business teams pursue tech solutions on their own, independently of IT.
Four fifths of both sides (78 per cent) strongly agree that business efforts to “go it alone” or undertake projects in the realm of shadow IT – without official IT support or even knowledge – have greatly increased over the last five years.
Lack of alignment
The study indicates any alignment between business and IT fades quickly when the topic turns to budgeting and operational priorities. In the survey, half of IT professionals believe IT budgets are insufficient to deliver solutions at scale.
Conversely, seven in 10 of business respondents do not see any challenges with the level of funding provided.
This impasse is clearly reflected in the shared belief that a huge pipeline exists of unmet requests for IT solutions (77 per cent IT and 71 per cent business), requiring many months or even years for completion.
Nearly two-thirds of business stakeholders (61 per cent) report that less than half of their requests rise to the surface for IT implementation.
Difference in perceptions
The survey data highlights several nuanced differences in perceptions. For example, nearly all respondents (96 per cent) agree there is business impact when IT doesn’t deliver on solutions. But IT leaders feels that impact largely as frustration and loss of staff morale.
Business leaders, on the other hand, believe these delays lead to missed key strategic targets and revenue reductions, loss of competitive advantage, and other ROI impacts.
“While business and IT users agree on the urgent need to advance the enterprise’s digital agenda, they are worlds apart on how to eliminate the backlog and take proactive steps to develop critically important solutions at scale,” said Jon Scolamiero, manager, architecture and governance, Mendix.
“Business leaders say they want IT’s help in achieving strategic goals and ROI, but only a small percentage (32 per cent) grasp that current IT budgets are insufficient and inflexible. This disconnect is difficult for enterprises to surface, yet resolving it is a necessary first step in changing the calculus.”
The research, conducted by California-based Dimensional Research, surveyed more than 1,000 business and IT stakeholders in medium- and large companies in the US and Europe.
Commenting on the findings, Rialto director, Richard Chiumento, said that the disconnect is extremely concerning in this era of digital transformation as many departments are heavily reliant on IT to help them fulfil their strategic goals.
“Skills shortages may be at the root of the problem but strong and informed leadership is also required to step up to the plate and bridge the gap,” he said. “They must recognise the link between skills, technology and strategy and how crucial these elements are to the business in the digital economy. It’s not just about IT but far broader than that.”
Learnability has emerged as the most undervalued intangible skill in a new report that suggests the digital skills shortage is so great that the war for talent has become a ‘famine’.
Research from the Infosys Knowledge Institute looked at two perspectives on the barriers that prevent sufficient demand-supply match of talent – tangible and intangible barriers to talent transformation.
Infosys’ Talent Radar 2019 report is based on an online survey of more than 1,000 senior-level leaders of companies with revenue greater than $1bn.
Among the tangible barriers, respondents cited lack of budget as the biggest barrier to repurposing efforts, followed by organisational issues, lack of management awareness or support, and inadequate talent management plans.
Among the intangible barriers, learnability received short shrift in the Talent Radar research. But according to Infosys, this limits the “tremendous potential” of reskilling as a competitive advantage for companies that embrace learnability.
Undervaluing learnability limits the potential of other talent initiatives implemented by global enterprises.
Also highly sought after were candidates with strong soft skills led by teamwork (74 per cent of digital initiatives), leadership (70 per cent), and communication (68 per cent).
Nobody should underestimate the skills gaps and talent shortages that could exist and a culture of lifelong learning is one of the biggest defences to them both
For both hard and soft skills, the capabilities hardest to find and in greatest demand from respondents were analytics, communication, and adaptability.
The research found although nearly all large enterprises (95 per cent) are pursuing improvement initiatives, digitising the business is less about disruption and more about meeting focused objectives. These objectives included: a better understanding of customers and markets (46 per cent of respondents); customer experience (45 per cent); increasing productivity (40 per cent); and employee experience (35 per cent).
Digital initiatives require people with sophisticated technical skills and the ability to continually update those skills as cycles continue to shorten. The five skills in greatest demand for a career in tech are analytics (67 per cent of digital initiatives), user experience (67 per cent), automation (61 per cent), IT architecture (59 per cent) and artificial intelligence (58 per cent).
“There is not just a talent war – it’s a famine. To succeed, companies must hire, develop, and retain talent better than their competition,” said Pravin Rao, chief operating officer, Infosys.
“As enterprises progress in their digital journeys, the winners will be those who utilise multiple hiring sources and reskill workers in a culture of lifelong learning – invest in their people, who are the ultimate differentiator in a commoditised world.”
Commenting on the findings, Rialto director Richard Chiumento said that reskilling in this way is a win-win. “It helps to ensure both organisations and their people are fit for the future and the digital economy,” he said. “Nobody should underestimate the skills gaps and talent shortages that could exist and a culture of lifelong learning is one of the biggest defences to them both.”
Nine in 10 business leaders report their organisations are executing successfully in line with their digital transformation strategies, a new study finds.
Furthermore, 94 per cent of those surveyed feel their companies were aligned on what “digital transformation” means according to digital services and consultancy firm, Wipro Digital’s 2019 survey.
These findings are in stark contrast to Wipro Digital’s 2017 survey which highlighted a “leadership crisis” in digital transformation. Then, one in four executives noted that a key obstacle to success was lack of shared understanding about their definition of digital transformation.
For this survey, which was conducted by Coleman Parkes Research, 1,400 enterprise C-suite leaders around the world were polled about their company’s digital transformation programmes and barriers to their success.
The study found that digital transformations can seem overwhelming at first to organisations, with personnel issues cited as the biggest barriers.
However, organisations that properly manage people’s expectations, keep senior leaders aligned, and ensure they have the right partners working with them will see success, the report notes.
When asked about their biggest barriers to a transformation’s success, three-fifths of respondents (59 per cent) cited inconsistent sponsorship from senior leadership as one of their top five concerns.
It’s not too late to start a digital transformation programme, but the window of opportunity is closing
Meanwhile, nearly three fifths (56 per cent) selected not being able to train their existing teams to change or use new technology, methods or processes; and 54 per cent indicated needing better alignment with business stakeholders.
Notably, the study found that the longer a company has been undergoing a transformation journey, the less likely it is to experience people-related issues as a barrier to success whereas technology may become a bigger barrier.
Only one in seven executives with journeys less than two years cite technology as the biggest barrier, compared to one quarter (26 per cent) of executives whose journey has lasted two or more years.
“Leaders must align stakeholders and help their business units adapt to and leverage new technology, methods or processes. They need to hold fast and keep their company boards and C-suite informed and comfortable with disruption, new ways of working, and reorient their strategy as new insights and patterns are uncovered,” said Rajan Kohli, president, Wipro Digital.
“This will help senior leadership consistently commit to the necessary sponsorship. The pay-off will come. It’s not too late to start a digital transformation programme, but the window of opportunity is closing.”
In an age of increasing automation and artificial intelligence (AI), executives across the globe foresee a rapidly evolving operating landscape in the year ahead.
But new research from global consulting firm, AT Kearney, finds confidence is growing in the C-Suite that technology will help businesses navigate this increasingly complex and rapidly changing environment.
Despite the prevalence of technology and demand for technical skills in business, leaders are also recognising the “differentiating role” of non-technical and interpersonal skills such as creativity and leadership.
According to Maintaining the Human Connection in the Age of AI report, while these skills are not only difficult to find they are also expected to become even more important to business success.
This perceived scarcity of these skills suggests that demand to develop AI endowed with emotional intelligence could intensify, AT Kearney notes.
And executives’ growing emphasis on cultivating relationships with consumers and suppliers further indicates that personal interactions are more important than ever to commercial success.
In parallel, consumer preferences for local and sustainable goods and the rising importance of mayors and cities in an era of growing protectionism underpin broader global shifts away from traditional globalisation, the report reveals.
The survey findings point to a range of actions for business leaders to undertake. In the year ahead, executives will need to recalibrate their strategies for multi-localism, respond to changing consumer preferences, clearly define priorities in talent management, set realistic expectations for AI, and manage geopolitical risk.
Looking ahead to a time when AI may be endowed with emotional intelligence is absolutely fascinating but, in the meantime, we must make sure that we apply our uniquely human skills as expertly as we possible can
“Companies must adapt to the shifts in consumer preferences as well as those in the broader geopolitical and technological landscape,” said Courtney Rickert McCaffrey, manager of thought leadership for the Global Business Policy Council (a strategic service of AT Kearney), and co-author of the study.
“The most successful companies will set realistic expectations for new technologies in the short term while building a strong workforce that is capable of realising the full potential of these advances for years to come.”
Some 450 C-level executives and board members from around the world were quizzed for the survey. They were asked to assess what they see as the leading opportunities and challenges in the global business operating environment over the next 12 months.
Rialto director, Richard Chiumento, sits on the All-Parliamentary Party Group on Artificial Intelligence, which was set up with the aim of exploring the impact and implications of AI and leaders. Commenting on the report, he said it clearly demonstrates the importance of evolving leadership skills and capabilities and placing a premium on soft skills and areas such as creativity and innovation.
“Technologies such as AI may prove to be a leveller in some areas of the business initially so competitive advantage will come from those tasks and operations where it doesn’t yet excel,” he said. “Looking ahead to a time when AI may be endowed with emotional intelligence is absolutely fascinating but, in the meantime, we must make sure that we apply our uniquely human and personal skills as expertly as we possible can.”
