78% of executives believe they can no longer rely on their current M&A capabilities for digital deals.
One reason is that traditional M&A integration approaches can freeze innovation for up to three years.
An Agile approach enables incremental and continuous innovation to proceed during the M&A integration.
Examples in Utilities and Banking show how Agile M&A integration drives innovation to improve customer experiences and retention.
Avoiding the innovation deep freeze
Historically, the focus of many M&A deals has been on growing market share and cost advantages. For these types of deals, a traditional approach to M&A integration makes sense. Leaders start by planning and determining the integration milestones they’ll need to reach. They then move through the integration process by following a sequential set of activities. The steps are stage-gated and predetermined.
Many M&A deals today, however, are about more than gaining scale or cost savings. They’re equally about securing new capabilities and innovations to create new customer experiences, drive new behaviors and grow revenues. For such deals, a traditional approach may not be the best choice. Why? Because it tends to push innovation to the bottom of the priority list. Considering that most large transactions can take 12-36 months to complete, a business risk having no—or severely reduced—innovation for an extended period while competitors surge ahead. Ironically, companies looking to acquire or merge with another to gain an innovation edge might inadvertently be killing it.
M&A: Modern & Agile
An Agile M&A integration approach enables incremental and continuous innovation to proceed during the integration. It’s flexible and highly iterative. Activities are tackled in short sprints, each focused on immediate priorities and requirements. It’s also highly collaborative. Fast decision making is one of its most important characteristics.
Agile approaches in M&A are well suited to projects involving the integration of technical solutions or activities focused on building revenue synergies with new customer-facing processes, systems and algorithms. They should augment rather than replace traditional approaches that are still best for instilling discipline and consistency in the integration of certain functional areas such as finance or compliance.
>50%
of acquisitions were related to gaining new, digital capabilities for those companies most active in M&A.
78%
of executives believe they can no longer rely on their current M&A capabilities for digital deals.
A catalyst for lasting change
A hybrid M&A integration approach, which draws on the best features of Agile, changes the integration game. It allows companies to focus on efficiency gains and new business opportunities. It helps companies manage risk—both reputational and executional—by giving teams the tools to focus on different aspects of the deal with different methods. Thanks to the highly collaborative nature of Agile, the new approach also ensures a better cultural fit between different entities. Perhaps most importantly, it allows the merged organization to sustain—if not accelerate—its innovation agenda and maintain market relevance.
Utilities: (Em)powering the people
In disparate industries – from Banking to Utilities – companies exhibit how Agile M&A integration approaches can drive innovations resulting in improved customer experiences and retention during the integration phase of the deal. Two European utilities recently used Agile approaches to carry out critical post-M&A integration activities aimed at customer retention. The approach ensured innovation remained front-and-center during the integration and reduced risks by identifying issues early on. People felt heard and valued in the new, to-be organization. And the merged entities’ churn rates beat expectations. The company is already planning to use Agile approaches again during future M&A integrations.
Pressing the Agile accelerator
Companies can take three broad actions to maintain their innovation edge during—and after—M&A integration.
1. Determine where Agile is appropriate
Certain aspects of integration need traditional approaches. Identify where an Agile integration approach makes sense assessing the ultimate business impact of using Agile and workforce readiness.
2. Hone Agile capabilities over time
Introduce new practices gradually. Train the uninitiated and expose them to Agile teams. As the integration progresses, add new Agile work sets to maximize impact and keep innovation moving forward.
3. Embed Agile in the organization’s culture
Agile practices must be directed from the top—from leaders who exhibit whole-brain leadership characteristics. Leaders must ensure that governance, training, metrics and accountabilities are Agile.
*We are here to help you navigate so schedule a call to discuss your specific business goals
A couple of weeks ago we lost Professor Clay Christensen of HBS, an exceptional management scholar and teacher. Christensen was best known for his groundbreaking work on how traditional industries are disrupted by innovation. For example, Apple’s iPhone (“a computer in your pocket”), Google’s search capability, Facebook’s advertising platform, and Tesla’s electric cars have all transformed traditional industries.
One of Christensen’s more influential writings, though less well-known to the general public, took direct aim at consulting. He and his co-authors made the case that management consulting would divide into a few firms that earned high fees for creating real strategic value for their clients, and many firms that would play an increasingly tactical and implementational role, and for whom fees would remain under pressure by new forms of competition.
That new competition is the freelance revolution. New talent marketplaces like BTG, the Business Talent Group, offer expert independent management consultants with the specific experience that large firms need, and increasingly sophisticated client companies demand. And, the impact on traditional consulting firms has been increasingly noticeable. The best known firms are not just taking greater notice; this is a competition where the clients of BTG, and similar firms like Catalant, Flexing It, Outsized, Weem, and Expert360, typically include both large corporates and big consulting.
This past month BTG published its 2020 High-End Independent Talent Report describing the areas where freelance management consulting expertise and freelance interim executive roles are most in demand. As BTG’s Marketing VP Jennifer Napier pointed out in a recent conversation, “It’s very clear that executive interest in independent management consulting continues to grow across industries and an increasing range of functional areas.” Here are the highlights of that report.
Top 10 Industries: Areas like corporate services, healthcare and private equity and venture funding have doubled their use of freelance management consultants in the past year:
· Life Science
· Financial Services
· Consumer Goods
· Technology
· Services (B2B and B2C)
· Private Equity and Venture Capital
· Industrial Goods and Services
· Healthcare
· Insurance
· Retail
Top 10 functional clients: Several functional areas increased their use of freelance management consultants. The top 10 areas are:
· Strategy and Internal Consulting Groups
· Marketing
· Operations
· Human Resources
· Business and Corporate Development
· Procurement
· CEOs and Presidents (interim leadership roles)
· Digital and Tech
· General Managers and P&L Leaders (interim leadership roles)
· Innovation and R&D
Buyers: A majority now of buyers of freelance management consulting services are at the executive level. This continues the evolution of executive interest in alternatives to the traditional consultancies.
· C level ~ 20%
· VP ~ 40%
· Director and Below ~ 40%
Work emphasis: Strategy development and operational improvement are far and away the largest areas of freelance management consulting. While the percentages vary somewhat from industry to industry, the overall trends are as follows:
· Strategy Development and Planning ~ 40%
· Operations ~ 30%
· Transformation ~ 10-20%
· Organization Design and Analysis ~ 5-10%
· Interim Executive Roles ~ 5-10%
Most in-demand projects: The most in-demand consulting gigs follow work emphases described above; marketing and sales strategy is #1, and business process improvement is a close # 2.
· 11% Marketing and Sales Strategy
· 11% Business Processes
· 8% Opportunity Assessment
· 8% Planning
· 7% Interim Executive
· 7% Business Intelligence and Analytics
· 7% Growth Strategy
· 7% Product Strategy and Launch
Most in demand skills: Project management (including PMO) and strategic analysis and planning expertise are among the most in-demand skills.
· 14% Project Management
· 7% Market Analysis
· 5% Process Optimization and Transformation
· 4% Advanced Analytics
· 4% Change Management
· 3% Program Management Office (PMO)
· 3% Growth Strategy
· 3% Strategic Planning
Interim leadership gigs: Freelance management consultants or freelance executives providing interim leadership is a growth area in freelance consulting. Here are the positions for which interims were most sought.
· CFO 50%
· CEO 13%
· CTO or CIO 12%
· CMO 10%
· CHRO 6%
· Other roles 9%
Examples of current or recent interim leadership roles:
• An interim CTO with startup experience to help strategize and design a new piece of software
• An interim-to-hire CFO to lead the finance function of a private equity firm’s portfolio company
• An interim CHRO to develop and implement new processes, during a departmental restructuring
• An interim Head of Corporate Affairs to build a reputational risk strategy
• A senior leader to lead licensing and M&A arrangements during the company’s acquisition
Work locations: Unlike tech freelancing, where remote work arrangements are typical, freelance management consulting marches to a different beat: in-person interactions still matter to most F1000 companies—with only 17% of executives interested in remote-only work arrangements for high-end talent.
• 83% Mix of on-site and remote
• 17% remote only
Different industries, variations in remote only work: PE/VC, Consumer, and Industrial were most open to remote work arrangements.
· 11% Life Science
· 13% Financial Services
· 29% Consumer Goods
· 18% Technology
· 11% Services (B2B and B2C)
· 37% Private Equity and Venture Capital
· 27% Industrial Goods and Services
· 16% Healthcare
· 6% Insurance
· 4% Retail
The bigger picture
As usual, BTG has put together a thoughtful and informative update on the progress of freelance management consulting and freelance interim executive roles. Their summary of overall findings is as follows:
“Notable trends in BTG’s 2020 report include the rise in process-related projects as companies seek to transform management and operations to grapple with radical shifts in the business landscape, increased reliance on high-end independent talent for advanced analytics skills that are difficult to source in the full-time market, and project management’s continued streak as the #1 skill most requested across industries.”
My overview describes the main findings but there is a good deal more insight to be gained from reviewing the larger BTG report. It provides not just additional stats but helpful industry specific analyses and illustrative projects. The report is an excellent source of information on the freelance management consulting sector within the larger freelance revolution.
*We are here to help you navigate so schedule a call to discuss your specific business goals
The social, economic and environmental challenges of the 2020s require new approaches to leadership and responsibility.
As organizations put sustainability and equitability at the heart of their organizations, they will need a broader range of leadership skills and attributes.
An ability to master Mission & Purpose, Technology & Innovation and Stakeholder Inclusion must become second nature.
We reveal the Five Elements of Responsible Leadership that high performing organizations display.
The decade to deliver
As we enter a new decade, businesses and organizations are facing a range of challenges that are forcing them to redefine responsible leadership:
Climate change: 65% of CEOs agree that they need to decouple economic growth from the use of natural resources.
Global economic fragility: 87% of CEOs believe that global and economic systems need to refocus on equitable growth.
The Fourth Industrial Revolution: New technologies have to be managed for both their potential promise and their peril.
The risk of leaving people behind in the workplace: Investment in emerging technologies doubled 2017-2019, but only 18% of organizations planned to significantly increase spending to reskill their people in the next three years.
These issues are encouraging a wider range of stakeholders to raise their voice and to influence decision makers. Leaders are beginning to acknowledge the need for change.
72% of CEOs say citizen trust will be critical to their competitiveness in the next five years.
61% of emerging leaders (the World Economic Forum’s Young Global Leaders and Global Shapers) say that business models should only be pursued if they generate profitable growth and improve societal outcomes at the same time.”Organizations have the opportunity and the obligation to drive growth in tandem with positive social and environmental outcomes. This starts with redefining what it means to lead responsibly. A new generation is leading the way, focused on driving value while honoring values.”
— Monika Wood, MBA, Founder/Principal – MW Consulting, Inc.
Combining responsibility with innovation results in better performance
We examined 2,540 publicly listed companies between 2015 and 2018, indexing them according to their sustainability & trust levels, their innovation and their financial performance. Companies that combine high levels of innovation, on one hand, and sustainability & trust, on the other, outperform their industry peers, with 3.1% higher operating profits and greater returns to shareholders. Companies that excel at innovating alone, without achieving sufficient levels of sustainability & trust, see a negligible impact on operating performance (see below).
A new model of responsible leadership is required
Today’s leaders need to deliver value on three fronts: organizational performance, measured most often by short-term earnings; continuous innovation, the seedbed for longer-term growth, often propelled by emerging technology; and sustainability & trust, earned by attending to the interests of stakeholders.
What leadership attributes are required to achieve all three objectives? We asked approximately 2,000 business leaders and 3,000 stakeholders. We also asked more than 1,800 emerging leaders in the World Economic Forum’s Young Global Leaders and Global Shapers communities.
The five elements model of responsible leadership
Stakeholder Inclusion: Safeguarding trust and positive impact for all by standing in the shoes of stakeholders when making decisions, and fostering an inclusive environment where diverse individuals have a voice and feel they belong.
Emotion & Intuition: Unlocking commitment and creativity by being truly human, showing compassion, humility and openness.
Mission & Purpose: Advancing common goals by inspiring a shared vision of sustainable prosperity for the organization and its stakeholders.
Technology & Innovation: Creating new organizational and societal value by innovating responsibly with emerging technology.
Intellect & Insight: Finding ever-improving paths to success by embracing continuous learning and knowledge exchange.
Company executives and stakeholders value different leadership qualities
Company executives recognize that leaders of responsible businesses need to exhibit all Five Elements. They place strong emphasis on Technology & Innovation (Te). But companies’ stakeholders see things differently. Consumers, employees and others have a far greater interest in leaders with highly developed Mission & Purpose (Mi) and Emotion & Intuition (Em). This suggests that organizations may find it hard to meet the expectations of wider society unless they modify their leadership qualities and seek a stronger and more balanced Five Elements profile.”This is the decade to deliver. A new model of responsible leadership can help address the world’s most pressing problems in ways that unleash new waves of growth that are more sustainable and equitable.”
— PETER LACY, Senior Managing Director – Accenture Strategy, Europe, UK & Ireland and Accenture World Economic Forum Lead
Making responsible leadership a reality
Responsible leadership becomes real when it learns from and ultimately reflects those it serves. Getting started means addressing head-on some potentially uncomfortable questions. We suggest three:
Who are your stakeholders and how well do you really know them?
Do they include non-traditional and diverse interests? How important is each group of stakeholders to your organization? Do you understand the negative and positive consequences of your organization’s actions?
Is your leadership team on course to have a balanced Five Elements profile?
In discussions, does the Five Elements profile resonate with your leadership team? Do you draw upon these attributes, skills and mindsets when making strategic decisions? Are the Five Elements present in how you grow and build your future leadership teams?
What do you need to accelerate and scale responsible leadership qualities throughout your organization?
What barriers exist? What opportunities and burning platforms can accelerate progress? Are there particular tools, support, or types of collaboration that can spur progress at an individual, organizational and ecosystem level?
*We are here to help you navigate so schedule a call to discuss your specific business goals
Investments in innovation are expected to increase 1.8X in the next five years.
However, companies are neither allocating innovation investments strategically nor managing these investments with discipline.
Companies that govern innovation extensively over time expect stronger revenue growth.
Many companies assume that innovation and growth come hand in hand — that creative, new ideas will spark more business and provide a better way to run a company. But how do you turn those ideas into commercial reality?
The answer isn’t adding more to the innovation budget, according to our survey of 1,090 executives across 11 industries. The answer is to allow innovation to thrive in the right businesses. Companies should allocate innovation investments based on their businesses’ future potential — not on today’s needs — and apply governance to extract value from those investments.
Research reveals that increased governance can create the right conditions for innovation to thrive in the right businesses. We call this Portfolio Innovation: the application of incremental and non-incremental (breakthrough or disruptive) innovation across businesses with different maturity levels.
Portfolio Innovation
Disruptive innovation Enables an entirely new offering to address an unmet need
BUSINESS MATURITY TYPES
Emerging businesses The most nascent ventures; new business models, yet to be scaled
Growth businesses Experiences strong market demand; based on differentiated offerings
Legacy businesses The oldest, most mature, businesses; provide steady cashflows
Rethink your innovation investment strategy
Leaders need a structured way to direct their innovation investments. Chief strategy and chief innovation officers need to first determine their desired business portfolio composition for the future, discern what type of innovation each business needs, and set their investment strategy accordingly.
We identified two portfolio models from which two innovation investment strategies emerge:
Innovation for Longevity Mature portfolio companies funnel the majority of innovation investments to their legacy businesses.
Innovation for Balance Companies funnel innovation investments across their portfolio—legacy, growth and emerging businesses—in a relatively even manner.
Two portfolio models, two investment strategies
MATURE PORTFOLIO
Companies that generate 50% or more of their revenues from legacy businesses today
INVESTMENT STRATEGY: LONGEVITY
Majority of innovation investments flow to legacy businesses
14%24%62%
BALANCED PORTFOLIO
Companies that generate more than 50% of their revenues from growth and emerging businesses today
INVESTMENT STRATEGY: BALANCE
Majority of innovation investments flow to growth and emerging businesses
Emerging businesses
Get ready to govern innovation more
So what distinguishes companies that achieve growth from innovation and those that don’t? One factor is implementing more disciplined governance.
We identified 12 key governance rituals companies are practicing to effectively govern innovation.
Governance rituals enable innovation
Inspiration
Put innovation at the center of corporate strategy
Actively communicate the innovation agenda to employees and the investor community
Actively build a culture of innovation
Ideation
Everyone generates ideas to improve existing offerings
A diverse team of experts generates ideas for brand new offerings
Identify disruptive ideas with the help of tech partners
Experimentation
Experimentation investments are made as part of the budgeting lifecycle
Experimentation investments are funded gradually
Experiments are conducted by an innovation lab/digital factory
Scaling
Scale with technology partners
Scale with talent partners
Scale through an innovation lab/digital factory
More is more
Companies that govern innovation extensively delivered 2x revenue growth compared to those following a haphazard approach
We found that the 12% of companies that already adopt six or more rituals are achieving double the revenue growth of companies using fewer rituals.
In fact, when companies that aren’t governing innovation as extensively increase to six or more rituals, they expect to see their revenue growth catch up to those currently in the lead.
REVENUE GROWTH AND COMMITMENT TO INNOVATION GOVERNANCE Revenue Trajectory (Past: 2013-2018 and Future: 2019 to 2023 Estimated)
5.9% CAGR2.9% CAGR7.2% CAGRRevenue trajectory of companies adopting extensive innovation governance (past and future)6.5% CAGRRevenue trajectory of companies switching from selective innovation governance (past) to extensive innovation governance (future)
Blend well for best results
It takes the right mix of innovation and governance
Some people fear that governance will stifle innovation. But in reality a systematic approach to managing innovation is key to greater financial impact.
When leaders align their future innovation investment strategy to the desired portfolio mix, they gain the power to turn innovation into a real advantage.
Are you ready to govern more to grow?
*We are here to help you navigate so schedule a call to discuss your specific business goals
Organizations underestimate the complexity of capturing and maintaining quality data as well as its potential to improve decision making.
CFOs view data as their most critical tool, yet many finance leaders do not believe they have the right to play in the analytics space.
When CFOs get involved in the analytics agenda, they can change the conversation around key decisions and provide differentiated value.
It all starts with CFOs focusing their efforts on solving a key business problem. They partner across functions and business lines to define success, and then to test an initial hypothesis.
In what we call “strategic scaling” the CFO works with advanced analytics and data teams to solve bigger problems. Analytics pilots rapidly source and model live data and compare results against success criteria.
When CFOs follow this approach to provide actionable insights, their organizations realize exponential benefits, with a greater than 10x return on investment. Early adopters are harnessing the data available to deliver value to their organizations.
Taking on analytics
81% of CFOs are focused on identifying and targeting new areas of value across the enterprise and using technology to do it.
75% of CFOs in our research say they alone are the logical choice to become the ultimate authority of the organization’s data.
76% of CFOs believe finance is better than other functions at combining different data sets.
Critical success factors
We have identified five factors that are critical to CFOs’ success in taking on analytics initiatives:
Building consensus. The CFO should understand the perspectives of the different groups involved, what outcomes they desire and how they measure success.
Getting the data right. The CFO can partner with the IT organization to map the current state of data and the data pipeline, and to chart the investments required to meet objectives.
Developing the necessary talent. The CFO takes the lead in talent development, ensuring current team members have the skills needed to become comfortable with planning and advising rather than recording and reporting.
Innovating to build capability. Successful CFOs use different methods of creating needed capability, including partnering with external providers of platforms, data and services.
Winning early and often. We have seen CFOs post early wins by delivering insights and showcasing value to be captured. This gains the trust of business partners, increases credibility and supports rapid scaling of successful pilots across the enterprise.
“When applied to the right business problem, finance-led analytics can unlock significant value for the enterprise.”
— MONIKA WOOD, Founder & Sr. Principal – MW Consulting, Inc.
*We are here to help you navigate so schedule a call to discuss your specific business goals
Recent MW Consulting, Inc. research shows that Chief Supply Chain Officers (CSCOs) are pioneering digitally enabled solutions, moving beyond efficiency to help drive customer centricity and growth. But even as they press forward with innovation, over 50 percent identify lack of change-ready culture as their biggest impediment.
To reach the customer centricity and growth success CSCOs will need to drive new levels of collaboration and productivity in their teams, reinventing their workforce, reimagining how humans and machines work together, and elevate their people.
We see two main actions that will help:
Empower people: Automation and new-skilling
Collaborate from the outside in
Leaders and laggards
Our survey of 1,350 executives showed that:
Leading companies have scaled more than 50 percent of their digital initiatives (proofs of concepts) and earned a return on digital investments greater than the average industry return on digital capital and return on digital investments.
Laggards are companies who have earned a return on digital investments less than the average industry return on digital on scaling more or less than half of digital proof of concepts.
Empowering people
Leaders have embraced automation, using it to free their human workforce from repetitive tasks, and are significantly more enthusiastic about investing in automation at scale—skilling their people for the digital world. The dual investment unlocks greater value than either could alone.
However, not all new aspects of digital supply chains can be addressed by reskilling. CSCOs will need to hire specialists, including analysts, value chain architects and orchestrators, amongst others.
Leaders are significantly more enthusiastic about investing in automation at scale and skilling their people for the digital world.
Fresh talent for new ways of working
Organizations that sustain the benefits of change tend to do three things well:
Build an infrastructure for change
Hardwire the change, systematically
Invest in the change capability
Combining their workforce’s resources with the best their ecosystems have to offer, leading CSCOs are reinventing the modern supply chain. No longer simply an efficiency engine, they are earning their seat at the C-suite table by becoming a key force for growth.
Human + machine for agile manufacturing
Bosch Rexroth introduced agile manufacturing in more than 100 factories. Single-arm robots serve as automatic production assistants, managing complex tasks like assembly and welding. The robots are also highly reconfigurable. When product demands on its Homburg factory changed, the existing line was modified over a single weekend.
While automating, the company also is working to enable flexibility and adaptability for its human employees. “ActiveAssist” workstations feature cameras, projectors and touch screens to display context-relevant information for each employee. The workstations provide specific instructions, visual cues and error correction during the assembly process of an individual part.
*We are here to help you navigate so schedule a call to discuss your specific business goals
Digital changes all aspects of business. Organizational culture is no exception. What does that look like?
Companies are focusing on digital transformation to the sum of US$1.2 trillion globally, but can overlook the culture change needed for success.
Digital technologies can change the worker experience for better or for worse, depending on choices C-suite leaders make as they transform.
Digital brings new needs for workers, such as digital wellness, but also changes traditional needs like transparency and trust.
Digital changes the worker experience for better or for worse. You choose.
As the post-digital era begins, new technologies are defining workplace experiences across industries. Companies around the world are focusing on digital transformation to the sum of US$1.2 trillion globally, but many are overlooking the culture change necessary for success.
While leaders acknowledge these technologies benefit their bottom line, more importantly, they recognize these gains are only sustainable if their organization’s culture adapts and embraces new ways of working.
Organizations are moving beyond the transactional 20th-century model of employment to a post-digital one where their workers move from the traditional definition of “employees” to a team of co-creators who are partners in purpose.
Leading companies are finding the enlightened sweet spot where what’s good for the post-digital business is deliberately designed to be good for their workforce. In the process, they are deliberately addressing the new worker needs digital brings, as well as the traditional needs it changes.
Crafting a culture that fits the era, C-suites realize supporting workers’ needs is not just the right thing to do, it’s essential for real competitive advantage—as well as for attracting and retaining high-value workers. Companies optimize their chances of successful outcomes when they consider the interplay between technology and culture as they create a strategy for growth and innovation.Leading companies are finding the enlightened sweet spot where what’s good for the post-digital business is deliberately designed to be good for their workforce.
Digital creates new worker needs and challenges. The good news: Digital also can solve some of them.
Digital wellness
In a world where mobile devices allow always-on connections, the boundaries between work time and personal time have eroded. Workers’ personal domains—family, social time, time alone—are being impinged upon by constant work.
As physical boundaries disappear, companies risk work culture becoming 24/7. Workers are having to put up psychological boundaries to protect their well-being, to keep company demands from becoming all-consuming. Those boundaries are not consistently being respected. Studies abound showing people regularly check work e-mails at the dinner table, as well as in bed.
Worker benefits
The pervasive adoption of digital technologies and broadband internet allows for more workers, in more types of roles, to switch employers with the same ease that they switch service providers as consumers. More and more workers are in alternative work arrangements, versus traditional employee relationships. Cultures need to accommodate for this, moving from a design that favors only traditional full-time employees.
Recognizing the fluid nature of work and careers in the post-digital economy, companies and governments are considering a benefits safety net. Several U.S. states—California, New Jersey, New York and Washington among them—have also introduced portable benefits legislation. In the European Parliament, legislation introduces more predictable hours and compensation for cancelled work, applying to vulnerable workers on non-traditional contracts and in non-standard jobs.
Safety that spans worlds
Traditionally, workers have required a safe physical environment. But, in the post-digital world, they also need a safe cyber environment. As the physical and digital worlds merge, employees will exist more often in an extended reality (XR) where the two worlds converge at work.
Industries are heading into XR at varying speeds, but all show a quickening pace. It’s important that companies begin to put well-being and safety at the center of their design for any technology service or product, as well as at the heart of their operations and culture.
Companies around the world are focusing on digital transformation to the sum of US$1.2 trillion globally, but many are overlooking the culture change necessary for success.
Traditional worker needs with a digital twist
Digital doesn’t just create new worker needs. It also spurs an urgency around some traditional worker needs, like transparency, relevance and inclusivity.
Transparency and trust
With digital analytics, companies can not only better gauge how on board their people are, they can also see more clearly how work is being done. From which teams to assemble for top-notch innovation to how to better support workers for better outcomes, leaders are afforded a window into what makes their company tick.
In the most advanced companies, culture supports workers helping to shape a strategy, rather than just being participants in making it a reality. This radical level of transparency ensures they are not passive recipients of something handed down from “on high” and instead, feel ownership of where the company is headed and their part in helping it get there.
Relevance
From workers to executives, companies will need to create a culture that embraces “new skilling,” helping workers learn the competencies that will take them into a post-digital future.
Beyond any one competency, companies will need to partner with governments, educational institutions and workers themselves to better enable lifelong learning—a must in a new world where business changes quickly. Middle-skill workers—those who have more than a high school diploma but less than a university degree—are at a particularly high risk for displacement. Globally, we’re seeing a hollowing out of middle-skill jobs already.
Inclusivity
From accessibility to working styles, cultural preferences to avoidance of stereotypical norms, workers who feel respected are able to commit more fully to delivering value. As companies serve an increasingly diverse consumer base, their employees need to reflect that consumer base. Studies show that companies with policies that encourage the retention and promotion of diverse workers across race, sexual orientation, and gender, are more innovative and release more products.
Digital technologies allow formerly disenfranchised groups of workers to do things and contribute in a way not previously possible. More than one billion people need assistive products to be independent and productive, but only one in 10 have access. Adults with disabilities have twice the unemployment rate of those without, but technology—and enlightened leaders—can change this situation.
Only one out of 10 disabled people have access to assistive products.
Transforming your organizational culture for the times
Post-digital culture change is so fundamental that it’s not just doing. It’s becoming. Leaders will need to throw away the old scorecards and performance metrics, redefining the way they lead and what they hold their teams accountable for daily.
As you think about how to align culture to the times, a few first steps will point you in the right direction:
Throw out your understanding of workplace experiences. Businesses looking ahead to the post-digital age see technologies ranging from AI to XR that will fundamentally change the way work is performed. In response to these changes, leading businesses are rethinking everything that goes into the creation of a digitally equipped workforce and what it will take to help that workforce thrive.
Embrace changing perspectives on the nature of work. Technology will only become more integrated in the workplace, giving rise to new needs that could impact a workforce’s ability to succeed. Businesses that embrace changing workforce needs today can use this transformation effort to prepare themselves for change tomorrow.
Empower passionate leaders who want to address new worker needs. Cultural transformations are impactful if they emerge from within an existing workforce. Individuals who can balance an understanding of emerging workforce needs with ongoing business challenges are well-positioned to chart successful transformation strategies. Bring these voices to the table when you evaluate emerging stakeholder and workforce needs.
As digital technologies become more prevalent in the workplace, keep your desired end state in mind. What is your company becoming? How are digital technologies shaping that? And is the impact on your workforce for better or for worse? In the more enlightened era of work we are all moving into, leaders are designing for the better.
*We are here to help you navigate so schedule a call to discuss your specific business goals
In the age of automation, organizations must understand the blueprint of their current workforce in order to build future-ready teams.
In light of this, strategic workforce planning helps enterprises understand their workforce dynamics and evolve to meet their long-term needs.
Backed by learning analytics, organizations are now much better placed to reskill their workforce for the future.
Approximately half of all jobs will be materially impacted by automation in the next 15-20 years, according to the OCED Employment Outlook 2019: The Future of Work. What’s more, recent Accenture research finds that 79 percent of executives agree that work is shifting from roles to projects—challenging both the function and makeup of the workforce as we know it.
Several other trends are also contributing to this radically shifting workforce landscape.
The gig economy is growing in popularity. As more and more employees look for different opportunities, many are not choosing permanent jobs. In 2018 alone, 56.7 million Americans freelanced, and it is predicted that by 2027, the majority of America’s workers will be freelance. Those choosing part-time work or even working for multiple employers at one time will need to be factored into evolving workforce models.
Advances in digital and automation have allowed organizations to gain efficiency and increase productivity. But adopting these technologies means that organizations must plan for their workforce—especially those at risk of being made redundant.
In addition, as many as 40 percent of companies are already reporting that talent shortages are impacting their ability to adapt and innovate. This all serves to highlight the need for organizations to upskill, reskill and cross-skill existing workers.
Apart from people, machines are also becoming a highly important part of the workforce, driving the need for companies to consider their future talent pool and the skills they will need to leverage. In this context, it is unsurprising that many organizations are making the move toward a more dynamic workforce set up.
Enter strategic workforce planning. Advances in digital and automation have allowed organizations to gain efficiency and increase productivity. But adopting these technologies means that organizations must plan for their workforce—especially those at risk of being made redundant.
A new approach to workforce planning
While strategic workforce planning (SWFP) isn’t new, it is more important than ever for organizations to identify their optimal workforce mix and tailor their investment to suit.
In particular, SWFP helps organizations strike the right balance between external contractors and internal workforce, as well as the right blend of human and machine effort to drive the business forward.
SWFP helps to serve as a key foundation for ensuring organizations are future-ready by taking into account growth requirements and helping to initiate the journey of workforce DNA transformation.
By providing a holistic perspective of the current workforce, and existing as well as future gaps, workforce planning can help organizations assess forthcoming risks and identify quick wins to yield potential savings. This enables organizations to strategize their recruitment and reskilling plans well in advance, as well as ascertain the most advantageous size and workforce mix of the organization both in the short and long term.
For example, using HR transformation analytics, organizations are turning recruitment from what was traditionally often a process based on “gut-feel,” to one informed and backed by advanced data insights. This transformation enables businesses to find the right people at the right time with the most relevant skills from a larger pool of applicants, whilst saving on time and money.SWFP helps to serve as a key foundation for ensuring organizations are future-ready by taking into account growth requirements and helping to initiate the journey of workforce DNA transformation.
In a nutshell, SWFP helps companies to be in a future-ready state, by enabling them to:
Have a good hold of the current workforce scenario
Be well informed of possible future workforce gaps, facilitating them to strategize gap fulfilment and avoid the probable revenue losses due to those gaps
Devise a comprehensive action plan on efficiently utilizing the various workforce types to drive maximum productivity
Be well aware of the overtime changes in workforce dynamics and reasons for those changes
Design and implement optimal reskilling strategies in line with the changing requirements, at the same time as providing optimal career pathways to their workforce
A dynamic, data-driven perspective
So how can organizations take advantage of SWFP and transform the DNA of their workforce? There are a few different paths organizations may choose to go down—each with their own pros and cons—including off-the-shelf solutions, platform SWFP modules and custom-built solutions.
For some, off-the-shelf solutions might be the preferred option. Tapping into already available, off-the-shelf SWFP solutions from partners such as Accenture can be the accelerator for the organizations to initiate the journey of workforce transformation. These solutions are agile and fast-paced with customization capabilities as per the organization’s business and functional requirements.
Alongside the option of ready-made solutions, there are custom solutions. These could range from low-scale solutions tailored to suit the specific context, through to industrialized models based on best practices across industries and organizations. These can be easily integrated with the organization’s own HRMS systems as required and act as a reusable framework that supports continuous assessment and strategizing.
Custom solutions follow a comprehensive approach starting from current scenario assessment to gap fulfilment and are backed by assessment of impact due to the changing nature of work and workforce needs.
A helpful steer
Often organizations are either unaware of the impact and value of HR analytics or they don’t know where to start or how to move ahead. To understand the unique value SWFP holds for them before they embark on their SWFP journey, organizations must seek advisory support.
For example, the head of operations at a large oil and gas firm might seek SWFP and advisory support to understand how workforce dynamics could help drive a growth target of 10 percent over five years. Using HR transformation analytics, the executive could determine the optimal workforce makeup to support that growth and implement accordingly, assessing for ongoing performance and success in turn.
Apart from selecting off- or on-the-shelf solutions, advisors can help with a number of other matters, too:
Managing the data associated with setting up a workforce analytics unit
Offering guidance on the difference between reporting and value-added analytics
Understanding the impact of workforce performance and behavior on company performance metrics
Targeting and connecting with senior decision-makers, who hold the investment resources
To understand the unique value SWFP holds for them before they embark on their SWFP journey, organizations must seek advisory support.
A strategic outlook
Increasingly, the workforce consists of more than just humans. Robots, chatbots and other automated technologies are entering the workspace, driving up productivity, efficiency and satisfaction levels.
In this radically shifting workforce landscape, SWFP can empower organizations, provide direction and actionable insights. Some of the questions it can help to answer include:
What is the impact of future demand scenarios or supply calibrations on my organization’s overall workforce requirement?
Which business-critical segments will my organization need to prioritize for future readiness in order to minimize impact?
What actions should my organization prioritize to try and ensure a lean approach to building a more productive and more agile business?
How can my organization minimize impact on current processes whilst still aligning with the future workforce and growth requirements?
What is the optimal FTE requirement at the most granular level of decision-making?
Which fulfillment strategy is relevant for the organization based upon business objectives and organizational constraints?
On a macro level, legal discussions, which aim to consider who is responsible for the robot workforce, have already started and will only be accelerating in the years to come. The human-machine balance is also firmly on the planning agenda. The next frontier for HR to claim—no matter how futuristic it may seem—will be robot well-being and productivity.
The only thing left for those organizations that want to tap into the potential that this future workforce holds is to start planning now.
Get in touch to learn more about how to get started with strategically planning the workforce of the future.
*We are here to help you navigate so schedule a call to discuss your specific business goals
Only a few years ago companies were collecting data about their customers through consumer panels and face-to-face surveys.
Today, there are many sources of on– and offline data available, each containing more information than most organizations ever thought possible.
When joined with internal data, the potential business value this “new data” can create is limitless. Read on to find out why.
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In our data-driven world, everyone leaves a trail. “New data” is the digital dust that consumers and businesses create—and that niche data technologies collect. And for today’s organizations, this new data could be opening up opportunities to connect to customers on a hyper-personal level, capturing their attention at the right time and place with the right message.
Three years ago, it was predicted that by 2019, about 75 percent of analytics solutions would incorporate 10 or more exogenous data sources from second-party partners or third-party providers. In your experience, has this prediction come true?
A paradigm shift has happened. The availability of external data about consumers is exploding—and it might become more cost-efficient to acquire.
Due to the computing power available, we also now could have the ability to run multiple algorithms over this data so that we can connect all these disparate data sources. This means we now might have the ability to connect all dots together for an individual, like a name to an IP address to a device ID to the type of apps a person is using. So yes, this prediction might coming true.
What is the value of data services to today’s companies? And what impact could it possibly have on the customer experience?
Put simply, data services can help companies connect with their customers at the Zero Moment of Truth (ZMOT).
As soon as customers start searching for a specific product, they can provide multiple signals out of their search. These signals can be derived from their online browsing history, visits or apps on their mobile phones. Mining through these signals, data services providers can identify and segment customers and deliver targeted offer ads to them.
The timeliness of actions is very important during this period, as customers may not remain in this ZMOT state for a long time. Companies that know a person is looking for a product but don’t do anything for weeks, might risk losing this potential customer for life.
While the ZMOT usually occurs when the customer is at the very beginning of the decision journey—as they are starting to explore options through research and may or may not be aware of your products or brand—the first moment of truth comes when the customer purchases a product. The second moment of truth follows, when they use and experience the product.
The experience of a product is highly important, as it might either lead to a repeat purchase or result in a renewed search, thereby creating the next ZMOT.
Which sectors are paving the way in this approach to customer interaction? Could you give an example?
From experience, the banking and financial services sectors are further ahead of the rest, followed very closely by retail, largely because the data science industry within these sectors is a lot more mature. Their desire to understand customers and what they are doing when they are not transacting with them is one of the main reasons I think banks, insurance carriers and other financial services providers and retailers have such advanced data analytics capabilities.
For example, say a bank had a customer that wanted to attend a skydiving event in New Zealand—that customer would begin by searching for hotels, flights and related activities in the area. Their online browsing data could then send a signal to their bank; if the bank is able to derive insights from this data, they could reach out with a recommended personal loan to help the customer in their upcoming trip.
Along with the loan, the bank could offer the customer a concierge service to help them plan their vacation, or a travel insurance and a Forex card with no foreign transaction fees. And if this information reached the customer when they were at the very beginning of their decision journey, the bank might win them over for this and any other future trips.
How about B2B organizations—are they also able to utilize new data to better understand and connect to their customers?
Data services are still extremely useful in a business context—one of the main differences between these services for B2C and B2B organizations, is related to the types of data they take into account and the insights that are derived.
For example, a B2C business (as in the banking example above) may require data services to focus on online browsing history, social media activity, and wealth and financial data to derive customer insights. In the case of a B2B enterprise on the other hand, data services may need to draw insights from firmographics, online presence, growth trends, credit and business health information, and technology stack data.
Take a platform provider for example, whose main source of revenue is advertising for other businesses. To understand who would want to advertise on their platform, the company would need to have a 360-degree view of the market—the types of businesses, their online presence, their target customer base, their online spend and the type of key words under which they appear in search.
A data service provider would be able to give this organization the type of information they are looking for, and even make predictions about the type of customers that might be looking to advertise through its platform.
What are the potential benefits that come from allying with an established data services provider?
Using complex algorithms and leveraging the power of AI/ML, data services providers can consolidate the signals a customer is sending to predict the likelihood of a customer purchasing a product or service. They can then use these insights as a lead to be shared across a number of different organizations—giving more robust oversight to customer behaviors and actions.
For example, a customer might be looking to buy a car. At the beginning of their journey they might download a few mobile applications, search for cars online, look into auto loans and insurance, and visit local dealerships to test drive cars. At that stage, the customer is in the market for not only a car, but for insurance and a loan too.
This data—mobile, browsing and geolocation data—can be used by a data service provider to send companies in the car market, as well as banks and insurers, a number of signals so that they can reach out to the potential customer at that ZMOT.Using complex algorithms and leveraging the power of AI/ML, data services providers can consolidate the signals a customer is sending to predict the likelihood of a customer purchasing a product or service.
What are the biggest barriers to deriving data from these new—and varied—sources?
There are three core challenges businesses need to be aware of if they decide to go down this path. The first is to identify the right data source for the problem your business wants to solve. The data services space is expanding quickly, which means that what the data providers are sharing with you could be similar or even the same, or at different levels of granularity. Some of the data may be name and address level, while other data could be cookie IDs, device IDs and IP addresses. This could make it all the more challenging to connect all this data together so that you can have a holistic view, or even DNA of your customers. It is advisable to select the data source based on the length and breadth of the data, completeness and accuracy, and volume.
The second challenge is to analyze all of this data together. Even if you are able to overcome the first hurdle, you may find you have a data set with data for around 100 million+ people and 20,000+ things that you know about each and every one of them. The question then becomes: How do I find exactly what I need to solve my business problem?
Last—but certainly not least important—is conducting due diligence and legal review on data. Companies need to vet all vendors they work with on an individualized basis, which might take a lot of time and may hamper the whole process. One way to speed this up could be to ally with a data service provider that already has established relationships with vendors, where this expanding data ecosystem has been thoroughly investigated and the necessary legal checks have already been carried out.
For organizations looking to apply data services and unlock this new potential, where is the suitable place to begin?
Defining the business use case is very important. Companies should not just acquire data because everybody else is doing so: If they don’t have a specific use case, once the data lands in their lap, they may not be able to use it at all.
Nail down the use case first and this could help to identify the right data to solve it. Finding the right data services ally is the next step. This is especially important for safeguarding against any potential privacy issues.
With the external data ecosystem expanding rapidly, there are many data vendors, data aggregators and data sellers in the market that might be supplying the same type of data. There are a few steps which may help you to choose the right data vendor, to suit your needs and your business:
Data intake and use case assessment: Gather details on the data elements being used, data flow on the platform and final usage of the data. Your legal team should also assess the use of this data for the defined set of use cases.
Data vendor assessment: Assess each vendor on a suite of parameters such as their data collection methodology, data security, data completeness, and volumes and customer consent to use data for specific purposes.
Vendor contracting: These terms can help you to verify the correct usage of the data, a list of use cases and the data licensing term with details around its treatment post use (e.g., deleting the data after its use).
The companies that have a clear business objective and the right data partner by their side will be the ones that should derive the most value from new data—for their business and their customers.
*We are here to help you navigate so schedule a call to discuss your specific business goals
MWC surveyed 1,500 SMBs, interviewed 30 SMB leaders and analyzed employment data to better understand SMBs.
Small and Medium Business (SMBs) represent a major growth opportunity—but many businesses struggle to understand, segment and target the SMB market.
With the right mindset and an understanding of SMBs’ needs and purchase journeys, companies can prove successful with smaller customers.
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When is small really big? It’s when you’re talking about Small and Medium Businesses, the 5.1 million U.S. companies of less than 1,000 employees. Despite the enormous scale, many companies find the SMB market daunting and a challenge to understand, segment and target. This does not need to be the case. With the right mindset and an understanding of SMBs’ needs and purchase journeys, companies can prove successful with smaller customers.
To better understand SMBs, Google and Accenture surveyed 1,500 SMBs, interviewed 30 SMB leaders and analyzed U.S. Bureau of Labor Statistics employment data.
What did we find?
SMBs are unique
The SMB market is a huge opportunity as SMBs are equal in size to enterprise and are growing 4 percent annually. Moreover, nearly 40 percent of SMBs have been in the market for more than 25 years.
* Does not include sole proprietorships, which is considered a ‘non-employer’ by the U.S. Census (one person corporations would be included; contractors would not). Source: U.S. Bureau of Labor Statistics; Small Business Administration
SMBs behave more like consumers than large enterprises. That may be why consumer brands often win SMB dollars as these brands appeal to individuals and have already forged relationships across the journey from awareness to loyalty.SMBs are not one-size-fits-all and are often misunderstood.
However, when diving deeper into SMBs’ buying behavior, we found many don’t actually have a preference for consumer brands. They simply default to what they know. That means both B2B and consumer brands can win SMBs’ product and service purchases if they are positioned appropriate. We believe standard enterprise marketing messaging and use cases will prove limiting.
32%of SMBs have no preference of B2B or personal brand when choosing a product or service for their business.
Similar to how consumers buy services for themselves and their households, SMB buyers have multiple roles within their businesses. An owner, for example, is likely to be the head of marketing, CIO and the operations leader. Playing multiple roles is typical until SMBs reach about 100 employees; at this size roles start to delineate and functional departments form.
Our research found that, on average, job responsibilities of survey respondents involved in the buying process span 1.5 to 2 functions. This creates a complicated matrix when companies consider how to identify individual SMB buyers and how to reach them. Once relationships are formed, SMB buyers who play multiple roles will rely on trusted parties to guide them in their path to purchase.
A growth mindset
Driving revenue growth is the primary purchase motivator for SMBs. Growth goals span incubating new customer segments, opening new locations, or entering new markets. In our survey, one-third of SMBs indicated that new product and service purchases are growth motivated and this increases to nearly two-thirds (63 percent) of SMBs who are purchasing marketing services. Enterprises trying to sell to SMBs should keep in mind that SMBs will always have a “Will this scale?” mindset and will be seeking out solutions that promote their growth.
“Those advertisers that can address the segment differently, both from a product and marketing perspective, will win,” says Seth Schuler, managing director – Software & Platforms Strategy at Accenture. As an example, those that promote functions over features and offer more streamlined solutions should see gains.
Digital, digital, digital
Digital channels are a go-to for SMB buyers: 79 percent of SMBs use online advertising and search engines in at least one phase of their buying journey. And, in each phase, from discovery to purchase and post-sale re-evaluation, nearly half of SMBs turn to digital channels, including company websites. While this should not be a surprise in this all-digital-age, what is different about SMBs is their desire for personal support and personalization. An experience that combines the digital approach with buyers’ desire for relationships is something many companies have not been able to master.
79%of SMBs use online advertising and search engines in at least one phase of their buying journey.
Jay Bowden, Managing Director of Home Services at Google, emphasizes the importance of the digital experience: “When evaluating brands to use for their business needs, SMBs expect the same fast, frictionless, high-quality online experiences that they have with the brands they use in their personal lives. They do not delineate between the two, which significantly raises the bar for companies that SMBs do business with. Don’t let your brand fall short in the eyes of the SMB consumer by having a sub-par owned website. Improving your online experience is just as important as having great customer service and a great product.”
Given SMB buyers are typically not experts in every purchase, they highly regard recommendations from trusted experts, friends and family as a form of validation for purchase decisions. This highlights the importance and the opportunity of having influencers advocating for brands that choose to target SMBs.
Loyalty first, second, third and fourth
Most SMB executives do not have the bandwidth to focus on buying processes. SMBs spend the time upfront, discovering and evaluating potential products and services. Once SMBs have decided on a solution or brand, they’re loyal and committed. SMBs will only reflect on their decision in the face of quality challenges or large price increases.
62%
of SMBs state they highly likely to renew products or services they purchased.
Maintaining a strong customer service mindset will help capture and retain SMB buyers. SMBs want a lasting partner that will provide high-quality, responsive support. SMBs do not have in-house experts to tell them how to use the product, so they lean on service providers for expertise. This leads to upsell and cross-sell opportunities.
“Loyalty is earned through the relationship established with SMBs,” says Doug Novack, Managing Director of Business and Industrial Markets at Google. “Suppliers that are not only involved in the initial research stages, but also provide proactive post-purchase customer service are the ones best positioned to inspire loyalty and capture growth with the SMB segment.”
What are the implications?
Selling to small-and medium-sized businesses can be a major growth opportunity. They are vast in number, accessible through digital channels, open to conversation and advice and, once a purchase is made, resistant to switching.
To capture this opportunity, “traditional enterprise-focused advertisers have to think more strategically about the growth value of the SMB market,” says Michelle Bandler, Managing Director Tech B2B, Google. Monika Wood, Founder/Principal MW Consulting, Inc. concurs: “Companies need up-front market, product and customer strategy to drive informed decision making as they go after this market. And these strategies should be based on actionable market insight from primary research, industry expertise and quantitative analysis.”
This research points to three important considerations as companies build strategies to more effectively succeed with SMBs. First, communicate a growth message. Offer value propositions targeted to unique business needs of SMBs and demonstrate how your product or services will help them fuel their growth objectives. Second, be there when SMB executives are searching for solutions to their problems. Companies need to be in the “dialogue” early in the company life cycle so they can support SMBs as they grow. Lastly, the conversation with SMBs needs to be about addressing business problems and opportunities; companies need a trusted advisor they rely on over time, not an order taker. And, once that relationship is established, the brand is well-positioned to win with SMBs.
*We are here to help you navigate so schedule a call to discuss your specific business goals
