Smart Nation can be your greatest opportunity. The key is to forget about technology and focus on business acumen. How good is yours?
Technology does not matter. It is business smarts that counts. It is often easier for adept business managers to learn the technology necessary for success than for the consummate technology professional to acquire needed business acumen. If you are a business manager at any level, that is good news for you (if you don’t happen to be a technologist). If you are a technologist, this is not bad news, but it may mean that you need to pay attention to the business side of technology more than what has made you comfortable in the past.
No matter which side of the business-technology divide you are in, or even if you straddle both sides, here are five provocative questions that will help you, your business, and your staff get ready for what is to come or even what may already be here.
1. Which profitable lines of business will you cut?
Digital technology will likely render some business lines obsolete. It is an easy management decision to eliminate unprofitable business. However, just because you can make money at something does not mean you should do it. In the same way you need to clear a garden before you can plant new seeds, you need to make room for the strategic growth and change in your business that Smart Nation portends. Continue only the business that will advance your strategy, not just make money. Everything else you can cut. This is best practice in business always. However, the awareness of Smart Nation makes now a great time to clean the house.
2. What kind of breakthrough products and services would completely alter your industry?
The insurance business remains largely unchanged since the days when Venice was a wealthy nation-state. Digital technology offers opportunity for remaking the entire industry. For example, the leader of an insurance business has to be thinking about how to support consumers to rapidly develop their own custom insurance products online for themselves and purchase them immediately. The same leader must consider how companies with massive data on consumer behaviour may be better able to assess individual risk of insurance customers than insurance companies that lack the same kind of rich and specific data. It is not inconceivable that an Amazon or a Google could completely disrupt the industry and destroy established players in the process. It must be on that leader’s mind how to beat them to it, or otherwise co-opt them and do it together. You need to do the same in your business no matter the level at which you lead.
3. How could you best destroy your business from the outside if you were determined to do so?
Change like Smart Nation always offers new opportunities for competitors to eat your lunch like in the insurance industry example above. Even if you are not working on how best to kill your business, I can assure you that your competitors are. Assume that your competitors are at least as smart as you. When you identify vulnerabilities in a business line, decide whether it is worth defending in view of your strategy. Otherwise, eliminate it yourself before your competitors force you to do so, no matter how profitable it may be now.
4. If you were starting a business from scratch in your industry today, which markets would you enter and which customers would you target? How would you sell to them?
If your answers are different from what your business is doing now, you probably need to make a change. The path to where you want to go can seem daunting when you consider where you are. Liberate your thinking from your history. For example, the managers of a chemical manufacturer with a 60-year history can’t seem to let go of the idea that they are a manufacturer, even though their manufacturing capability has long since passed its use-by date. Despite having a superlative research and development (R&D) capability that provides them with the most profitable products now whose manufacturing they outsource, their strategic priorities still focus on their ageing factory, rather than on their R&D capability. Get comfortable with letting go. Forget about where you are now and whence you have come. Start with where you would want to be without the baggage of your current business, and work backwards from there. New competing businesses are doing that right now even if you are not.
5. If you were CEO, would you keep your role in the company, change your role, or eliminate your role?
For example, industrial-use coffee machines are becoming so good at making the perfect brew, that baristas will be no more than a nostalgic eccentricity within a few years. Now is not a good time to be a barista if you aren’t developing some other capability for the future. Will technology make you the barista in your business? What capabilities will you need that will make you indispensable despite changes in technology? Don’t expect the government, your employer, or anyone to train you. Start learning and aiming for those positions now while you still can on your own terms. Don’t wait until it is too late or when you have been coerced by necessity to do so on someone else’s terms.
Smart Nation can be your greatest opportunity or the bane of your existence. Forget about the technology. The key is business acumen. How good is yours?
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