Businesses are becoming more and more tech savvy. Technologists are constantly getting smarter and business leaders have their fingers on the pulse of the latest tech. And yet, we’re still facing a lot of challenges around how to get the most value from technology. The dilemma is real: we know more about technology than ever, but sometimes we feel like we’re getting further and further away from really seeing the value in it.
This is not a discussion about how pervasive technology is, and how we need to have a more integrated technology infrastructure – although of course both of these things are truer than ever. And an infrastructure that embraces the inter-connected nature of the technology ecosystem is vital, by the way, but this discussion is focussed on something else.
Proving value is difficult, so is defining it
The way that we realise commercial value from investments is less transactional and less linear than in the past. While value previously was often derived from efficiency gains, that’s difficult to justify in isolation today.
In the modern environment – what we have dubbed the ‘post-digital’ era – value also comes from the experiences we can deliver to customers, employees, partners and anyone else in our ecosystems.
While most businesses are already in tune with that the next few years will see those goalposts move again. We will have to think more deeply about how our purpose creates or contributes to value. It will be the difference maker for a lot of organisations.
It’s actually not as far off as you might think. What you stand for and the way you behave as a business is already coming to the fore. We will soon start to see exactly how impactful that becomes. But it’s not a quick fix, so companies should start thinking about it now.
Some companies are already doing it. Bosch puts 50 percent of its R&D spend into technologies that support conservation and environmental protection. On top of that, its Bosch eXchange programme remanufactures used car components. This initiative cuts 23,000 metric tons of CO2 each year compared to new manufacturing.
Sky Ocean Rescue is another great example of purpose in the new age. Not only has the company taken part in tremendous global projects to reduce plastic in the oceans, but it has overhauled a lot of internal processes too. From the supplies in the office to packaging and supply chain practices, the company is living and breathing this purpose.
It’s a mission that more and more companies are starting to take seriously. The Business Roundtable’s Statement on the Purpose of the Corporation was signed by 181 CEOs in the US – including Accenture’s Julie Sweet – signalling their commitment to all stakeholders, not just shareholders.
When we start to think more about the people around our businesses – customers, employees, suppliers, communities, as well as shareholders – purpose starts to come into better focus.
This commitment to a less self-focussed way of doing business is an important part of a company’s evolution. If we look at the context of the techlash, being a more responsible business could be a make or break change of direction.
We actually believe that techlash slightly mischaracterises what is happening at the moment. That term suggests that people are rejecting technology, but that’s not really true. Technology is a bigger part of peoples’ lives than ever, from everyday tasks performed by virtual assistants, to online services for banking or utilities, to healthcare, shopping and food, technology is woven into our lives.
What’s happening instead is that the expectations that people have of technology are so high, and in some cases so emotionally charged, that those businesses that cannot or do not meet those standards will feel a fall out. It’s something we call tech-clash.
Back to value
A lot of this discussion feels more like it’s a perception or PR challenge. Many will ask why is it relevant to value?
There’s a historical link between purpose-driven companies and success. In 1994 ‘Built to Last’ showed that throughout most of the 20th century purpose-driven companies were six-times more profitable than those that were primarily driven by profit.
Bring that into the present day and our own research shows a similar correlation. Nearly two-thirds of consumers prefer to buy goods and services from companies that stand for a shared purpose, when that purpose reflects their own personal values and beliefs. And they’re ditching those that don’t.
Living by a clear purpose could impact your bottom line. If you can re-engineer your company to live by something you believe in, then there’s a big opportunity to connect with customers on more than just a transactional level.
Can we, but should we?
Knowing the value that’s associated with actions and reputation should prompt new ways of looking at how we operate our businesses. If we think about the tech-clash that exists today, it’s the result of unintended consequences. We were ‘so preoccupied with whether or not we could, we didn’t stop to think if we should’.
Now that’s paraphrasing Dr Ian Malcolm, who at the time was talking about breeding dinosaurs in Jurassic Park, not about technology. However, the sentiment applies.
To be successful in the new era of expectations and purpose, we need to put more thought into what we should do, and not only think about what we can do.
That idea of ‘should’ is inextricably linked to the people around your business that we mentioned before. Some customers/employees/partners will have strong passions about a specific issue, clearly others won’t. But if we guide ourselves by the ideas of what will be genuinely beneficial to those people (and not just to the bottom line), then we are on the right track to finding real value.
It’s an important responsibility for every organisation and the guiding principle around purpose is that it must be authentically your own. If it’s not, it will be transparently false and people will not connect with it.
What’s the next step?
As technology experts, our natural inclination is to find the answers within technology. They hold such great possibilities, it’s true. However, value isn’t about the tech.
That is over-simplifying a bit, but it’s true. We all do tech. It’s everywhere. But value isn’t and that’s because too often we think that the tools themselves are the differentiator. They’re the tools…and like anything if you’re not using them correctly they won’t work.
Value comes when you go further in relating the tech to the people using it. People-centricity by being relevant, responsive and respectful of people has to be a core strategy. What we need to find are the instances where that technology can have a positive effect on the way people work and live.
We do, however, find our way back to technology when we consider questions of how to deliver these great visions. If purpose is at the heart of your business, the strategies to live by it should be technology-first. It should be the platform for innovation and growth, not simply a business support function.
To deliver in an ultra-competitive era of mobile, social, AI and purpose we need radically different operating models.
There is a strong correlation between revenue growth and pace of new technology adoption, depth of adoption and organisational change. The leaders in this sense are around 15 percent better off in terms of annual revenue than those who really struggle. But that will grow to 46 percent in the next three years.
But tearing up what we have is not the answer. Although 70 percent of CEOs think legacy technology hinders business growth, 83 percent still see value in keeping it. We’re not heading back to rip and replace.
The way to have your cake and eat it here is to re-think how each technology contributes to the business. Many systems can be re-purposed to become the platforms for innovation and growth that are needed to thrive in this new purpose-driven world. So it doesn’t need to be yet another overhaul, but we do need some remodelling!
Zahra Bahrololoumi is head of Accenture Technology, UK and Ireland