Entrepreneurialism and technology
Size dependent opportunities
Marketing under pressure
Ciecierski: Entrepreneurs come up with the great ideas and then look for ways to make them happen. In the past, cost and less able technology have held back pioneers. Now, technology is cheaper and more obtainable than ever. Hardware is almost given away in various forms and software no longer needs to be bought. In the last 15 years technological innovation has been front-end and consumer focused. Now, with data analytics and the technologies underpinning the internet of things, it is much easier to turn inspiration into a reality. For example, we’re working with some very large public sector education businesses which have a technology strategy at the heart of what they are trying to do because they can connect colleges and research establishments in a way that was previously impossible. And in the insurance market, technology is now allowing companies to monitor customers’ activity in far more detail. An entrepreneur in that environment has lots of potential to invent new lines of business.
Noakes: Actually, the term ‘entrepreneur’ is a bit of a misnomer when it comes to technology-driven businesses. It’s actually about companies that are prepared to be disruptive by using new technology, or have an appetite to transform business without boundaries. They are effectively the most change-orientated businesses. These are today’s real entrepreneurs
Telford: Because of the democratisation of technology, everybody has a smart phone and you can become a content creator and publisher using social media platforms. You can create businesses that were not possible before and reach millions of people without start-up costs.
Ciecierski: This trend is not just affecting individuals and start-ups. Looking at the biggest businesses, they are finding new ways of going to market due to the liberalisation of technology and this will be accelerated by the internet of things and the collection of new data. Large companies are starting to look more closely at what they already have but aren’t using so well. A lot of that comes back to data analysis.
Telford: This can be a struggle in some sectors such as media. Large companies have to tackle legacy systems and people. They can’t just scrap overnight what they’ve invested years creating. They are trying to optimise traditional systems and processes whilst transitioning to digital. In parallel, they need to bring in new skillsets whilst upskilling existing staff to be digitally literate in order to deliver a seamless customer experience. The opportunities for bigger businesses are there, but the realities are complex and challenging. Clients always want people who have experience to minimise risk. Successful business transformation goes beyond the technology – it is cultural and requires everyone in an organisation to embrace it and embed into their working practices
Noakes: Often, big business attempt to address that complexity by putting ‘entrepreneurialism’ in a separate place. For example, some of the large retailers allow customers to order online but they have people in store, picking products off the shelves rather than operating a separate e-commerce supply chain. You call this entrepreneurial e-commerce, but in reality they are reacting to market-disruptive web-businesses who have fully-automated, sophisticated, online-only models. Established offline businesses find it harder to compete with disruptors. Transforming a big business so that new processes are truly integrated rather than ring-fenced separately is still rare.
Ciecierski: Added to that, tighter margins and higher wage demands are making it harder to make money. Large organisations are under pressure from shareholders and are looking to technology to improve revenue. That‘s driving creativity. The big businesses that will succeed will be those that find ways to make more out of what they have. For anyone senior we hire, their priorities are often increasing efficiency to sell more to the existing customers and then expand into new markets.
Telford: That is why marketing is becoming one of the most technology-dependent functions. Gartner says that by 2017 the company CMO will spend more on technology than the CIO. Already 38% of IT spend is spent in other functions, primarily marketing. That begs the question, what do you want from a CMO these days? Last year, the Harvard Business Review predicted the rise of the Chief Marketing Technologist. Creativity is important but you need a strategist with an understanding of how technology can be used to meet objectives. It’s difficult to find those with both but businesses want their leaders to have everything.
Looking ahead, marketing is focused ever more on customer engagement through content and communication. Professionals in this sector must create a single view through a multi-channel presence that works seamlessly for customers. We always mention big data, but it’s the minute data which paints a full picture of customers and provides insights through both historical and real time data. That need for on-demand analysis means marketing has an absolute reliance on technology. This has to be efficient: companies are awash with data but often spend 80% of the time collecting, processing, segmenting and cleaning data and only 20% on the insight, which is where the real value is contained. We need to shift this towards 50-50 so that the data is used to enable decision making in real time, that’s the Holy Grail.
Telford: The roles are certainly changing and will continue to do so which will be reflected in changing titles and areas of responsibility I think the Chief Marketing Technologist, Chief Data Officer, Chief Digital Anthropologist, Customer Insight and Informatics Directors could become more frequent.
You may see Chief Customer Engagement Officers and Chief Customer Experience Officers with responsibility for acquisition and retention. Consumers have never had so much power and choice or such abundance of available information. Therefore, organisations which are focused on their product and services and make less investment in consumer insights will lose out to those who invest in this critical area. . Every company is now a content company and consumer businesses need to match their online/offline experience. So, customer experience will continue to be a trend in hiring for a while.
Ciecierski: In the previous waves of technological change, the company functions remained the same: sales, marketing, CIOs. Even during the .com era the role titles were unaffected. This is the first real fundamental change. The customer is spoilt for choice but demands even more choice. The race is on to connect with the purchaser. This is reflected in the types of roles we will see.
Noakes: There is no such thing as a communications company anymore. Telcos and communication providers are now becoming lifestyle service organisations. For example BT now provides premiership football, with fixed and mobile services and an abundance of content-rich products for consumers. People pay more for box office sport than they do for fixed-line services. For the first time ever, the spend on content is greater than telephony itself. Communications companies have therefore polarised, they are either lifestyle or a purely utility focused. They also have to prepare for the next step. Today’s networks aren’t capable of facilitating a future where tens of millions of internet devices will be pinging data every second of every day.
This demands various changes in the needs of leadership. For example, 65% of the modern motorcar is related to electronic capabilities. You’d think that boards of motor companies would be staffed with engineers. Actually they’re staffed with internet junkies because telemetry, electronics and collected data can now afford the user more information. This can be used by insurance companies to tailor individual premiums. Those that are embracing this change need people that understand what a network is and its importance, but also the security required to protect the data. Most multinationals that make things, move things around or have connectivity with large volumes of customers need a board member who understands the networks that support these changing business models. These are not typically CIOs, they are coming from Silicon Valley and chip design companies.
For technology, it’s a very exciting time in the UK. You have a densely populated market where people want to create new technologies and try things out in a country with advantageous intellectual property laws. A lot of innovation is more easily brought to the market than ever before. The cost of technology is relatively low and accessibility is higher than ever before but we need the infrastructure to support this. The rate of change is just starting to pick up and it’s not going to slow down. All of this will continue to have a more profound effect on the work we do; much more so than the technological advances which have come before.
Odgers Berndtson has evolved over the last 40 years and is now present in 29 countries spanning The Americas, Europe, Middle East & Africa and Asia Pacific. The organisation is characterised by private ownership and national knowledge, but with all the advantages of global reach and mutual understanding borne of specialist practices operating worldwide and so servicing a number of client relationships internationally.