Sunday, June 06, 2021 / 07.00 AM / Teslim
Shitta-Bey, Managing Editor, Proshare/Header Image Credit: Medium
Brochureware or low-function websites welcome customers to shiny corporate egos, but add little customer value. Several Nigerian companies design websites as tools for establishing presence rather than platforms for building customer engagement. Indeed, interaction on these sites is minimalist and prepares organisations for an undesirable end where they are digitally 'canceled'.
The new corporate world requires agility, boldness, and imagination, three qualities that will separate corporate losers from winners over the next decade. Websites are increasingly becoming tools by which organisations understand their clients and customers and help them to rework their product or service offerings in a feedback loop that encourages customers to be part of the product or service design process beyond mere consumption. End-users of corporate products or services are no longer passive but active contributors to the product and service design process as they shape their user experiences and interactions (UX/UI).
To be sure, to fit neatly into the world of customer-centricity, companies will have to show themselves to be stable and dynamic; two concepts which, on face value, appear contradictory. Stability suggests that companies need to show resilience, reliability, and resourcefulness. This means that companies need to create backbones or templates, processes, and procedures that keep them anchored but flexible (see illustration 1 below).
Illustration 1 Understanding the Agile Company
In other words, strong procedures and processes should not prevent companies from promoting creativity, innovativeness, and a flat corporate structure that allows for agility supported by speed. Analysts note that the push and pull of formal governance frameworks and operational flexibility can co-exist to create nimble companies focused on promoting change rather than following it. Business analysts have increasingly realized that it is always easier to find the appropriate solutions to a problem that has been created by themselves. Companies that create a flexible walkthrough workspace need to retain sufficient discipline to see to it that the organization does not suffer from the arrogance of success and fall victim to the proverbial winner's curse.
Nimble organisations have work teams that are dynamic with their creation and change processes which they align to identifiable corporate, product, or service targets. Dynamism will be a key feature of those organisations that survive future disruptions beyond 2021. If companies are not going to be trapped by the next wave of socioeconomic dislocations they must be prepared to make a transition away from frigid routines and frozen outlooks to less formal and hierarchical structures that allow for better internal collaboration and the breaking of silo walls. Teams in the agile firm will partner with one another to deliver consumer journey satisfaction (see illustration 2 below).
Illustration 2 From Trapped to Agile, the Transition of Corporations
The Artificial Intelligence (AI) Plug-and-Play Rulebook
Technology is not a simple add-on for the nimble company but a plug-in. The company that hopes to remain sustainable over the decade cannot afford to simply attach technology to the old ways of operating, but it must tear up the old playbook and rewrite a new script with the customer as the primary focus of engagement. Data analytics and artificial intelligence will become the hub of a new way of engineering products and services that meet consumer needs and prise their spending decisions.
Corporate analysts have noted that if companies want to adopt analytics and artificial intelligence to build business sustainability they cannot simply buy off-the-shelf solutions and add them to existing operations, things, unfortunately, are not that simple.
In a recent article on the use of analytics and artificial intelligence in the biopharma business, McKinsey Consulting writers Stephanie Bayer, Sulay Sandy, Ulf Schrader, and Matthias Spiegl note six key principles in ensuring that adoption is successful or at least beneficial (see illustration 3 below).
Illustration 3 Six Principles of Leveraging Digital and Analytics
The authors note that companies that intend to use AI to leverage corporate strategy must first Start with a leadership-backed, impact-driven strategy and roadmap. In other words, the AI strategy must be driven from the top of the company and must be designed to achieve high-impact results along a collectively agreed path. Why AI?
According to the McKinsey researchers AI adoption "can drive the next wave of business optimization by transforming operational performance, shortening time to market, improving quality and yield, reducing supply chain volatility, and accelerating technology transfers" outcomes that most companies would cherish considering the impact that the recent COVID-19 pandemic has had on their 2020 operations.
The second consideration in the clever use of AI according to the writers involves accelerating transformation with experienced leaders, skilled staff, and multifunctional teams. In their study of the biopharma sector they note that "As part of the people and leadership strategy, it is also important for companies to identify the skills they need, including those that can be filled internally with training and development; investing in their talent will be vital for companies to establish digital as a competitive advantage. For external sourcing, we have seen pharma and biopharma companies form successful partnerships with research and academia. These partnerships have given them firsthand knowledge of technology advancements and enabled them to bring those advancements to the shop floor". Despite the importance of technology the people required to implement its adoption as part of the business process are just as important as the mathematical algorithms and code scripts they use to gain a deeper understanding of their customers.
A third consideration for the strategic use of AI is the implementation of a strategy, architecture, and governance framework for data use. This would see to it that companies take advantage of big data to shape their products and services and provide organizational support structures that are focused on delivering value to consumers or users of the company's outputs.
The writers note that the fourth stop in the transition from a trapped to agile AI-enhanced corporation is the building of a tried-and-tested delivery methodology for digital and analytic solutions. They noted that "Delivering digital-and-analytics solutions is a complex process that requires an intense commitment of time and resources. It's not a one-time effort, but a new way of working that is essential for high-performing organizations".
According to the authors of the report "Success requires a delivery protocol that codifies technology-enabled best practices for delivering digital-and-analytics solutions tried and tested by practitioners. This protocol helps ensure predictability, output quality, and uniformity in solution delivery. It's essential for scaling solutions that have been successfully piloted. Just as you wouldn't institute a new change-over process without standard operating procedures, you should not embark on a digital-and-analytics transformation without a delivery protocol".
The delivery protocol involves a look at processes, people, and technology enablers. By creating, clarifying, and implementing a delivery protocol a company stands a better chance of ensuring that its digital transformation endures and the organization is properly prepared to face future disruptions.
Constructing a fit-for-purpose technology stack is the fifth element of the digital master plan of a sustainable business operation. But what does a fit-for-purpose technology stack mean? What this, means is that companies that want to build defensive shields against business disruptions between 2021 and 2030 must ensure that they put in place operating technology (OT) and information technology (IT) that allow differentiated performance across teams and service or product lines. For example, a Nigerian Zenith Bank could decide that the operating technology needed for consumer retail banking should be a shade or two different from the OT of investment or wholesale banking. Take FBNH, Nigeria's oldest financial Holdco, for example, the operating technology for its agency banking success is different from the operating technology that drives the operations of its FBNQuest investment banking arm.
Outside the banking and finance sector, the same principle would apply. Nimble companies would need to develop technology stacks suited to particular products or services. In reviewing OT and IT companies need to carefully consider their platforms and how it connects to data sources. Mining data and the production of actionable reports would be critical in the new economy as companies elbow one another to provide consumers with exceptional product and service journeys.
McKinsey's researchers noted that "The rollout of new digital solutions should be accompanied by division-wide change management. Your change management plan should include ways to get senior-leadership support, formalize new incentives, engage with employees, and empower key influencers".
To wrap up the AI transformation initiative companies will need to tackle the people problem. To drive adoption and change the C-suite executives must engage with their frontline. The last mile adoption and culture change needed for corporate agility remains one of the most difficult stages in building an organization that is nimble enough to withstand a black swan event like COVID-19 (see illustration 4 below).
Illustration 4 Nigerian Businesses: The Search for Agility
Hal Gregersen, senior lecturer MIT Sloan recently observed that companies "...make enormous investments into the technical side of digital transitions and comparatively minimal investments in actually helping the individuals navigate the challenging transition". This imbalance in resource commitment could reduce the effectiveness of the overall digital/AI strategy as human resource limitations restrict the scaling of businesses.
As businesses absorb AI into their operations to improve productivity and customer product or service experience, they must equally be prepared to improve the skills of their workers and ensure that the right balance is achieved between AI adoption and worker adaptation. The frontline worker is just as important as the backline techie.
Change As Iteration
Change is not a destination but a process. Companies will need to learn, unlearn and relearn to have regular conversations with their reality in a frank, firm, and forward-facing manner. The change agenda must rise above clever soundbites to actionable programmes and processes that back corporate sustainability while taking into consideration the environment, society, and governance (ESG).
Yesterday's companies relied on size and political influence for their successes but tomorrow's companies will rely on agility and consumer understanding to deliver a pipeline of market-leading products and services. This would involve continuous interpretation of market retail and wholesale data and the continuous shifts in consumer sentiments. The process will involve a series of regular interplays between the company and the marketplace. Will the process be smooth and clean? No, it will be rough and dirty, but it is the only play in town, at least until another gameboard appears. A look at the dominant companies in Nigeria between 1980 and 1999 (UACN, PZ, UNTL, Afprint, John Holt, UNILEVER, Nestle, Union Bank, First Bank, NTA, etc.) and the new champions of the coliseum (MTN, GLO, Airtel, Leadway Insurance, Jumia, Paystack, Access Bank, GT Bank, Zenith Bank, Arise TV, etc) that have emerged between 2000 and 2021 shows the subtle but discernible rise of technology-focused institutions capable of gathering big data and using artificial intelligence and machine learning to map consumer preferences and buyer's expectations (see illustration 5 below).
Illustration 5 Mapping Nigeria's Industrial Evolution 1980-2021
Corporate strategists have noted that tomorrow's business decisions will not be siloed into specific periods but will be the result of a regular conversation between market analytics, corporate marketers, and product or service end-users. Winning and losing in the new corporate environment would be reduced to the simple issue of who understands the future needs of customers and who does not. In other words, it would be delicately balanced between the customer's present truth and their past feelings, as American author Oscar Wilde once pointed out, "truth is rarely pure and never simple".
Eyes on the Future
As AI/ML grows in stature as tools of competitive advantage the future will become an intense battlefield of interpreting consumer's wants and needs. The accelerated growth of consumerism or consumer focus will drag companies deeper into the use of data and technology to meet the rising expectations of an impatient and socially conscious generation. Millennials share some similarities with their older baby-boom parents as they portray patience, a readiness to read, and be comfortable with long attention spans. This is at variance with a younger generation described as Y and X. Generation Y and X have short attention spans, high social interactiveness, limited brand loyalty, strong technical competence and familiarity with gadgets and software, and sometimes alarming need for speed.
The profile of the new customer across industries is a marked change from that of the past. Companies, therefore, must be prepared to do the following:
The future of corporations in Nigeria will be shaped by how swiftly and cleverly they respond to the rising expectations of customers and the ever-present pressure of profitability. Lower real disposable income (caused by a sustained rise in domestic headline inflation recently estimated at 18.12% as of April 2021), rising domestic unemployment (estimated at 33.3% in Q1 2021), and slow economic growth (GDP grew by 0.51% as of April 2021) make for a difficult domestic market for the sale of goods and services.
For Nigerian companies to survive such hard times the search for efficiency and effectiveness will be central to their wellbeing and critical to their sustainability (see illustration below).
Illustration 6 Sustainability: The Short Road to Tomorrow
The CEO of RACK Centre, Dr. Ayotunde Coker at a 2020 Institute of Directors (IoD) Nigeria Conference pointed out that Nigeria has 144m internet connections with roughly 10 percent having broadband access. This suggests that about 15m Nigerians have access to broadband internet thereby indicating that those that have broadband internet in the country more than the population size of Belgium and Norway put together.
What this means is that companies are going to see more transactions move on to digital platforms and those that are unprepared for the change to come may find themselves going the way of Dinosaurs. Fossils may be intriguing but they do not represent life. Organisations preparing for the future are not museum pieces.
This article represents some of the issues that will be addressed in a broader framework in Proshare Nigeria's forthcoming CEO Remuneration Report 2021 which will apart from reviewing the remuneration of company CEOs in Nigeria in 2020 also review the status of the local business environment and how COVID-19 has accelerated workers rethinking of the purpose and nature of their work.
Downloadable Versions of 2020 Report (PDF)
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