Why tech problems may be cultural problems.

All organisations and industries are built, to varying degrees, around (traditional) assumptions and beliefs surrounding value creation as well as a resultant set of behaviours. This ‘mental model,’ has often been found as unfit for purpose in the digital economy and inverting some core beliefs is a prerequisite for changing wider business models and any successful digital transformation[i]. All too often however, technology is diagnosed as both the problem and solution; both the cause of disruption and the answer to it. In some cases this is true; but in many cases it is the friction of new technology against legacy systems, legacy processes and legacy people that causes problems.


Prior to the Uberisation of many industries, a general belief pervaded that physical assets were durable and reliable, yet the creation of platforms for under-utilised assets (in Uber’s case, cars) brought this into question. Business models and their components have changed as a result – we are not witnessing a merely technological response. Indeed, for GE this inversion meant transforming from a manufacturing company into an IoT based analytics one and divesting various (mostly hitherto successful) parts of the company along the way. New structures, new talent and new management forms have all been necessary. Clearly, adding new technology onto the old business models wouldn’t have worked – it would have allowed them to do things differently, but not different things.

The process of digital transformation is so problematic for this very reason. The requisite changes in ways of doing things runs contrary to layers of accumulated and established ways of working, both within management and the day-to-day operations of workers. Its’ strategic nature means that it directly threatens management practices that have little changed since the 1980’s and in some cases are little changed from their 19th century military origins. That said, certain cultural characteristics can better enable transformations than others. Harvard Business Review[iii] notes the following as propitious;

  • A strong, shared sense of purpose
  • Freedom to experiment
  • Distributed decision-making
  • Open to the influence of the external world

More specifically, leadership behaviours, job descriptions and roles and the systems and processes that allow people to work must be changed if the way people (and technology) work and act in an organisation are to improve.

[i] https://hbr.org/2016/06/to-go-digital-leaders-have-to-change-some-core-beliefs

[iii] https://hbr.org/2015/08/the-company-cultures-that-help-or-hinder-digital-transformation


The disappearing bank or the invisible bank?

A couple of years ago, PwC made the claim that banks as we know them may no longer be needed by 2025. This claim of disappearing banks is rendered plausible by the rise of FinTech and various other actors seeking to gain a niche of the evolving banking ecosystem in which death to the incumbent is assured through a thousand cuts. An alternative scenario would see the banks as little more than providers of infrastructure  – or banking as a platform – from which third party API’s proliferate.


A common prescription for those facing disruption is to disrupt themselves first. In this case, perhaps the key for disappearing banks is to make themselves invisible. The rise of personal digital assistants in the period to 2020 will make this possible, with Gartner for one predicting that by this date we’ll be having more conversations with bots in their various forms than with our spouses[i]. The continuation of an ever-more connected digital lifestyle, the emergence of the IoT and a profusion of digital applications is likely to augment this trend in which banking becomes embedded in every-day activities to a greater degree. Data driven, tech-savvy banks should be able to adapt a truly customer-centric model if they are able to use their data stewardship to open new value chains. For example, 97% are happy for banks to use their data if it were used to offer them a wider range of services[ii]. The opportunities in such a move would appear significant, but are matched only be the challenges of ignoring this trend; API-powered and data fuelled business models are already appearing such as Figo and Open Bank Project.

To be clear, both the disappearing bank and invisible bank scenarios suppose the dissolution of chunks of the traditional banking infrastructure. The choice is not between costly and potentially painful decisions but rather on whose terms these decisions will need to be made. It is estimated that machine learning will have the potential to disrupt 40% of banking roles[iii] and some banks have already instigated this; for example in its’ billion euro attempt aim to digitise and automate 80% of its’ processes by 2020, Commerzbank has announced 9,600 job cuts[iv]. ING has announced similar plans.

In transitioning to am ‘ambient’ bank – able to use platforms to give you personalised information, data and insights unobtrusively and at actionable points, incumbent financial institutions are essentially accepting the value proposition of FinTech. The adoption of a FinTech veneer is easy enough; the processes, systems and culture of the incumbent must align with the technology is its’ full potential is to be realised. To adapt legacy systems and legacy people to enable the deeper benefits that come from excellence in data provenance, interface design and value proposition are more difficult, but will help distinguish those who disappear from those who choose to become invisible in the digital age.

[i] http://www.cio.com/article/3133771/emerging-technology/gartner-by-2020-youll-say-more-to-a-machine-than-to-your-spouse.html

[ii] http://www.insuranceage.co.uk/insurance-age/news/2456807/insurtech-futures-customers-demanding-digital-first

[iii] https://ascent.atos.net/look-out-2016/banking/

[iv] http://qz.com/799816/dutch-bank-ing-is-replacing-5800-people-with-machines-at-a-cost-of-2-billion/

Digital security models


McKinsey suggests that by 2025, the IoT could have an $11 trillion impact[i].  A range of technologies with high values at stake – from driverless cars to the emerging wearables ecosystem will rely on this very infrastructure. New security models are sorely needed if this potential is to be realised; if our current models are insufficient for today, they will be woefully unable to deal with tomorrow’s threats. Relying on perimeter defence and rule-based security is already inadequate, especially as organisations exploit more cloud-based services and open APIs for customers and partners to integrate with their systems[ii]. This security set-up remains all too common. New, as-yet-untested models of security are needed that can deal with new and evolving threats such as deeply embedded advanced persistent threats.


Whilst technologies represent new vectors of attack, they also represent a range of tools that could improve security. Analytics will be key. Blockchain – the technology behind BitCoin could for example, dramatically reduce the cost of governing regulatory compliance in the future. New encryption methods and interfaces – such as MasterCard’s scanning of your face to authorize payments will increase in the coming years. Biometrics are evolving in new areas; ‘brainprints’ represent a new system allowing accounts to be unlocked using brainwaves[iii]. Whether quantum computing will break all known security architectures, renew them or do both remains to be seen. In any case, the acceptance that preventative services cannot be solely relied upon will be a cornerstone of data security in the future, even as the array of preventative services evolves.

Adaptive security architectures are likely to prevail. IT leaders must focus on detecting and responding to threats, in addition to the more traditional blocking. Application self-protection, as well as user and entity behaviour analytics, will help fulfil the adaptive security architecture. Such systems need to balance access with security, and concepts are gaining traction that seek to do just this. Cloaking and containing, which can also be described as the concept of least privileges, provides the least amount of information that someone needs to do their job. At the same time, security could be built inside services, by design – especially with regards to customer facing applications and services. Perhaps the key missing issues for many in visioning new security architectures lies with the board. Cybersecurity needs to be regarded as a strategic organisational pillar and a shared cultural concern, for which both executive level and board level awareness needs to rise. Appointing members fluent in tech matters is a critical step, as is building the competence of existing members and ensuring an open and transparent relationship with the CIO and other key stakeholders.

[i]  http://fortune.com/2015/07/22/mckinsey-internet-of-things/

[ii] http://www.gartner.com/newsroom/id/3143521

[iii] http://www.cityam.com/217060/you-could-soon-unlock-computers-and-bank-accounts-using-nothing-brainwaves

Future of staff engagement

The rationale implicit in digital transformation and a wide range of reorganisation projects lies in customer experience, or customers’ journeys. The focus on the customer has become the new source of differentiation in an era of commoditized consumption yet the exclusivity of this focus ignores a key group of people that help drive productivity. BCG notes that whilst ‘…companies spend $1 trillion a year understanding and shaping their customers’ journeys, they spend 1,000 times less gathering and acting on insights about their own employees[i].’ This is remarkably unbalanced and more likely than not to contribute to a degree of turnover, both customer and employee, given the key role customer service can play in customer retention.


That is not to say that business ignore their employees – some 77% of executives believe that people analytics is important[ii]. The purpose and application of such analytics is, however, equally important – whether it used as a carrot, a stick or something in between. But as BCG notes, ‘…what if companies used the same tools and techniques to learn what engages, frustrates, and inspires their employees?’

The benefits from introducing such a worker focussed system is two-fold. First, public trust is greater in organisations that actively treat their employees and second is the new normal that an imminent Millennial-dominated workforce represents. Millennials are forecast to achieve numerical advantage in the workforce in many countries over the next decade yet remain the least engaged part of the workforce (less than 29% report feeling engaged[iii]). Standard prescriptions of flexible working and the promise of a provision for work-life balance are unlikely to increase this or suffice as stand-alone efforts to increase the in-flow of Millennial talent to a given company.

Research has revealed the desire amongst a majority of Millennials for a sense of purpose in their job, as well as a desire for more feedback compared to other generations. This latter point also extends unto technology, where the choice of a given medium will increasingly be expected to at least match the consumer technology experience empowering their personal lives. Meeting these initial Millennial needs will require many companies to either restructure, learn new capabilities or in some cases, repurpose their business model and the difficulty in doing-so – whether stemming from cultural or managerial inertia or just the cost of implementing change –  will undoubtedly dissuade many companies from attempting fundamental change. This would be a major mistake however; since aside from constituting the future workforce, Millennials offer the perfect testing ground for introducing metrics that actively measure employees’ performance, wellbeing and engagement as well as unearthing insights into how these measures can be improved. It is about time worker engagement and experience received the levels of attention given to customers.

[i] https://www.bcgperspectives.com/onwards-upwards-growth/people-productivity/need-treat-employees-thoughtfully-as-customers

[ii] http://dupress.deloitte.com/dup-us-en/focus/human-capital-trends/2016/people-analytics-in-hr-analytics-teams.html

[iii] http://www.forbes.com/sites/adigaskell/2016/02/25/how-to-engage-the-millennial-workforce/#7b22b3028d26

Board-level tech awareness

Board-level tech awareness

In response to the challenge posed by digitally enabled upstarts as well as the the opportunities inherent in digital business, a wider swathe of industries and business than ever before are aiming to prove that, ultimately ‘…every company is a technology company[i].’


The disconnect between corporate ambition and ability in using these technologies, and the need to remodel corporate architecture to maximise the potential of such technologies receives much attention, and rightly so. However, a greater issue – and one generally receiving less attention is the issue of board level technological competency.

Technology and its role in digital transformation compels board level expertise, and the issue ostensibly resonates. Research suggests that almost two-thirds of boards prioritising widening the skillset of board members, especially in digital. However, a number of worrying statistics suggest that efforts to date are insufficient. Digital efforts have tended to lack strategic alignment since 29% are still led by individual business units[ii]. Worse still, 69% have not discussed cybersecurity at board level in the preceding six months[iii] and 46% have made no efforts to educate their directors[iv], whose average age is 63. Overall, only 14% claim their boards have produced a comprehensive digital strategy[v]. With risks inherent in digital and the rewards far from assured by employing an operational plug and play tech strategy, such a set-up could well account for the predictions of an increased future turnover of the Fortune 500 and of corporate failure.

A shift in board education, competencies and even composition may be necessary if a clear, cohesive and strategic view of technology is to be achieved. This means adding directors with technical knowledge and a concurrent strategy to build IT awareness amongst existing members. The latter will require significant investment of time and money, at least initially as the board grapples with core issues:

  • How does our tech infrastructure and specifics compare to peers, within and outside of the industry?
  • To what extent does legacy technology impinge us? What investment is needed?
  • How and where does our digital strategy match our overall strategic priorities?
  • What capabilities do we need to achieve our strategies? Does our operational structure maximise technological ability?

One established an oversight position can be better established and should be aided by a new emphasis on lucid and open contact with the (right) CIO, as well as an outside-in perspective by subject-matter experts when needed. Periodic review, educational boot camps could also help inspire not only competence but perhaps the longer-term goal of the board providing tech education to the workforce. The challenges and opportunities presented by a digital world are both imminent and immense; can analogue boards change in time?

[i] http://blogs.gartner.com/mark_raskino/2013/11/28/every-company-is-a-technology-company-more-and-more-evidence/

[ii] http://digitising-it.eiu.com/what-is-its-role-in-digital-transformation/

[iii] http://www.ey.com/Publication/vwLUAssets/EY-Global-Capital-Confidence-Barometer-April-2016/$FILE/EY-Global-Capital-Confidence-Barometer-April-2016.pdf

[iv] https://marketing.kpmgenterprise.co.uk/TakingTheOffensive

[v] http://www.hrinasia.com/hr-news/board-appointments-still-made-within-closed-networks-why/

Act 1 Part 2: What if? Post BREXIT and EU wildcards

The BREXIT campaign was marked on both sides by a complete and utter absence of a future vision. The opportunities to discuss the UK’s true place in the world were never fully explored. The ‘what if’ question or ‘what happens next,’ scenarios are basic tenets of corporate and indeed government planning. They also seem to have been singularly excluded from anybody’s thinking in the British body politic in the run up to the referendum vote. The protagonists on both sides rightly shoulder significant blame and whilst this shouldn’t be mitigated, extricating the UK or some variant thereof from an already complex and far from homogenous 27 nation institution is the stuff of planning nightmares. In many ways, BREXIT was the wildcard, but what happens next will have far more significance than the vote itself.

Perhaps the most obvious short term impact from the vote is for a protracted period of political instability and infighting in the UK, of volatile markets, and regardless of the way in which they voted, a disappointed and angry public. The current situation of no negotiations without triggering Article 50 look like an invitation for years of stasis, but it needn’t be this way.

Here we look at some of the wildcard possibilities emerging in the post BREXIT world.

EEA membership (the Norway model): Although this option minimises the mid-to longer term economic fallout and is likely the preferred option for many pragmatic politicians, it is unlikely to satisfy the public given the notion that the vote was effectively decided on a question different to the one that was asked. Immigration controls would not in this event be any stricter, potentially leading to a further schism between the public and its politicians. There are signs that the genie is out of the bottle with regards to legitimised racism and xenophobia – this option would not help assuage this is any way. No matter how people voted, nobody voted for a combination of a) an imposition of slightly higher costs of single market access, b) the surrender of any say in rules that you have to submit to and c) continued immigration levels.

The end of the Union: With Scotland voting ‘remain’ logic has it that a break-up of the 300-year-old plus union is more likely since independence would allow for Scotland’s people to stay in the EU. Complicating matters are political circumstances in some EU countries regarding restive regional secession – such as Catalonia from Spain that would block any attempt for a trailblazing Scotland to secede and (re)join the EU. Since any one member can veto a new country joining the EU, this path would appear non-viable. In such an event, Scottish attempts to block BREXIT would strengthen – perhaps by forcing a Parliamentary vote (since the public vote was not legally binding) that would ostensibly indicate a preference to remain. Protracted legal wrangling would almost certainly ensue – and if a skilful politician of unity does not emerge, maybe there would be impetus for English nationalists to seek divorce from Scotland in a new referendum on the state of the UK.

Referendum 2.0: The EU certainly as a history of re-running referenda in which the ‘correct’ result was not attained. Such a decision here would almost certainly render a complete redrawing of the UK political scene. The semantics of openly defying a public referendum and promise of a Prime Minister to act upon it, no matter how badly constructed the original referendum and debate was, would possibly cement a very real divide in UK society. The possibility of newly formed political parties impacting the scene would be significant in this scenario. Future referenda that are cognizant of both the UKs democratic system (as a Parliamentary democracy) and the concerns of its public cannot be dismissed but a like-for-like replay is as close to inconceivable as is possible.

A vengeful EU: Given the urgent need to prevent further disintegration by setting an example, the EU could become hostile to any form of negotiations – effectively forcing a somewhat reluctant UK to enact Article 50. This could erode any remaining good will and render it more difficult to salvage mutually beneficial economic ties. The UK economy, whilst slowly orientating towards increased ties in the emerging world or Commonwealth, would suffer a sharp and perhaps lasting recession as the source of over half of its foreign investment is effectively shut off. It is also possible that Article 50 will be postponed indefinitely by the UK government – perhaps encouraging the EU to explore measures that legally exclude the UK from aspects of the European framework, including services. The disorderly divorce that this scenario represents would almost certainly handicap the British legal system and consume its political system for years, as little time would be given in preparation for sorting out the swathes of British vs. European law issues. This would in turn maximise instability and represent a worst case scenario for global business.

A reformist EU: None of the above scenarios would achieve two goals that Britain must currently try to satisfy – unify a divided society and preserve access to the single market, which even leading Brexit advocates wish to retain. In hindsight, had Mr. Cameron been given an emergency brake on immigration of some sort at the EU summit a few months back, the whole scenario of Brexit could have been avoided. This opportunity was plainly missed and the EU is unlikely to radically one of the four pillars on which it stands – namely the freedom of movement. Whilst the EU has the ability to act with considerable speed and assertiveness, as any Greek may attest to, the possibility of populist risings in France and the Netherlands that would surely seal the fate of the EU, demands a new agility. If the EU can demonstrate flexibility and a renewed sense of democratic accountability in the face of this crisis, then perhaps the groundwork is laid for a Parliamentary vote to end the current impasse and reign in the worst of the economic and social fallout.

The end result: Current indications seem to suggest EU pressure for a quick BREXIT yet a number of drivers explored above are set to complicate this. If nothing else, compromise would seem a very European political skill although this calculus may change in the face of an EU that is fighting for its very existence. Even so in this scenario, BREXIT does not happen since the possibility of others following the UK’s lead is deemed too high a risk. This does of course, require a public figure with requisite skill and widespread public support on the UK side to navigate a tightrope style deal and an EU realisation that reform is needed urgently. Both of which are far from guaranteed. However, the wildcard has already happened – nothing that follows should be considered much of a surprise. The UK public seemingly voted on a different question to the one that they were asked; perhaps they will receive a different outcome to the one borne out in the results

The Future CEO

With the pace of change increasing in the aftermath of the global financial crisis, more than ever CEOs need to be visioning and driving a strategic plan for their company. This will increasingly involve the reinvention of their business model and displaying a tech savvy that blends people with technology in smooth, agile and proactive processes.


The future pipeline of potential CEOs would seem at least well positioned to address the technological aspect. Both CIOs and CMOs – two of the most technologically involved positions, are heavily touted as possible steeping stones to the number one position. Technology – ironically enough, may help alleviate some of the stress on CEOs to better enable them to address these fundamental core issues. Whilst CEOs spend 1 percent of their time on things they need to accomplish, according to Professor Richard Jolly, the ideal is around 50 percent[i]. However, it is estimated by McKinsey ‘…that activities consuming more than 20 percent of a CEO’s working time could be automated using current technologies[ii].’ This would suggest the digital divide between CEOs evident now is of critical import; those with a better strategic understanding of how automation can increase productivity and free high-end professionals from some of their more mundane tasks stand to benefit more than those that do not. A bifurcated standing of CEOs, regardless of their position within the emerging networked economy, would appear in the offing and arguably, only the fittest will survive.

It could therefore be argued that in addition to the ability to question, reimagine and redesign a company’s business model on an ongoing basis, an awareness of how technologies can a) support this process, and b) enable the emergence of new competitors, opportunities and markets, is central to the future CEO role.

Given the need for agility, transparency and global experience, future leaders will likely also need to demonstrate strong communication skills, a worldwide range of experiences and perhaps even an entrepreneurial record. They will be increasingly diverse too. It is likely that western multinationals in need of a new strategic positioning will turn to emerging multinationals for future CEO and C-Suite positions, whilst 30 percent of the top 2,500 CEOs around the world will be female by 2040 according to a report by Strategy&.

The pace of change in the world of work – driven by new work structures, automation, the erosion of market boundaries, new competitors from other verticals and shifting consumer preferences all demand a new type of company and a new type of CEO to lead in the new normal.

[i] https://www.entrepreneur.com/article/242590

[ii] http://www.mckinsey.com/business-functions/business-technology/our-insights/four-fundamentals-of-workplace-automation