Published on the 23/10/2019 | Written by Jonathan Cotton
Australia’s in decline in global economic rankings, so what are we going to do about it?…
Unfortunately, there’s now plenty of data to back the claim that in terms of global economic rankings at least, Australia is in decline. CSIRO’s 2019 Outlook report said explicitly that ‘Australia’s future prosperity is at risk unless we take bold action and commit to long-term thinking’.
Similarly, when releasing the Australian results of the IMD World Digital Competitiveness ranking, CEDA CEO Melinda Cilento said the research showed that Australia needed to make changes if it was to keep pace with other economies.
“The results highlight that we need a broader national community discussion around the importance of R&D, investment in technology, and tech skills and how the benefits of these flow back to the community,” she said.
“It’s legacy mindsets, legacy approaches, legacy opinions that are the real inhibitors.”
It all makes for grim reading, but it’s a reality worth facing head on says Adapt’s senior research strategist Aparna Sundararajan.
The market research company recently presented its top strategic priorities for Australia, which finds swelling competition, dysfunctional cultures and conservative mindsets frustrating the effort of Australian businesses.
“There is a lot of aversion out there when it comes to experimenting, says Sundararajan. “Everyone’s in a ‘preservation’ mindset and looking after what they have. Since the global financial crisis, companies have become more risk averse, and are generally not going out and investing in new things.
“Once the technologies or concepts have been proven and businesses know they’re going to get bang for their buck, they will invest, but the appetite for R&D is not there.”
Given the conservative environment, and that innovation is generally dependent on IT, how is that affecting digital practitioners?
“Too often digital professionals are expected to really show ROI in the most traditional of senses, which just doesn’t make any sense for new technologies.
“The way new technologies work, you start, you give it six months, then you pivot and improve on it. It doesn’t happen that you’re ‘done’ in one year. That’s a very old manufacturing-type approach that doesn’t work for new technologies.”
Ex-Gartner analyst and director of strategic research at Adapt, Matt Boon says that there’s often a disconnect between high-level management and digital reality, leading to ‘tension and friction’ over innovative approaches.
“When we surveyed chief digital officers and leaders there was a much greater appetite to invest in new tools, especially collaboration tools, to improve communication and the ability to collaborate across the organisation.
“Traditional IT departments – at the CIO level for example – do tend to be internally focused. Eighty or 90 percent of CIOs told us that the major influencers of their digital strategy is their own IT team. That’s too much of an internal focus, rather than an ‘outside in’ view.
“The whole challenge that we have is this: We talk about legacy systems, legacy IT, legacy infrastructure, legacy software as being an inhibitor to innovation. But even more than those things, it’s legacy mindsets, legacy approaches, legacy opinions that are the real inhibitors.
“You get new IT people coming into organisations and they are constantly fighting upwards to be heard to make the changes they know need to be made.”
So what about those top strategic priorities? Adapt says that 2020 will be the year when Australian businesses put their customer retention strategy at the heart of their business plan.
“The cost of acquiring customers is going up and the amount of attention that a customer has for a particular brand is declining every day,” says Sundararajan. “And it’s only going to decline further in a world that’s completely connected 24/7.”
Boon puts it in starker terms.
“Organisations cannot afford to lose customers. At the end of the day, business priorities are all about profitable revenue growth and existing customers are typically more profitable than new customers because they’re more likely to spend money, you don’t have to invest as much in acquiring them.”
“But you have to have those processes in place so that they feel valued and you’re getting value from them as well.”
And therein lies the immediate challenge. Just how does a business ‘earn customer loyalty’ in 2019?
“When you talk about customer experience, you’re talking about convenient, connected and consistent experiences.
“You have to engage with the customer wherever they are, however they want to be engaged, which means you need to offer personalised, in-the-moment experiences created for them. That means tapping into their problems and offering solutions exactly when they want them. And it means making sure that each and every one of those experiences is highly relevant to the customer.”
But not too relevant.
“You have to be smart, but not creepy,” says Sundararajan. “Both privacy and security is going to be one of the differentiation factors for businesses. Because the best relationships are based on trust. If that trust goes, then the customer is going to go too.”
Adapt’s top strategic priorities for Australian businesses in 2020:
- Earn customer loyalty
- Build a data-driven business
- Architect a secure and resilient organisation
- Drive operational effectiveness
- Think like a technology company
- Tear down organisational silos
- Embrace dynamic budgeting
- Develop a people first organisation
- Encourage and build a diverse organisation
View Adapt’s presentation here.
