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Ignore new technology at your peril

July 07,2016 20:14

Business leaders used to get by without knowing much about technology – they had an IT department to deal with that sort of thing. However, technology products and services now pervade every industry, and businesses that don't understand them are in ...


Business leaders used to get by without knowing much about technology – they had an IT department to deal with that sort of thing. However, technology products and services now pervade every industry, and businesses that don’t understand them are in danger of being usurped. Uber’s impact on the taxi and automotive industries is a case in point. While established manufacturers and car hire firms continued to focus on hardware – the cars and the user experience – Uber’s simple software app linked passengers to drivers, and changed transport forever. By December 2015, Uber, launched in 2009, was valued at $62.5bn (£44bn); Ford, founded in 1903, was worth $55.48bn (£39bn).
Leaders in every sector must now understand not only the technology that runs their business, but also the threats and opportunities that new technologies pose. Yet most do not. An MIT Sloan Management Review survey of business executives found that 63% said the pace of technology change in their organisation is too slow – most cited a “lack of urgency” as the cause.
A recent Guardian roundtable, supported by Cranfield University, explored this dysfunctional relationship between technology and leadership and discussed how they could be more closely entwined. The chair, Wendy Berliner, head of editorial, Guardian Professional Networks, began by asking if technologists make good business leaders. David Carr, strategy director at marketing and digital agency DigitasLBi, who has worked with a number of startups, says their leaders are often “very good at the tech, very good at the product, very passionate and driven” but may lack strategic and leadership skills. “There is a big gap between having a feel for technology and solid business skills,” he said.
GKN group technology president Rob Rickell said it’s extremely rare to find somebody who can be both a member of a board and a technology leader: “We have invested in startup [tech] companies and the first thing you have to do is change the leadership. They are often very unsuitable for leading companies.”
However, the inverse is also true: business leaders with proven track records can be found wanting when it comes to leading technology businesses. Shashi Verma, chief technology officer at Transport for London, believes that some leaders can be scared of technology. The businesses they run “are the organisations that [will] struggle”, he said. “If they cannot harness the power of tech available today, they cannot succeed.”
It was a view that all the technology leaders in the room shared. George Rzevski, professor emeritus at York University and a technology consultant with more than 40 years experience, questioned how anyone could lead a business today without understanding how artificial intelligence, drones and robotic automation affect their business – and how they might adapt to them.
Education came up as a key issue in the discussion. Hema Marshall, head of strategy and sales acceleration at global IT company Cisco, argued that we need to better prepare our future leaders for the twin demands of management and technology. “We have the knowledge and the aptitude, but we don’t have the right attitude,” she said, pointing out that the university system is competitive rather than collaborative, focusing on individual projects such as dissertations.
Paul Clarke, chief technology officer at Ocado, said the problem starts earlier than that, with digital skills lagging behind more traditional subjects on the school curriculum. “Our education system needs a complete reboot,” he said, calling for the inclusion of coding, data literacy, data science, entrepreneurship and financial skills. “We need to think about how we get it right for the next generation.”
However, even if digital skills become core childhood learning, business is still faced with the dilemma of the “Peter Principle” – a theory proposed by academic Laurence Peter that people are promoted to management positions based on their technical excellence in a job, rather than their suitability to manage. Raised several times during the roundtable, the principle (published in 1968) seems to be alive and well in 21st-century organisations.
Verma said he had often seen people promoted for being good technical operatives, despite having little management or business acumen, while Debra Charles, CEO of software services company Novacroft argued that companies needed to have a new promotion track for technologists not interested in leadership but wanting to excel in their chosen specialism. “We need to start looking at the hierarchy of business differently,” she said.
Rickell offered an insight into why day-to-day operatives may lack the objectivity necessary for leadership. The recent transition in aeronautical and automotive manufacturing – away from the machining of titanium and aluminium to 3D printing – was initially resisted by operational managers, he said. “An excellent operator is extremely good at making what we already have,” he said, rather than foreseeing the advantages of radically new technology. Although such workers can be retained and retrained, he suggested, it takes an objective business leader to set such changes in motion before competitors beat them to it.
Rzevski summarised the challenge: “Technologists that are so deeply involved in their technology that they can’t see the world [outside of it] cannot be good leaders. But technologists who are more interested in applying technology to the real world, and are looking at the big picture, can be excellent.” Leaders must therefore acquire sufficient technological knowhow without losing the bigger picture, or becoming too wedded to one product or service.
How, then, can you find or create such a leader? The assembled technology and engineering executives in the room offered some practical answers. In short: the single, all-knowing leader must be replaced by the leader-as-facilitator – somebody who can build an ecosystem of knowledge and skills around them that can adapt and flex as markets change and new technologies come online. “We call it adaptive leadership,” said Mandeep Singh Kwatra, partner, digital transformation, at management consultants Infosys Lodestone UK. “You pick up the right skills and leaders who surface from within the organisation, but also outside the organisation. In today’s environment we need to think as an ecosystem.”
DigitasLBi’s “open strategy” is similar: taking ideas and skills from other sectors – from big pharma to entertainment – to encourage cross-disciplinary thinking. “Cross-pollinate wherever possible” is the mantra, said Carr.
Software as a service was also raised as an example of building an ecosystem: rather than pay for an internal IT department to build, manage and run software solutions, many organisations are now moving to outsourced, cloud-based services that are paid for on a monthly or annual contract. “You just plug into software like you do electricity,” explained Rzevski, “and if you don’t like it you switch to another supplier.”
Having a culture that allows people to be innovative is also key to being able to anticipate and respond to changing demands. Clarke allows his Ocado team to work on pet projects, including in areas that seem to make no sense. “If we only look in the obvious areas, we just come up with the same ideas as other people,” he said. It’s a similar philosophy to Google’s famous 20% time rule – allowing staff to work on their own ideas during working hours – that gave rise to major business successes such as Gmail.
Problems often arise where a business culture is built around a single area of knowledge or expertise, said Cranfield’s Mark Jenkins, professor of business strategy. By constantly “breaking and shifting that culture to allow adaptation to take place” projects such as Ocado’s and Google’s provide a valuable service.
Culture change, especially in large, long-established companies, is easier said than done, however. Sarah Templey, a project delivery manager at global energy giant Amec Foster Wheeler, said the energy sector “tends to be a bit on the conservative side”. Striking the balance between bringing in new technology and not losing the valuable skills and knowledge built up around existing technologies is not always easy, she suggested.
Clarke offered a neat solution: “We call it ‘dry-stone walling’… taking irregularly shaped individuals – those a lot of other organisations maybe can’t fit into their neat, breeze-block structures – and fitting them together.” It is the leader’s job, he added, to assemble the dry-stone wall.
Jenkins concluded with some historical context, noting that disruptive technological change has been experienced before – whole industries have come and gone: “What’s different now is the speed and uncertainty of it. This is where leadership comes in – understanding how technology evolves and adapts, and seeking the opportunities that arise.” Robotics will continue to evolve, he says, but “we don’t yet know how.” Those leaders able to create the ecosystems and diverse teams needed to adapt will be the difference between organisations that thrive and those that become footnotes in history.
Wendy Berliner (Chair), head of editorial, Guardian Professional Networks
David Carr, strategy director, DigitasLBi
Debra Charles, CEO, Novacroft
Paul Clarke, chief technology officer, Ocado
Mark Jenkins, professor of business strategy, Cranfield University
Hema Marshall, head of strategy and sales acceleration, Cisco
Rob Rickell, president, group technology, GKN
George Rzevski, professor Emeritus, York University, Chairman, Multi Agent Technology
Mandeep Singh Kwatra, partner, digital transformation, Infosys Lodestone UK
Sarah Templey, project delivery manager, Northern Europe and CIS, Amec Foster Wheeler
Shashi Verma, chief technology officer and director of customer experience, Transport for London
This content has been supported by Cranfield University (whose brand it displays). All content is editorially independent. Contact Sue Torka (sue.torka@theguardian.com). For information on debates visit: theguardian.com/sponsored-content

Media &, Tech Network,Business,Technology

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