Australian companies don’t have another 26 years of easy growth ahead of them. That’s the opinion of Paul Shetler, Stone and Chalk’s first expert in residence and former Chief Digital Officer of the Digital Transformation Agency.
“You don’t have another 26 years of easy growth. It was a good ride but I think that’s ended,” Shelter said during a presentation at Stone and Chalk in Sydney last week.
That’s because the internet has given rise to a competitors who see the opportunity to break existing business models — splitting the world into predators and prey.“They want to get your customers and they want to compete on terms that they have set, not the terms that you’ve set that you’re comfortable with,” Shelter said.
At the same time, customers only care if you’re meeting their lofty expectations.
“This is very different to what Australian management teams have had to deal with over the last 26 years of prosperity, where it was really fairly easy to get promoted as the tide kept on rising.”
Shetler argues Australian management is facing its first real test in two and half decades, adding “no market has been immune to this.”
“Like Jeff Bezos said, your margin is his opportunity and what they want are your customers, and they’ll get them by providing better services, more quickly and responding in real time to what they learned about them and their needs faster than you can. That’s the whole model.”
To adapt, Australian businesses (particularly the ones that pre-date the internet) need to quickly digest the fact that the ground has shifted under their feet and they’re now competing against software companies, Shetler said.
That means they need to start reacting in real time, insourcing their core business – ie. not handing it over to a vendor on a contract – and upskilling their staff.
“Most large brown fields have deskilled their workforce due to outsourcing and not taking responsibility for what they’re actually delivering. [They’re] not training their people up,” Shetler said.
“Uber, Amazon, Google, Facebook, Twitter, Apple, I don’t care who they are; they don’t outsource their business. They own it because they have to operate in real time. They learn about what their customer needs are in real time. They track you. They follow you. They see where you’re going. They see where you fall off the customer journey. They do their research.”
Shelter also issued a warning on relying on innovation labs or hackathons, which may surface interesting ideas which ultimately prove difficult to productise and update in real time. Instead innovation needs to be company wide — not just within a designated part of the business.
Similiar digital is about much more than the user interface.
“Treating digital like it’s the front man and nothing else is not going to solve your problem. Because the problem goes all the way through your company and your product is not just user interface.”
To enable to the changes required to re-wire organisations to respond to their users in real time, leadership is essential.
“You’ve got to have political will at the very top of the organisation that is going to be willing to drive the change,” Shelter said.