The 4 Characteristics Canadian Businesses Need to Succeed in the Digital Economy
- Digital transformations that improving business processes’ precision, speed, scale and personalization are those that lead to true competitive advantages in today’s post-digital economy.
- The majority of companies are not ready for the Fourth Industrial Revolution. A lack of expertise and lack of education are the top barriers that prevent Canadian companies from adopting innovative technologies.
- Employers have a critical role to play in preparing their current workforce for the jobs of the future. Companies should prioritize putting a budget in place to re-skill and up-skill their existing workforce and should partner with digital companies that can help co-create training programs for their workforce.
Canadian companies that are planning their digital transformation must focus on improving these four key characteristics of their business processes: precision, speed, scale and personalization.
According to Salesforce’s June 2019 report, “Future Ready: Advancing Canadian Business in the Digital Economy”, Canadian businesses that have significantly increased their tech use are twice as likely to report strong growth over the last three years than those companies whose tech use has remained stagnant.
What are the factors that contribute to the correlation between technology use and corporate growth, and how should Canadian companies adjust their strategies based on this?
If the report shows anything, it’s that in a post-digital economy—where mobile, social, cloud and analytics are the foundations—the competitive advantage comes from investing in a transformation that leads to precision.The report highlights that 44% of the leaders and executives who have adopted a digital transformation strategy in their core business have improved their customer data management across systems, increased customer engagement, and accelerated the expedition business processes. These improve overall operations and enable companies to connect with their customers in more meaningful ways.
The next premium is related to speed. This is a company’s ability to boost analytical and decision-making abilities by providing the right information at the right time; moving data to insights; moving insights to measurements; moving measurements to actions, and moving actions to corrections—as fast as possible. When a service or product slows someone down, it degrades the customer experience. Companies should ask their boards: “How can we leverage emerging technologies to create a continuous flow that minimizes friction in our customer’s journey?”
The common denominator of companies who invest in technology is that they are thinking about one thing: flow. Once a company establishes it, the priority moves to scaling that continuity of flow in the customer’s journey. Finally, technology can be leveraged to improve the customer experience, meaning personalization.
“In a post-digital economy—where mobile, social, cloud and analytics are the foundations—the competitive advantage comes from investing in a transformation that leads to precision.”
Think of the way Amazon’s new brick-and-motor stores have no checkout lines and offer their customers free sodas. Or consider Disney’s magic band that customers wear to purchase food, drinks and souvenirs. And, customers can now use their smartphone to open their hotel room at Marriott Hotels without the need to check-in first or set their preferred temperature since the Nest thermostat already sets it based on previous visits.
The beauty of digital transformations is that as a company digitizes, it can get to the grounded truth. Surgeons often speak about this “grounded truth”, which means to analyze data in an environment where it’s a life-or-death scenario.Most business lines that make predictions typically rely on experience and gut feelings, but this approach is becoming inadequate. To make decisions in today’s digital economy, business leaders are increasingly turning to computer algorithms, which perform step-by-step analytical operations at incredible speed and scale. This brings them to the grounded truth.
So, my advice to Canadian companies that are planning their digital transformation is that they must focus on improving these four key characteristics of their business processes: precision, speed, scale and personalization.
While 81% of Canadian business leaders believe that Canada is a technologically innovative country, 52% also believe that we are lagging in technology adoption.
To what do you attest this gap between innovation and adoption? What must be done, and by whom, to bridge this gap?
First, it’s important to recognize that regardless of the size of a company or its success, no one is immune to technological disruption. Since 2000, 52% of Fortune 500 companies have disappeared.A decade ago,there was only one tech company among the most valuable top 10 companies by market capitalization. Today, it’s seven out of 10; all of which are data-driven companies that operate like software companies.
I’m not alarmed by the gap in business leaders who invest in technology. The World Economic Forum (WEF) indicates thatonly 15% of businesses are ready for the Fourth Industrial Revolution, which is the merging of the physical and digital world. Canada is one of the most advanced countries in the world in terms of internet connectivity. It’s also one of the most educated countries in the world; 55% of adults have graduate college degrees. This is a strong advantage to leverage in this context.
“Only 15% of businesses are ready for the Fourth Industrial Revolution, which is the merging of the physical and digital world.”
Now, there are various barriers that prevent companies from adopting innovative technologies, but the top two are a lack of expertise and lack of education. Lack of expertise is one that was noted across the board, regardless of business side or whether a company is a digital native or a digital immigrant, meaning one that’s not born in the cloud, mobile, social or data-driven expertise. A lack of education can also lead to budget constraints. If a company can’t have defensible features and tie its investments in technology to business outcomes, it’s clear why operators and executives have a tough time defending and gaining the budget they need for digital adoption or innovation.
Also, the WEF forecasts a need for 101 days of training from now until 2021 for individuals to gain the sufficient skills to succeed in the digital economy and the Fourth Industrial Revolution.It’s imperative that senior executives and business leaders join the conversation on the future of work and ask their boards: “Do we have a budget in place to re-skill and up-skill our existing workforce? Are we collaborating with our partners to co-create value to understand the impact of new technologies? Are we funneling robust investment in companies that are digital trailblazers?”
How do you see the future of work in Canada changing with the exponential advances in digital transformation to the work environment?
Along with technology advances, a company’s workforce must continuously evolve, using ongoing learning and organizational transformation to adapt. Which is why, regardless of the profession—whether it’s marketing, sales, customer service, IT—the most important skill to have in a digital economy is to be willing to learn. A person should fear less about being replaced by a robot than being replaced by someone who’s efficient in technologies like AI, social media, cloud and analytics.
In the debate around automation, there will definitely be a sizeable impact on deterministic processes or repetitive work. The WEF forecast on the job landscape projects that in three years, smart machines and algorithms have the potential to displace around 75 million current jobs. The declining skill sets employers will seek include manual, dexterity and endurance, precision, memory, management of financials, and material resourcing.
At the same time, the forecast projects that 133 million new jobs will emerge. Valuable growth skills in the digital economy point to analytical thinking and innovation, active learning, critical thinking and complex problem solving.
“The most important skill to have in a digital economy is to be willing to learn. A person should fear less about being replaced by a robot than being replaced by someone who’s efficient in technologies like AI, social media, cloud and analytics.”
We see this growth first-hand at Salesforce; 76% of our Trailblazer customerswho have digitized their business lines with AI, for example, report that they are increasing their workforce, not reducing it. That’s because AI-powered solutions have helped them understand productivity gains, remove blind spots, and create an environment where creativity, critical thinking, complex problem solving, and design thinking can be leveraged.
For the first time this year, Salesforce hired a Chief Ethical and Humane Use of Technology Officer, a position that was not on any company’s radar even two years ago. But with accelerated enhancements in machine learning, deep learning and AI, and when algorithms can decide on 3,000 data points simultaneously—a far greater capability than any human being—it’s the right time to implement methods that eliminate harmful biases, explain our logic, explain recommendations, and evaluate whether the innovation will serve humanity and improve peoples’ lives. In an algorithmic economy, equality and inclusivity are vital, because algorithms essentially codify opinions.And so, codified opinions reflect their creators in a myriad of ways, both conscious and unconscious.
Hundreds of jobs with new titles will continue to surface as in-demand jobs—I experienced this myself. When I started my career, I never thought I would ever hold the title Chief Digital Evangelist. It didn’t exist. And 15 years ago, did we have drone operators? Did we have mobile app developers? Did we have top computing architects? Did we have social media managers?
To plan for a digital transformation, I recommend that business leaders and executives read Human + Machine: Reimagining Work in the Age of AI by Paul Doherty and James Wilson, senior technology leaders at Accenture. The book highlights cases across multiple sectors where there’s no question that the future of work will include people working with machines, but the augmented intelligence and the efficiency gains of machines and humans will create job titles that don’t exist yet.
What must be done in Canada to build on its leading position in AI? What roles must key stakeholders play?
For some, Canada is only second to Silicon Valley in terms of density of thought leadership and expertise for AI in the digital economy.The Canadian government knows it holds this leading position, which is why it continues to foster a flourishing ecosystem. In 2017, it launched a five-year $125M Pan-Canadian Artificial Intelligence Strategy. This strategy further builds on the ecosystem in Canada by increasing the number of highly skilled researchers and graduates, enhancing research capabilities and discoveries through collaboration across three centres of excellence, and demonstrating global leadership around the economic, ethical, policy and legal implications around advancement in AI technologies.
“For some, Canada is only second to Silicon Valley in terms of density of thought leadership and expertise for AI in the digital economy.”
At the heart of this strategy lies a partnership between the Canadian Institute for Advanced Research (CIFAR) and the three centres of excellence, namely the Alberta Machine Intelligence Institute (AMII) in Edmonton, the Vector Institute in Toronto, and the Montreal Institute for Learning Algorithms (MILA).
The Vector Institute and other consortia have also invited businesses to partner and help create an ecosystem that can help accelerate AI growth and adoption. This is a vital strategy to Canada’s success in its digital transformations because no company of varying size is immune to the impact of AI-powered applications. AI-driven technologies will continue to integrate into the everyday lives of people around the world in meaningful ways.
So, businesses, government, academic institutions, startup ecosystems, all have to work together because the innovation velocity, meaning both speed and direction, is unprecedented. However, even if every stakeholder has to play a role, it’s the business sector that represents the greatest platform for change. If a company is standing still and falling behind and thinks its status quo can bring it to the next phase, it’s ripe to be disrupted.
Many technologies, such as AI, VR, 5G and more, are revolutionizing the business landscape and many industries. Which technology are you most excited by when you envision Canada’s future economy?
I’m most excited about the merging of AI-powered solutions and e-commerce. The two together are revolutionizing the business landscape.With AI,we can now achieve customer personalization with previously unimaginable precision and at a vast scale.
In fact, the report highlights e-commerce and CRM ranked second and third in terms of the most important investment and the highest growth of adoption in the next three years. Today, e-commerce projections represent 10% of commerce. In a decade, it will climb to about 50%. And some companies resolved “The Last Mile”, meaning delivering products to a customer within 24 hours or less is now more possible than ever before.
“Even if every stakeholder has to play a role, it’s the business sector that represents the greatest platform for change. If a company is standing still and falling behind and thinks its status quo can bring it to the next phase, it’s ripe to be disrupted.”
This reduction in friction, combined with the ability to deliver a product knowing gender, size, colour preference and make recommendations based on purchasing history provides a powerful individually-tailored brand experience to customers. That’s why it’s imperative for every storefront to have a digital twin of itself and have an e-commerce platform. Over the past three years, e-commerce has become the number one revenue source for our customers who have integrated it. Itcomes back to a continuous flow, removing friction and the ease of doing business. Customer experience has now become as important as the product itself.