A Q&A with the Executive Team looks at how senior roles are evolving to enable organisations to maximise new technology.
1. How important is technology to our industrials clients?
Technology plays a central role at both a strategic and operational level for all of our clients. Cross-sector, technological advancement is a catalyst for realising more commercial opportunities, reshaping business models to evolve in a new era and increasing efficiencies across supply chains to remain competitive.
In oil and gas, for example, technology is accelerating and optimising oil and gas discovery, leading to extended oil field life.
Elsewhere, automation is creating opportunities for the transport and infrastructure sectors allowing many companies to compete on costs like never before.
The maritime industry is being modernised significantly by the advent of disruptive technology start-ups that are re inventing old processes to meet commercial, and consumer demands.
It’s a time of change and evolution, and crucially progress. In the industrial sectors, which are typically asset heavy with high capital expenditure are not known for a fast pace of change, but it is happening faster than ever before. The global VC market is showing huge interest in technology – 2018 had the most amount of money invested in the highest number of private technology company financing events on record, according to industry trends analyst Crunchbase. If the world of industrials can display its own technological prowess, it should be able to attract a slice of this investment.
2. What are the challenges that businesses’ face here when hiring for senior roles and planning for the future?
Different challenges emerge depending on the ownership and financial structure of any business. For example, family businesses tend to be influenced by tradition and what has gone before; public companies face shareholder risk and issues of investor confidence; private equity backed businesses take a short-term view, which has advantages and challenges in equal measure.
Broadly speaking, asset intense industries tend to be slower to modernise than other sectors and may have historically adopted a “this is how it has always been done” mindset. Standing still isn’t really an option – companies need to continually ask themselves existential questions – what will this business be known for in 5 or 10 years, what will our customers want and need and therefore what expertise do we need, that we don’t currently have? Hiring the right talent into such a business is often key to embracing technology and change, but likewise this has to be recognised internally in order to happen, which is often a catch 22.
Those leaders that look to parallel industries to learn new ways of working, as well as those that are willing to invest in consultant expertise to upskill their own knowledge on what talent they need, tend to better lend themselves to evolution and progress. Markets are (or arguably have already) transitioning from production led to demand led, the result needs to be a change in strategy and outlook.
3. Would energy and industrials companies benefit from having more tech-savvy people on their boards?
In a word, yes. More CTO’s and CIO’s are certainly being brought on to boards, but this still tends to be the domain of technology companies. More broadly it’s about hiring, and training, individuals at a senior level that can identify the benefits of technology and how it could create opportunities for the business. Those with technology backgrounds are, by nature, problem solvers. They may be better able to identify solutions through the advent of software, for example than a non-technology oriented person is. But boardroom perceptions don’t always complement priorities, according to CIO UK. While more than half the CTO’s and CIO’s they interviewed said the board saw technology as primarily a way to improve business, they are often not as valued for promoting innovation and strategy. Some 21% thought the board viewed technology as fundamentally an operational business process. Only 2% said their board felt the technology department was a home of innovation.
The growth of venture capitalist investment in technology companies has also increased the availability of knowledge on how technology can transform business. Investors are hard wired to think about the opportunities technology can bring which filters into the management team and boards. According to the Tech Nation Report 2019, investment for high-growth digital tech firms in the UK for example grew 61% between 2017 and 2018 – driven in large part by ambitious UK tech scaleups (tech scaleups delivered the majority of all tech investments in the UK in 2018 – £5bn of £6.3bn). Indeed it goes on to say that the UK tech sector performed particularly well in investment last year. In 2018, the UK managed to attract 5% of global high-tech scaleup investment, placing it fourth in the world – ahead of Germany, France and Sweden.
4. What’s your advice for the board or senior management of more traditional companies and organisations that are trying to either catch up with or get ahead of digital transformation?
A saying that we like to use is ‘widen the gate, don’t lower the bar’ – this means we encourage our clients to explore the opportunities of digital transformation, and think laterally while doing so, but not at the expense of their core proposition. Any advancement must always align and support their core business and therefore commercial value.
It’s also important to always think about the end user – whether that’s a client or consumer – and what they, ultimately, want. Understanding what others are doing will help decide on appropriate action. In the current market, where companies face similar dilemmas, trying to define their future in an environment of constant change is not easy. Collaboration and using external consultants can provide a different lens through which to understand and approach disruption. Be open to hiring for a different core competency than you may have done previously.