Insight
Technological evolution – the challenge for business leaders
October 2019
A great deal has been written about how automation and artificial intelligence will threaten traditional business models. Much of this focuses on the technical details of various products, or presents a doomsday perspective. However, as business leaders, you need to steer the conversation in the right direction and focus on things you can control to navigate successfully through technological evolution.
Here are some of the things your business should consider:
Establishing a change mindset
Before you can create the right mindset in a business, there are a few myths to debunk. Chief among these is a pervading pessimistic view of a world where technology makes people redundant. This is destructive in many ways.
If your people adopt this view, how can your business possibly implement change successfully? How will you convince bright young candidates to join you? How will you invest in your business with confidence? To counter this, you must be optimistic and promote technological evolution as an exciting time for business. You must paint a picture of a future where people skills and technology come together to build a successful business in which everyone can prosper.
Some experts suggest that a new phase of technological disruption is beginning. I challenge this negative representation and prefer to call it
a technological evolution. Technology has been evolving since the abacus. It’s the pace of change that has accelerated, although not as quickly as we may think. Some viewed the first Industrial Revolution as a threat to people’s livelihoods; this didn’t happen. The reality is that these technologies became valuable tools that improved efficiency. Why will the effect of modern emerging technologies be any different? Ask yourself what developments have happened in your own field of business, that didn’t exist ten years ago, that have now become a way of life. Businesses can, and do, adapt.
Using technology to achieve positive results
Leading your business through technological evolution is not just about implementing new technology. These developments will create opportunities for your business, providing more time to develop new and valuable products and services. Further, the development of artificial intelligence will give you the ability to model and test products and services, and measure the value your business creates for customers. Technological evolution will not only create opportunities, it will help to build competitive advantage and challenge you to
continually re-evaluate your business model.
Reviewing your investment in staff
Technological evolution will, of course, present you with new staffing challenges. Even though more basic processes will become automated, everyone needs to start a career somewhere. Think about your own business. What does the pathway from trainee to qualified professional look like in the future?
You may think the answer is to recruit fewer junior staff members, but will this help your business to prosper in the longer term? Recent years have seen a trend towards outsourced staffing models, buying in staff and services on an as-required basis. However, this has created its own problems. Take Australia as an example, where competition for midlevel staff has become so intense that businesses face increasing costs when trying to attract good quality staff. Further, many firms that outsourced their junior staff requirements now find themselves depending on recruitment firms to fill middle and upper level vacancies because no-one is coming through the ranks to fill the gaps left by people leaving.
I believe the cost of developing junior staff is a necessary and worthwhile investment to create future leaders who can build and maintain healthy businesses.
Engaging with regulators
Government agencies are investing in technology so that businesses can become more connected with regulators. As an example, the Australian Tax Office (ATO) is increasing the connectivity between business payroll systems and its database. From 1 July 2019 all businesses must transmit their payroll data to the ATO every time they process a payroll. This will give the ATO almost live data on employee earnings.
While we don’t yet know how far this connectivity will go, or whether there is a limit to how much businesses will tolerate government access to their information, engaging with regulators in this way may yield benefits to businesses in the future.
Strong leadership is vital
Emerging technology makes for an exciting time for businesses everywhere. At the same time, businesses will need strong leadership to manage the change if they are to thrive in an environment of technological evolution.
About the author
Justin Woods
Sydney, Australia
Justin is a partner of Russell Bedford’s Sydney member firm Camphin Boston. He joined the firm as a cadet accountant in 2000. With expertise in audit and assurance, management accounting, financial statement preparation, self-managed superannuation and valuations, Justin has helped advise and grow family businesses through to publicly listed corporations across a vast range of industry sectors.