By Dr Gavriel (Gav) Schneider >>

WE HAVE ALL been disrupted by COVID-19 and the way we do business has changed forever. Now it’s up to us, as to whether we are able to produce some positive outcomes from these challenging times or not.

Regardless, of the challenges we have all faced (at different extremes) we have within ourselves, the ability to thrive, no matter what the future holds. But (and it’s a big but), if we continue to do the same thing over and over again while expecting a different result, we are almost guaranteed to be disrupted ourselves.

COVID has created a unique opportunity to level the playing fields somewhat, in that we have all been disrupted and made uncomfortable to one degree or another – and as uncomfortable as it has been, (and will likely still continue to be for some time), this is often where the best opportunities lie. 

MAKE A START

So where do we start? In order to drive positive outcomes, it’s important to understand where we are currently.

Experts have stated that we are now entering the 5^th Industrial Revolution, which focuses on leveraging ‘human capital’ (our people, the potential and resource that we, as people, arrive with and develop), combined and supported by all the benefits that our technological advancements bring.

In terms of the human capital, we are starting to see signs of the need to prioritise and put the ‘human element’ at the centre of our organisations. We see it coming through in Royal Commission findings (especially around areas such as risk culture), we certainly see it in the Bushfire Royal Commission, looking at community engagement and response; and we see it in a myriad of other examples – not least of which is COVID, where the human element has been elevated even beyond global economic well-being.

What makes things so different now is the increasingly co-dependent and integrated link between technology, systems and human capital, and their need to work together at a pace that has never been demanded or required before.

OLD BUSINESS MODELS NO LONGER FIT

Regrettably, many Australian organisations are still built on business structures and models that were designed for the previous era(s) – most of which rely heavily on red-tape and outdated, cumbersome systems and procedures.

Because of this, these organisations are struggling to adapt and keep up in such a disrupted business landscape.

This is primarily as a result of our comparatively highly regulated  and compliance centric approach to business where, for the most part, Australian businesses and government bureaucracies have not been looking around and forward, and have instead been dominated by risk aversion, over-regulation and an outdated position.

This has not only made things difficult from a strategic and operational perspective in this brave new world, but has also made us non-competitive in areas such as manufacturing – and we see the consequences of this with off-shoring.

To add insult to injury, aspects such as reactive, hyper-conservative, blame-based or compliance-focused cultures have made adaption even more difficult, especially in larger organisations.

HOW TO DO ‘HOW TO DO IT’

It’s not all doom and gloom though. Many business leaders actually feel these frustrations every day but find it difficult to articulate, and even harder to action.

As it has been described to me by many a senior executive: We know we need to do things differently, to drive a more strategic, agile and adaptable approach but how do we do it?

Outdated governance models, such as the Governance, Risk and Compliance (GRC) approach, no longer work effectively in a world that requires agility, adaption and innovation to be built into our systems and people.

So in order to thrive in a world where uncertainty, complexity and ambiguity are now the norm, we find the golden key embodied in a new approach – the Presilience[1] Approach [Presilience is a is a registered trademark of the Risk 2 Solution Group].

We need to move past the perceptual barriers and outdated compliance-based, reactive approaches, to a new way (which doesn’t throw the proverbial baby out with the bath water), which merges the best of the old with the best of the new.

In essence, Presilience is an approach that focuses on integrating three key aspects to create enhanced productivity. These are:

• Enhanced Decision-making / Robust Risk Culture;
• High Performance (including high productivity);
• Effective Leadership.

It is important to note however, that Presilience is not about “out with the old, in with the new”. It’s not about ignoring aspects such as compliance (which would clearly be disastrous).

Rather, it’s about accepting that there is a maturity journey we should all be on. To better explain this we like to focus on what we call the Presilience Maturity model. The model highlights three states of operation or approaches that we need to look at for our businesses to evolve and grow:

• Compliance – this is the basic minimum we need to operate in any given sector. If an organisation is compliance focused only it will be highly vulnerable to rapid changes and be very slow to adapt.
• Resilience – the next step up is a focus on resilience where it is accepted that things could go wrong, but we are prepared for this with the aim of trying to return to business as usual as quickly as possible. The resilience mindset is a great step forward from that of compliance but is still defensive and negatively biased by nature.
• Presilience – The optimal state is that of Presilience. This is where we incorporate the best aspects of compliance and resilience, but Presilience focuses not only on the opportunities to bounce back more effectively when things go wrong, but also constantly on positioning ourselves and our businesses to adapt, innovate and improve wherever possible

WHY PRESILIENCE WORKS

Essentially, the Presilience Approach works on a building blocks method that focuses first on the individual, then at the team level and finally at the organisational level. Only by taking this kind of approach – one which focuses on the individual as a part of the whole – will we gain a genuine societal benefit – one resultant from more resilient and productive businesses.

The goal should be to embed these behavioural characteristics in ourselves and everyone who works with us and strive to have them inbuilt into our systems and processes.

We must look at the systems in play in our organisations and ensure that our governance structures are practical, well thought out and do not become roadblocks to innovation and adaptability.

It is possible (and in fact necessary), to be both compliant and adaptive at the same time, but while it’s not easy in an over-regulated environment, it is possible.

The single biggest opportunity for Australian business to grasp is that of Presilience.

As business leaders, let’s use the disruption of COVID to build Presilience in ourselves, our organisations and ultimately our society, so that we are better off for this experience.  

 Dr Gavriel (Gav) Schneider is CEO of the Risk 2 Solution Group and the program director of the Australian Catholic University’s (ACU) Postgraduate Program in The Psychology of Risk. [1] Presilience is a registered trademark of the Risk 2 Solution Group.

By Peter O'Halloran >>

THE GLOBAL SPREAD of COVID-19 has had seemingly unimaginable consequences on business. Entire industries have been shut down. Workforces have been sent to work from home. And many businesses are scrambling to shift their operations online.

It’s kind of ironic that as the world slows down and stays indoors, how quickly businesses respond to the impact of the coronavirus is critical.

But speed has always been a competitive advantage in business. It’s just that now the stakes are much higher. Today, speed may be the thing that keeps businesses afloat. 

Albert Einstein famously said, “Imagination is more important than knowledge.” And businesses sure have to be imaginative right now, which leads to the question: what if technology could work as fast as the imagination?

Why is speed important right now?

Even before the coronavirus, organising for speed was important in today’s consumer market. With new technologies, trends and ways of shopping, the landscape was changing rapidly.

But how many times has a great idea just taken too long to implement? Many an idea quickly drops in appeal to the Innovator audience, then Fast Follower, and even Laggard. 

Changes are now light speed. Consumer behaviour has rapidly changed, government policies are constantly shifting in reaction to the crisis and there’s clearly no such thing as business as usual. Speed is everything in this current market.

But rather than something to fear, organising for speed can be an opportunity.

We need speed to market

Businesses have the opportunity to quickly learn what many start-ups and businesses challenging the status quo already know – embrace disruption. The accelerating pace of technological change is a creative force and opens up tremendous opportunities, but only for those that get there first.

For example, traditional bricks-and-mortar banks need to get to market fast because they are competing with neo banks that can build and rollout new service offerings very quickly, with lean technology and responsive customer service. It doesn’t matter what kind of bank they’re working in; when it comes to gaining market share, it’s an even playing field and speed is an advantage.

To compete, businesses need to adapt, and the current climate is the time to do it. One large bank recently launched an important customer-relationship-management (CRM) program in record time, for instance. 

During COVID-19, the value of being able to access data and information quickly is being recognised. The demands on technology are high, and those systems need to work exponentially faster.

We need speed to be agile in a volatile world

As this pandemic continues to impact our lives, consumer needs will continue to evolve as we face ongoing volatility and likely a prolonged downturn. Businesses need to act quickly and get the right platforms in place to support these evolving needs. 

It all comes down to being agile enough to respond to changing customer circumstances. This can include accelerating time to market, rapidly prototyping and iterating, and releasing innovations in their minimum viable state, rather than waiting to perfect them.

This may mean offering the same products through a new channel. For instance, Chinese cosmetics company Lin Qingxuan launched a large-scale, livestream shopping event after closing 40 percent of their stores – this led to a staggering 120 percent increase in February sales this year compared with last year.

Or, as is the case for many start-ups, rapidly innovating a new product to meet a new need. Seoul-based diagnostic company Seegene, developed a diagnostic kit for Covid-19 to get results in a quarter of the time. The company used an AI-powered automated production system to produce tests more quickly and now supplies around 80 percent of tests in the country.

We need speed to service customers better

In an online world, consumers are increasingly impatient. In fact, a slow response time is the most common complaint among buyers. Customers want it fast, and they want it now. And they want a customer experience that matches their expectations, or they’ll go to a competitor.

Businesses need to have the systems and processes in place to meet customer expectations – and the faster the better. With online volumes spiking and workforces being disrupted, virtual solutions and AI channels are increasingly critical for maintaining responsive customer service.

We need speed to fail

As businesses pivot, adapt and evolve in an uncertain market, failure is inevitable. Businesses need to be able to fail fast, learn quickly and build better.

Quick, decisive failures save businesses from sinking additional resources into a losing proposition, helps them establish cause and effect, and helps move them towards the end goal goal by ruling out what doesn’t work.

Failure is only helpful when you can learn from it. Data – and the insights it gives – is critical to ‘successful failure’. And data is only useful when it is accurate (there’s no point in being fast if the information isn’t correct or it’s duplicated), compliant (a platform needs to have a compliant back end), secure (in this new market, we need to open the doors a little bit wider, and we need to do it fast. That opens up vulnerabilities so there needs to be rigour in the back end) and accessible (fast, ‘always on’ access for anyone who needs it).

If the current pandemic has taught us anything, it’s that the future will change quicker than we can even imagine. So we need technology that works as fast as our imaginations.

Imagine then, how different things could be.

Peter O’Halloran is a sales engineer for InterSystems, a creative data technology provider. www.intersystems.com

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By Angus Dorney >>

WITH fintechs and neobanks posing an existential threat to the Big Four banks, the incumbents are scrambling to launch their own digital ventures to try to fend off the disruptors – but are they doing it wrong?

Volt, Xinja, and 86 400 are just some of the new digital-only fintechs to clear the largest hurdle to entering our market – receiving deposit-taking licenses from APRA (Australian Prudential Regulation Authority). With the largest regulatory obstacle out of the way, this new breed is poised to change the face of Australian banking forever.

Even with the significant uncertainty from COVID-19 – and there will be casualties and delays in the short-term – the long-term, technology trend is still in their favour. In fact, a recent report from deVere Group indicates that in Europe, which has a more mature Fintech market, COVID-19 has already driven a 72 percent uptick in the use of fintech apps. 

But the competition facing the Big Four doesn’t end there. The rapid proliferation of buy now pay later (BNPL) options has changed the way we spend and almost two million Australians have signed up.

NEW GENERATION USERS

With both neobanks and BNPL, Gen Z and Millennials are the largest users. This cohort is set to become the economy’s biggest spenders – particularly in the face of an ageing population.

Again, even with the current uncertainty, as the banks look toward the future, they see for the first time in their history a world in which real competition exists. 

One advantage: they still have strong balance sheets that they can leverage to respond decisively to this emerging player. The question is can they actually leverage this strength?

In a bid to compete with the likes of Afterpay and Zip Co to enter the BNPL sector, the Commonwealth Bank recently invested $300 million for a 5.5 percent stake in Swedish BNPL company Klarna. 

While many are lauding Klarna’s entry into the market, given its lack of merchant fees and the ability to use the service anywhere through its ‘Ghost Card’ feature, the question has to be asked: why did Australia’s largest bank have to buy innovation?

And why did it have to buy that innovation from overseas?

AFTERPAY CHANGED LANDSCAPE

It’s worth noting that CommBank could have bought Afterpay many times over for that amount when it went public in 2016, seeking to raise $25 million.

Instead of jumping in early, CommBank waited to see if the Afterpay model would work. When Afterpay’s $10 billion plus market capitalisation showed that it did, the bank decided to opt for a ‘buy instead of build’ approach via its investment in Klarna.

Imagine how many digital products or new ventures CommBank could have built with a $300 million war chest? So why didn’t it build innovation? Most likely because the value of building a startup from scratch, especially in a green fields space, is much more difficult to justify and measure using traditional RoI and investment models. Finance and risk departments can readily determine a return on capital when looking at a traditional investment stake in an established company, but they can’t do the same for startups.

VC ADVANTAGES

The approach for successful venture capital (VC) in the technology space is very different. This philosophy is about placing several, well-calculated investments/bets across different startup businesses.

As the Harvard Business Review has vividly demonstrated, some of the most successful venture capital companies see only a handful of their investments bear fruit, but the return on the most successful investments far outweigh the loss on the duds.

This approach simply does not fit with a traditional enterprise investment model.

CommBank seems to understand that there is also value in the ‘build’ a startup approach. In recognition of the wisdom of not putting all your eggs in one basket, it has partnered with Microsoft and KPMG to launch its fintech venture capital play, X15 Ventures.

This now means all of Australia’s Big Four have separate innovation arms. Whereas Westpac, ANZ, and NAB aim to buy innovation through their ReInventure, ANZi, NAB Venture VC funds respectively, the ‘yellow bank’ hopes to take a more hands-on approach.

Through X15, CommBank aims to manage, rather than buy, innovation. By taking a larger initial stake up front and providing the platform and operational support needed to scale – with all the transactional infrastructure, analytics, and compute power that entails – the goal is to bring 25 new ventures to market in the next five years.

USE VERSATILITY

Frankly, this is where the real returns are. Enterprises need to start building now despite institutional risk aversion and both internal and external headwinds.

Big enterprises can build innovation and build it well, but from our experience they need to do three things:

Explore new financial and risk models to justify the investment. Once they’ve recognised this value as measured by a different metric, they stop clinging to traditional investment and risk management models that only hamstring new ventures. For example, we have supported a company in property development who is looking to leverage their massive knowledge to develop a unique property technology (or ‘prop’ tech) that can be sold around the world, creating a multi-billion dollar business from one without a single dollar of revenue.  

Get out of their own way and find out how to short-circuit the politics, culture, and bureaucracy that can cause every single dollar spent to be questioned to the enth degree – even though the figures invested when building are always a fraction of a percent of the figures thrown around when buying.

Avoid simply turning to another big enterprise to outsource the development. If you want to build a startup technology you need to bring a startup mentality with superb, not outdated, technical chops into your business. We need to end the era of one big enterprise trying to help another big enterprise create a small and nimble one.

We’ve seen incredible value unlocked when these three things have been done. More enterprises should be doing this now, especially in uncertain times when every dollar should be well spent, going lean and spending fewer dollars to grow something you can control, especially when it has a big upside, is the safer and more profitable bet.

Author Angus Dorney is co-CEO of innovative Australian cloud service company Kablamo.

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By Leon Gettler >>

REMOTE working will change workplaces and the world.

Some companies are doing it very well and Australian software vendor LiveTiles is leading the pack.

The born-in-the-cloud company has been doing remote working since it started four years ago. Back then it was operating in six countries with 20 people.

Now LiveTiles has its global headquarters in New York City and has 19 offices in eight countries. It is dispersed across the world, everywhere from Switzerland, Netherlands, Denmark, Ireland, the US and of course Australia.

“From our perspective we had to, whether we liked it or not, work remotely, work flexibly, and I like to think we are best practice in our class,” LiveTiles co-founder Karl Redenbach told Talking Business.

“We are also used to operating in strange time zones.

“One of the secrets to our success is that, from day one, we have been happy to work flexibly with all our employees.”

MAKE IT PERSONABLE

Mr Redenbach said LiveTiles has simple rules and techniques in place for working remote when it comes to dealing with customers, to make it as personable as possible. 

The number one rule for its employees is to use video. It is also sharing desktops and remote sharing.

This can also include taking control over clients desktops, iPads and phones and showing them how to use the software.

LiveTiles is also working closely with the elderly who are not used to computers or websites. This is critical for people who might be quite isolated

“What we tried out in Brisbane, and it’s gone really well, is that we have been able to have not only this face-to-face connection with the carer and the elderly person, but actually help them jump online and show them. We do this by sharing their computer screens and we help them click through the government websites and information websites and key in information that they didn’t even know how to get to – because they’re not used to using this technology.”

Mr Redenbach said this was the most challenging time for him and other tech leaders.

There were some big issues. The first was health – and people’s mental health when they are isolated.

One of the key innovations created by LiveTiles was a WhatsApp group providing people with the latest government information.

“The other thing is, how do we go about supporting the community? We’ve been lucky in our businesses in that most of our businesses have had some sort of remote working,” he said.

“And a lot of our businesses are used to working outside of a traditional office setting, so we want to try to impart the knowledge and help companies and businesses in the community on how to operate in a remote environment. That’s what we’re doing right now. We’re working with a bunch of governments, right now.”

NEW WORLD IS 'REMOTE'

Mr Redenbach said remote working would “change the world forever”.

There will be some learnings out of this, he said, such as how to support people if something like this happened again.

The other key learning was for companies to understand how to trust their employees to work from any location.

“People, when they have the right accountabilities, should be allowed to work from anywhere at any time,” Mr Redenbach said.

“They should be able to work in a café, they should be able to work from home and help their kids when they need, or support a family member that might need it, an elderly person,” he said.

“Whatever it is, we should provide that flexibility and I think the positive out of this is that business leaders, business owners, are going to have to start thinking: ‘How can we allow our workforce to have that flexibility? And ultimately, I think this is better for people’s mental health.

“It’s better for society and, ultimately, it’s better for workers.”

www.livetiles.nyc

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