With an ambition to ‘improve the state of the world’, the 2021 World Economic Forum in Davos this week sets out The Great Reset initiative.
It states: ‘as we enter a unique window of opportunity to shape the recovery, this initiative will offer insights to help inform all those determining […] the future state of business models.’
As a day-to-day part of the KPMG technology solution designed to modernize business functions in the cloud (KPMG Powered Enterprise*), I see myself as having a significant position at this ‘historic crossroad.’ I’m able to help others address short-term pressures, without compromising long term adaptability.
Often clients come to KPMG firms because they have a technology problem and they’ve been looking into which platform is the right replacement for their myriad of legacy applications, for example, in procurement or finance. This system replacement exercise forms the basis of their ‘digital transformation’ project. Whilst this is a step in the right direction, it runs the risk of getting them to a future point where that platform has become tomorrow’s legacy system. Why? Because the world around them has moved on, once more.
It’s a bit like when I learned to shoot clay pigeons. My instructor was always at pains to tell me to aim ahead of the clay, otherwise I’d miss because by the time the shot reaches a fast-moving object, it has moved on. Then, to complicate matters, the next one comes out at a different trajectory!
Of course, in business doing nothing is rarely the correct option. So how best to implement change? The answer lies in starting with the mindset that it isn’t a transformation project that is needed, but rather a transformation lifestyle. The job at hand is not to transform from A to B, it is to transform from A to B in such a way that you can get to C, D and E when you need to. And with the pace of change increasing, getting to C, D and E might be sooner than you think!
To get to this position, the task is not to implement the leading technology platform. Instead you should be seeking to implement leading practices, of which the platform plays an important part.
As the world changes around you, you can adapt more readily by adjusting the various levers that make up leading practice, rather than another wholesale swap out.
In his work for the World Economic Forum, Carsten Linz† succinctly describes how most companies still focus on process automation, perhaps with a little process reimagination here and there. He calls this ‘yesterday’s logic’. The opportunity, he says, is to move beyond this to transform into new business models.
Much of KPMG firms’ work is focused on business model transformation. The nature of it requires top level buy in and drive. It also requires a transformation of the operating model and the business functions within. This is the objective of KPMG Powered Enterprise* teams.
To transform the operating model, we advocate the adoption of leading practice at a function level. Leading practice encompasses adopting leading processes, people skills, insights, service delivery and governance, as well as the technology to make this happen.
Many of these elements are mistakenly overlooked in a process automation project. Yes, technology is having a profound impact on what can be automated, but the nature of the work people do is changing – therefore teams’ skills need to be different.
Consider an HR transformation. We know from our Future Of Work that HR should be about much more than pay and rations, recruitment and reviews. It should be about re-shaping the workforce, employee engagement and experience, shaping the workforce culture and of course, achieving HR process efficiency. It requires as much emphasis on behavioral change management as it does technology implementation.
I challenge you to think about any of your key business functions and whether the people have the skills to be ready for what they’ll be doing just three years from now, let alone whether you’ve given them the tools to do so.
I also challenge you to think about any change programs you already have underway, and to consider what is in place to ensure they can continually evolve in the future.
By adopting new operating models for your key business functions, you can get beyond process automation to a place that is able to address the challenges your market demands of you.
By working with an advisor who has already done much of the ‘heavily lifting,’ you can considerably reduce the risk of these significant change programs. This helps to overcome the fear of failure.
By providing your people with the right tools to evolve, you can avoid getting stuck at ‘B’ on your journey from A to E and beyond. This should not be an afterthought. If you can change the mindset of your people such that transforming the operating model is not seen as a project, but more of a lifestyle, then ongoing evolution will naturally form part of the plan.
In the meantime, you can read a little more and take a free self-assessment here.
† How to transform your business model for a post-COVID future – weforum.org – Nov 2020.
* Powered Enterprise is KPMG’s solution for modernizing business functions through digital transformation both now, and on an ongoing basis.