USA 2013: Hal Varian – Google’s Chief Economist:
A billion hours ago, modern Homo sapiens emerged.
A billion minutes ago, Christianity began.
A billion seconds ago, the IBM personal computer was launched.
A billion Google searches ago…was this morning.
India 2020: Almost 900 million people are in the working and earning age group of 20 – 35.
So what you say!
Well the fact is that they are India’s first digital generation, whose behaviour and expectations are quite different and demanding from the preceding non or partially digital generations.
Now add the digital generation to the witches’ brew of the rapidly evolving, inter-connected dynamics of lifestyle, market and technology and assess the consequential changes and pressures facing business enterprises. Now hopefully you will see why Business as Unusual is the New BAU.
Why Is Business as Unusual is the New BAU?
- Digital Convergence and Disruptive Technologies (SMAC + IoT) are creating a Business as Unusual reality driven by the digital generation’s buying behaviour, expectations and transactions
- For business enterprises the New BAU is either an Opportunity or a Threat
- For most CIOs the pressure to rapidly align to the New BAU is an additional challenge to their Old BAU tasks and responsibilities
- This is especially true in mid-market enterprises where the availability of adequate IT resources, budgets and skill-sets can create serious constraints
As a fond farewell let’s recall the Old BAU: When data was just a quantification of the past. When technology life-cycles turned bald and bearded with old age. When mobility meant transportation and digital referred to your fingers. In those heady times consumer choices were limited and enterprises had a virtual monopoly on what the consumer knew about your product.
No longer!
Portrait of a Digital Native
The digital generation (people born between 1980 and 2000) have come of age during a time of technological change, globalization and economic disruption. That’s given them a different set of behaviors and experiences than their parents.
They are the first generation of digital natives, and their affinity for technology helps shape how they shop. They are used to instant access to price comparisons, product information and peer reviews. Which basically means that marketing hype as we knew it is basically dead!
Technology has enabled them to be infinitely better informed. But what is even worse – from a conventional marketing perspective – they are exponentially more empowered and not in the least shy about instantaneously sharing their experiences and opinions, which in a matter of moments can reach hundreds and thousands of their peers. As consumers and customers, this generation is far more demanding and far less tolerant of the sub-standard and sub-par.
Finally, they are dedicated to wellness, devoting time and money to exercising and eating right. Their active lifestyle influences trends in everything from food and drink to fashion.
In next to virtually no time –i.e. 3 – 5 years – this generation will form the biggest bloc of consumers for most products and services and will be the core of the workforce in most business enterprises.
Statistically we all know that. But realistically are we adequately oriented and prepared as potential employers and sellers?
And as if that didn’t make your cup of worries spill over you also have to deal with the marauding Digital Business Disruptors.
The Digital Business Disrupters
The entry of digitally native enterprises has added to the general mayhem across established industries such as Banking, Financial Services, Retail, Automotive and Agriculture
Yes…even Agriculture. Companies like Field Scripts and FarmLogs combine Big Data and Farm Management Protocols to provide actionable insights for US farmers related to soil composition, rainfall, heat accumulation, planting protocols etc. Today, almost one third of all US Farms use data driven insights to improve crop yields.
In the finance sector branchless banking and insurance are almost old BAU. Here one of the recent digital marauders is Acorn – the one-button digital investor. It is a simple mobile app which connects to the user’s credit/debit card and monitors all card spends. It automatically rounds up any spend to the nearest dollar and invests the rounded-up amounts into a risk diversified portfolio. Users only need to select their appetite for risk – Low, Medium or Aggressive.
Let me introduce you to another surprising banking disrupter – Starbucks. In 2011 the company raked in $2.2 Billion (Rs. 1,43,00 Cr) of interest-free deposits on its Starbucks Card. Companies like Google and Apple globally and Paytm and others in India are rapidly eating more and more into the traditional banking pie.
By now almost everyone knows about Tesla cars. But did you know that one night in October 2015, when the owners of the Tesla S&X sedan were peacefully asleep their cars were automatically upgraded with the self-drive software and in the morning the auto-pilot was activated. Just imagine a car whose capabilities improve over time –i.e. a car that does not depreciate!
But Business As Unusual isn’t just about technology innovations. It’s at least as much about disruptive business models. For instance:
The Digital Generation will impact business in two critical ways – as Consumers and Employees. Consequently enterprises will have to re-align their approach both externally (i.e. market-facing) as well as internally (i.e. employee-facing).
Is Digital Enterprise Only About Technology?
As buzzwords go ‘digital’ is a Neanderthal with a fresh lease of life. Today it prefixes everything from the World and India to Enterprise and Home. The common understanding of a digital enterprise relates the deployment of ISMAC (IoT Social Mobility Analytics Cloud). What may not be so obviously apparent are the implications of a digital enterprise staffed primarily by the digital generation addressing a marketplace dominated by their peers.
These implications are obviously clear to the digitally native enterprises and are reflected in their People practices and policies as well as the overall organizational environment and ethos. However, for the more mature and legacy organizations the task of attracting and retaining digital generation talent is a challenge that needs to be addressed.
Even until a decade or so ago the primary difference between one generation and the next was Age. There was also an embedded stability in terms of approach (related to work-life balance), expectations (related to career growth) and treatment (related to hierarchy and organizational response). No longer! The digital native unlike junior employees of the past is not content to be just an employee code. They expect full identity and personalization. A recommended read regarding attracting, motivating and retaining digital generation talent is ‘Work Rules’ by Laszlo Bock (Head of Google’s People Operations). So let me leave you with a couple of Google goggle-eyed examples:
Example 1: When recruiting a manager, part of the interviewing panel will include likely subordinates.
Example 2: Individual contributors (i.e. solo engineers/programmers) are encouraged to self-nominate for promotions
In addition to the digitally native companies and tech start-ups, mature technology companies like HCL, Infosys, IBM India, Microsoft India and others, where the digital generation talent is a significant part of the workforce, are implementing programmes and processes to attract, retain and engage this demographic. Most of these initiatives focus on learning & development, collaboration & crowd sourcing, idea & innovation incubation, work-life balance etc. The other significant initiative involves a radical rethink of the hallowed – or is it hollowed? – annual appraisal process. For instance, last October, HCL Infosystems rolled-out PULSE (Personal Unit Level Self Evaluation) a mobile enabled, weekly self-appraisal process that over time is designed to replace the conventional appraisal system.
The Clinical Definition of Insanity
The reality is that the nexus of globalisation combined with this digital generation mind-set and technology is only going to intensify over time. Which means that the longer enterprises take to align to Business As Unusual as the New BAU the further will be the distance and the deeper the disconnect between them and their prime target audience. Data shows that the life-span of Fortune 500 companies is rapidly shrinking. Over the last 50 years it has collapsed from an average of 75 years to 15 years and is rapidly heading to an average of 5 years.
The Fortune 500 companies that have continued to survive and thrive have done so because of agility and responsiveness. Both these attributes signify the ability to realign to rapidly evolving market dynamics and effectively respond to the emerging opportunities and threats. While even a stopped clock tells the right time twice a day in this case not changing is not an option since – to quote a personal favourite saying – doing the same things but expecting different results is the clinical definition of insanity.
*Quoted from ‘Work Rules!’ by Laszlo Bock