Transformation of various kinds is a popular buzzword, especially in times of change. But transformation is an intensive, comprehensive effort that involves the entire organization from people to processes to policies to culture. What are the key components to take into consideration? People Matters asked Mark Billington, Managing Director of ICAEW - International, for his perspective on transformation and innovation. ICAEW is a global professional body for chartered accountants, and he also shared some thoughts on how a profession can be involved in, affected by, and respond to transformation.
Digital transformation was a mega-trend last year, but for many businesses, digitalization stopped at introducing new software. What are your thoughts on how businesses can leverage the changes already made for a more purposeful transformation?
The increasing accessibility of data and emerging technologies has accelerated the digital transformation that is fundamentally changing businesses, economies, and societies. While digital transformation was a growing trend even before the pandemic hit, it has been especially critical in helping businesses to respond and recover, in the face of uncertainty.
Most importantly, businesses need to recognize that digital transformation is not just about adopting technology, but also rethinking talent management and processes within the organization, and ensuring people have the skills to be able to use the technology.
In certain finance functions, employees may be primarily focused on transactional work such as manually entering data and checking for data anomalies. But our research has highlighted the potential for digital transformation to take over laborious, transactional work to free up professionals’ time to carry out higher-level commercial, operational or strategic work for the organization. No matter what technologies are integrated and introduced into business operations, people are the key to enabling successful digital transformation. This means that businesses will need to ensure they cultivate a long-term shift in internal behavior and culture to embrace learning, change, and experimentation. Organizational leaders must play an important role in communicating this vision and inspiring employees to be a part of this change.
This fundamental shift in mindset and culture needs to happen across all levels for digital transformation to be sustainable. Businesses should not expect a “big-bang” style change overnight but instead, strive to accomplish small and continuous improvements over time, which will provide greater agility for organizations to respond to changes in technology, and encourage learning and reflection over transformations that have been made.
Going deeper than the surface implementation of tools, what are some ways businesses can revisit their policies and processes for greater effectiveness?
While there are common lessons and challenges when it comes to digital transformation, every organization's journey is different, as it is shaped by the specific needs of the business, its current culture, and leadership. For greatest effectiveness, business priorities and agendas for digital transformation need to be adjusted for specific business contexts, as a one-size-fits-all approach will not work.
Business leaders need to first create a clear digital roadmap that articulates a strategic vision, outline a plan considering the current and future needs of their organization and its stage of digital maturity, and set actionable goals tailored to different functions.
People are the key to enabling digital transformation, so business leaders will need to place their employees at the heart of their digital roadmaps. Steps should be taken to equip employees with technology and data analytics skills to help them succeed in an increasingly digital environment. This can be done by raising awareness of technology trends, developing new learning management systems, and supplementing training courses with knowledge-sharing sessions among peers and managers to cultivate a digital-first culture.
Another way to encourage change for the long-term will be to create building blocks for digital transformation, with a focus on process standardization. For example, a lack of trust in technology can be a reason for companies continuing to rely on manual processes. To overcome this, business leaders should cultivate trust within their organizations by instituting modes of communication such as weekly or quarterly townhall meetings to address concerns, and even nurturing “change champions” to facilitate positive conversations around technology.
Could you share some thoughts on what makes innovation crucial to your business growth today?
Many businesses in the Southeast Asia region have done well in responding and adapting to the pandemic by leveraging past investments in their digital infrastructure and adopting technologies to run operations remotely and continue serving customers. From moving to the cloud to adopting software to enable flexibility for remote work, these innovations have contributed to business continuity during an unprecedented time.
At the same time, more emphasis should be placed on the long-term use of such innovations. With the effects of the pandemic expected to persist, the next step for businesses should be to evaluate the innovations they’ve put in place, starting with how well their employees are adapting to the new normal. Our recent survey on the future of work highlighted that nine in ten chartered accountants, who work with businesses around the world, believe that working life will continue to look different after the pandemic, with challenges such as engaging new clients and building new relationships, maintaining staff morale, and maintaining productivity.
With these challenges on the horizon, businesses should look at putting in place new programs and initiatives to help employees make the best of their new work reality, such as setting up in-person meetings with clients to maintain relationships or going the extra mile by sending care packages to employees to boost morale. Besides, the businesses that will lead the pack in the new digital era will be the ones who can identify their digital transformation pain points and build plans to chart their next phase of sustainable and resilient growth. This will include assessing the risks of emerging technologies and the merits they bring to organizations, as well as considering the ethics and accountability of data, Artificial Intelligence, and other technologies, and what they mean for privacy and autonomy, social mobility, and inequality.
As a professional body, ICAEW focuses on building practitioners' skills and values. What are the skills and mindset that practitioners today need to contribute to transformation efforts?
According to the World Economic Forum’s Future of Jobs Report 2020, there will be a significant shift in tasks, jobs, and skills over the next five years, with accounting and auditing being in the top four areas impacted. With the acceleration of digital transformation in many organizations, the need for accountants with data analytics skills is more important than ever.
As organizations move forward with accelerated digital transformations, the role of data translators, who can understand raw data and put it into actionable insights that can be applied across the organization, is crucial. Regardless of the industry, they are in, practitioners should consider developing technical skills in areas such as programming, statistics, and other specific technology areas depending on the needs of the businesses that they are in, to better inform and guide business decisions.
Nonetheless, this will not dilute the value of ‘’soft skills’’ such as problem-solving, communication, and critical thinking. Alongside adding robust digital skills to their existing expertise, finance teams will have to become more diverse, creative, flexible, and collaborative. Skills such as being able to communicate and collaborate effectively as a team member or leader, analyze a problem, generate options, and make recommendations to arrive at the best solution will continue to be crucial skills for all professionals. This is especially true for accountants and finance professionals, who are trusted advisors to businesses and must be champions of corporate governance and transparency.