Digital Business insights by John Sheridan >>

FAMED Professor Michael Porter has highlighted the increasing disconnection between business and society. Companies have become too narrow in their view of economic value creation.

They chase short-term return for shareholders. They enforce price cuts on suppliers. They deskill and automate jobs to reduce wages. They downsize, outsource, relocate and offshore to reduce overheads...all at the expense of the society they operate and live in.

Growth and innovation in business suffers as a result. And business then becomes a major cause of social, environmental and economic problems. 

The disconnection between business and society has created the 1%.

And the disconnection has happened right in the middle of a new digital revolution that is steadily and stealthily connecting everybody up, fostering and encouraging ever more connection and collaboration.

So we witness board and management disconnection at a time of universal interconnection, two societal forces pushing in opposite directions. But only one of them is irresistible.

Google has provided universal, swift and easy access to information, shifting the power from vendor to customer, from the big to the small, from the selfish to the sharing, from the secretive to the transparent.

Businesses need to review and revaluate their narrow views, and endeavour to create economic value by creating societal value – recognising that what is good for the community is good for business. And this even includes banks.

As Michael Porter points out, all profit is not equal. Profit involving shared value helps society to advance more rapidly and allows companies to grow faster.

Business is not just about shareholder value, it is about the sustainability of shareholder value.

Farming value, not mining value. Focusing on the medium and longer-term, not short term.

Most farmers have always understood this. Value adding. Conserving, collaborating, investing and improving, applying a sustainable approach to agriculture that can be passed onto future generations.

The digital revolution pushes issues of economic value and societal value to the forefront. Into the cold light of day and the public domain.

In a revolution where the currents of change drive us towards more connection, more collaboration and more integration, our attitudes inevitably follow.

There is a slow but steady shift in attitude. Not yet for everybody, but apparent in those early adopters of digital technology, the innovators and the young digital natives.

This 20% of organisations - the agile, the smart, the informed and the adaptable – recognise opportunity when it stares them in the face.

The other 80% actually have no choice in the matter, but have failed to recognise that fact...so far. The digital currents of transformation carry them in one direction only.

Out into the digital ocean of change. They are caught in an enormous digital riptide carrying them out to sea faster than they can possibly swim in the other direction, back to the safe, solid land of the 20th century, when direction was clear, plans could be made and followed through, KPIs measured and MBAs meant something.

There is no solid land in the digital revolution. We are all at sea.

That is the intriguing thing about this revolution. We are impacted and affected no matter what we do.

The only intelligent option is to use the currents of change for personal, collective and collaborative advantage. And that means understanding what is happening. "Getting it". Making and taking time to really understand the options and opportunities, not abdicate responsibility to somebody else.

The digital revolution isn't about the froth and bubble of social media and websites. It is about the deep currents of digital disruption – more connection, more collaboration and more integration transforming the world we live in. These currents are changing all aspects of our society forever.

The major barriers and blockages to the digital revolution are nearly all human, nearly all attitudinal and therefore hard to modify and change.

Command and control is redundant. But countless managers wrestle with this new fact every day. Unsuccessfully.

Business loyalty has become hollow. Loyalty now only follows authenticity.

And millions of CEOs still face this disruptive revolution without full comprehension, unwilling to make time to understand what and why and how. "I'm too busy", they say, from the bus as it disappears over the cliff.

People are the barriers and inhibitors. As well as the innovators and inventors.

But revolutions take time. And patience is required.

You can't whip a tree and make it grow. The early adopters will adopt. But then...

For the 80% of slow followers, laggards and digital dinosaurs, a variety of approaches must be taken to explain, inform, cajole, educate, support and continue to support. And different messages are required for different groups of people.

But the decision to engage, the recognition and the understanding of opportunity and threat remains firmly in the hands of the CEO, the Mayor, the Chair and the politician.

These are the people that have to understand how wide ranging, deep and demanding this revolution really is. Most need help. Most are in key roles in our society. Embarrassed. Unwilling to admit to lack of understanding.

And they don't understand what they don't understand, and don't know what they don't know.

These "leaders" in name only are scattered across our nation - all in senior roles, in business, politics, media, government and not-for-profit organisations, all of them holding productive change back.

King Canutes. Millions of them.

This revolution involves technology (tools) AND people (users).

Technology is an enabler. But it has to be coupled with comprehensive understanding, imagination and enterprise.

And the process of change management is not like architecture where we draw a plan, then assemble inorganic elements into a structure. The digital revolution demands an approach more akin to gardening where we never really know what is going to "come up".

We have a general idea of what might be but then have to work with the reality as it emerges. Then water, fertilise, prune.

This is uncomfortable for those who think everything can be controlled. Gardening is intelligent management...not control.

The technology is the "easy" bit. But people are hard.

So all our "we will gain some real societal benefits out of this revolution" endeavours have to recognise the human component.

Software companies understand this. Systems integrators understand this. Education, explanation, training and support have to be ubiquitous.

We can't take this for granted.

Worse still (or better still), we are now entering a stage of connecting organisations, regions, states, countries, supply chains and ecosystems and that requires even more understanding and a very different collaborative approach that is inclusive and recognises the new currency of authenticity, honesty, consistency and trust.

And the traditional brokers are broken.

Industry associations, councils, governments have to seriously consider what it means to collaborate with others, and to move beyond merely talking about it, into action...because most current actions are reinforcing the status quo. Reinforcing the borders, the boundaries, protecting "their' constituents and members (Not for the good of their constituents but for their own vested interests).

Talking about collaboration and working together, and doing it are different things. There are lots of words and discussions...but little action.

This is the next "bump in the road". Get this right and there can be profound benefits in our societies. We will get there, no doubt of that, but governments and industry brokers seem to be largely stuck in 20th century architectural thinking and strategies, when landscape gardener thinking is required. Stuck in command and control when shared value is the new mantra.

Revolutions take time. And it is not easy readjusting views and viewpoints.

It seems to be especially hard for politicians and business groups and industry associations. The polarisation of all viewpoints into left and right, liberal and conservative doesn't ring true in a connected world. There are good ideas from both side and all sides. We need the best of both.

It is no longer about where the idea came from. Who cares? The issue now becomes "Is it a good idea?" measured against all the wicked problems we face as a society.

It is not about point scoring it is only about outcomes.

This is a hard new world for political parties to engage with. For them it is all about the tennis match – hitting the ball back and forth, one side to the other. They can't see how they can be both sides of the net at the same time. Yet, to deal with the wicked problems in society they must be.

It is the same thing with the way we historically organised our businesses and governments into departments to optimise the outputs of the industrial revolution.

The digital revolution demands a different structure. The wicked problems in society can only be solved by cross-departmental collaboration. The game has changed. Competition has morphed into coopetition, into shared value, into collaboration.

Most politicians have long forgotten what the idea of "public service" is about. Not all. But most. And the public has moved on. Power has shifted to the individual. And the individual's networks. "Authenticity rules. OK".

Attitudes that align with the new connected reality resonate. Others don't.

And of course, the digital revolution disrupts politics across the spectrum no matter what political persuasion or views one might have.

The digital revolution provides platforms for discussion outside of the traditional channels and supports initiatives of all kinds. Most politicians are not comfortable with this new disrupted, multimedia environment.

Their power is diminished. Control of the conversation has shifted. It is no longer enough just to be endorsed by Mr Murdoch.

And voters are far less amenable to nonsense and more amenable to common sense and authenticity, and that can come from anywhere, any side of politics, lower house or upper house.

That's why it is called "common" sense. Common sense was uncommon for quite some time but it's steadily creeping back into favour.

The digital revolution endorses the power and straight talking of the independents - the politicians who say what they really think. Because authenticity resonates with the digitally literate.

These are interesting times.

Farmers have to take a long-term view. Miners have a shorter-term point of view. We are witnessing the conflict of these perspectives on the Liverpool plains, and the jury is still out on the final verdict.

Miners can be collaborative. But they are not naturally sympathetic to the operational environment in the way farmers have always been.

Companies working collaboratively can create major improvements in the local business environment. This further reinforces and strengthens the link between an individual company's success and the community's success.

And the positive impacts that innovative businesses achieve locally can be surprising.

A NESTA report from 2009 offers some interesting insights. High growth companies represent roughly 5% of the business population but generate 50% of the new jobs. High growth companies are roughly half high-tech companies and half low-tech. The majority are at least 5 years old. These companies are disproportionately innovative and the innovation appears to cause growth.

Innovative companies grow twice as fast (in employment and in sales).

High growth companies also affect the surrounding business environment – a 5% rise in employment from high growth firms leads to a 1% increase in the surrounding region.

This is exciting. It is a network effect. And a network effect that we can leverage and implement.

A strong community or region, with capable local suppliers, organisations and institutions improves company productivity. There is greater supply chain efficiency, lower environmental impact and greater access to skills.

Companies working collaboratively can create major improvements in the local business environment. This further strengthens the link between an individual company's success and the community's success.

Opportunities to create shared value are tied closely to each company's particular business capabilities and vision. Where are the gaps? How can we fill them? We need to use the tools of the digital revolution to support collaboration and networks to build regional capacity and resources.

The first step is to help individual organisations become more productive and efficient through the optimal use of information and communication technology. Businesses can't move to the next level until they are skilled, confident and aware of the potentials and possibilities on offer – ready, willing and able.

Professor Porter suggests that businesses should incorporate a social dimension to their value proposition, to make them more sustainable versus competitors.

This will in turn help transform thinking and practice about the role of the business in society, giving rise to far broader approaches to creating value and leading to innovation, increased productivity and growth.

CEOs need to start thinking about what they do within the context of the whole region. Business isn't just about business. It is about every aspect of the society a business operates in.

The three underlying currents of the digital revolution – more connection, more collaboration and more integration provide the "climate conditions" for success.

Connection allows easy and swift access to information and knowledge.
Collaboration tools allow issues to be productively and collectively addressed. We need to build on the emerging toolkit of Linkedin, Twitter, Facebook, YouTube, email newsletters and other tools to generate regional shared value and take collaboration to the next level.

The key is always relevance. Novelty is enough to attract users but relevance is the glue that binds them.

Whose responsibility is it to think and act like this? Well, it should be the responsibility of central government, but we all know how much government suffers from the very factors Professor Porter outlined – short termism, polls and popularity, departments and departmental thinking.

So we need to drop down a level to the councils and regions that are already thinking and operating holistically anyway. When you directly engage with your "end user" every day, you have to take them seriously.

That means making connected decisions on regional strategic opportunity eg tourism attraction, job creation, startup support, training, food security, carbon reduction, ageing, collaboration etc.

That means working with councils next door. That means looking at the greater good of the region not thinking solely about what happens within the council borders.

And that needs Mayors to sit down and discuss common issues and collaboration. And make decisions. And test those decisions in the regions at the grass roots, where the feedback is meaningful.

Who will make these decisions? Politicians? Possibly. Hopefully.

But it seems to be more likely that those decisions will be made in a piecemeal manner by a wide range of individuals, organisations and businesses. That is not necessarily a problem if the pieces can connect up productively to create new collaborative, fertile territory for positive change.

Ants operate collaboratively for the good of the nest. The queen does not control what happens in the nest. She lays the eggs. She creates the resource.

The ants forage, find food and manage threats with all the "decisions" being made at the small group level. The ants collaborate to solve problems. There is no central command and control. Yet the result of collaboration at this level is remarkably successful.

Collaboration at grass roots is already happening, not just in Australia but across the planet. It is a very natural activity. Individuals and groups are collaborating to solve problems. Now we just need to scale up. And take this collaborative approach to the next level.

We can learn a lot from ants. They are successful. They have collaborated for 100 million years. And if the humble ant can manage this so successfully, surely we can.

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping businesses and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 15 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

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Digital Business insights by John Sheridan >>

INNOVATION happens in laboratories and workshops in every university across the land. They are think tanks.

And innovation happens daily in the real world laboratories of small business, in the biodiversity of the marketplace. Innovation is in the very DNA of every startup and small business.

Without fresh ideas, agility, responsiveness, constant adjustment and change a business will stumble and fall. 

Most big businesses left this degree of insecurity behind years ago. They learnt lessons, improved their systems and processes and reinforced what was learned through training, reward and management.

The ability to repeat and incrementally improve is what gave the big business its edge, its ability to deliver day after day what the customer wanted. That is why it became big. Repetition and reinforcement created success.

Documented systems and training reinforced success. Over time the system became the foundation of the workforce culture, with individual workers and managers rewarded for supporting the drive to more sales, more profit and more happy customers and repeat business.

Then along came the digital revolution.

For big organisations, the advantages of being big, inflexible and consistent suddenly became disadvantages in a new fast changing operating environment.

Too big to move quickly. A culture of "more of the same". Repetition. Rusted on habits and practices.

For small organisations, the disadvantages of being small, agile and insecure, suddenly became advantages in an environment where responsiveness to change was now a valuable attribute.

Digital disruption turned the world we thought we understood upside down.

65 million years ago, a similar thing happened, when dinosaurs ruled the world, dominating the land, sea and air and only peripherally competing with small mammals, yet for reasons lost in time small mammals came out on top.

The battle for supremacy between the big and the small, the slow and the swift, the fixed and the flexible is happening again.

It is a time of massive change, of disruption, of mutation and with very few exceptions big organisations are not comfortable.

It's a time for "try and see", "plan to fail", "launch and learn" "what if?" "give it a go" And big organisations don't work like that. The CFO says 'No".

In the natural world, over time creatures steadily adapt and evolve.

External forces of various kinds, chemical, biological and radiological impact, corrupt and change DNA. Some changes confer benefit and some don't. But any beneficial change is passed on and can deliver a competitive advantage. Evolution.

The new genes deliver that advantage to succeeding generations and into the natural operational environment.

In more complex creatures it doesn't happen easily. Any change to the DNA does not go unnoticed. Various agents within the creature – the immune system, recognise extreme mutations and eliminate them.

In higher animals the immune system manages mutations effectively every day. In larger businesses the same thing is true.

In our societies innovation and new ideas (mutation) is expected in the controlled environments of universities, institutes and laboratories.

And innovation and new ideas occurs naturally in startups and small businesses. Or they fail.

But it doesn't happen easily in big businesses, governments and other large institutions. The organisational "culture", middle management and HR departments – the "immune system" – is programmed to suppress it.

We manage innovation in controlled environments with permission to innovate – universities.

We suppress innovation in big businesses, government and other large organisations.

But innovation happens freely in small business due to market forces in the cut and thrust of the real world.

That is where organisational biodiversity exists. The world of big, medium and small businesses interacting day-by-day, street-by-street, sector-by-sector, supply chain by supply chain, in state and country across the planet.

It is in the ongoing contact, communication, competition, trading, acquisition and overlap that insights arise.

Because the market is where the pressures of competition and contact inspire new ideas and actions. Where creativity is used as a tool to generate competitive advantage.

Millions of businesses in competition, contact, communication, trade and collaboration create a complex and stimulating environment that generates change, trial, failure, revision, improvement and success.

Twelve thousand years ago, we gathered seeds and fruits in their natural state wherever they could be found until one day for whatever reason some bright spark noticed the connection between seeds, germination and a plant and thought "It's hard work searching for fruit all the time, maybe I can grown the fruit right here" and off we went. Agriculture.

We recognised the value of what had arisen through biodiversity and natural selection and appropriated it for our own use.

The fruit, animals and fish all originated in the natural environment. We just noticed them, observed them, harnessed them, selected, shaped and managed them in more controlled and productive environments – farms, fisheries and nurseries.

Over time we refined the seeds, plants, fish and animals by favouring changes and mutations that suited us.

Yet we still found value in harnessing both environments - the wild and the nurtured - and we still do today.

Having access to these two conditions suits us. We get the benefit of scale, biodiversity and complexity in the natural world, and controlled selection in farms and nurseries.

But the underlying evolutionary inclination towards continual "mutation" – creating new plants, animals and varieties is what drives change in both environments.

In business, the pressure to change, to experiment, to innovate comes from the ongoing search for competitive advantage.

Bright ideas. Bad ideas. Weird ideas. Good ideas. Any ideas. "What if?"

In universities, both science and art are about discovery - research, creation, and exploration of ideas.

And discovery is what happens when a bright idea, a "mutation" – something new - arises and is pursued.

In our society, universities, institutes and colleges must be allowed to originate – to research for the sake of enquiry and discovery.

But what businesses and industry needs most is knowledge and technology applied in solving a particular or immediate problem, or to increase productivity, profitability, efficiency or whatever.

So we need two things – pure research with few if any limiting conditions and we need brokerage to match-make industry issues and needs against a variety of possible solutions, many of which may exist already.

For a healthy society with a long-term future, we shouldn't be putting unnecessary limits on what universities are researching.

We need to fund them appropriately not defund them.

We don't know what we don't know. We don't know what we may need.

But we also need to leverage the largely untapped resource of existing research papers, innovations and inventions in a far more intelligent and organised manner.

We have "think tanks" – universities and institutes.

We now need "do tanks" – places where ideas can be refined and applied to business and industry needs in a rational, national and structured manner. And I don't mean incubators, or Institutes, Growth Centres or CRCs. Useful though they all may be.

I mean something completely new that connects to and joins up all the existing good bits, the "thinking" bits including the incubators, TAFEs, universities, CRCs, Growth Centres, Institutes and CSIRO to deliver something really productive and valuable for Australian industry and small business = producing growth and jobs.

Not just sloganising about growth and jobs, but creating the conditions for growth and jobs.

There is a gap between "ideas", "talk" and "action" in Australia that is not being bridged effectively. Everybody knows the gap is there, but it seems that nobody has the time, money, remit or responsibility to bridge it.

"It's not our job, but something needs to happen. Germany does it well, The USA does it well, but we don't." That is not good enough.

We have heard this statement from professors in universities, from senior staff in CSIRO, directors in government, CEOs in industry...all sorts of people. The problem has been recognised and identified, but nobody will pick up the ball and run with it.

Connecting ideas to action could and would produce an incredibly fertile environment to stimulate growth and create jobs...the very thing government has as its current mantra.

But we need less talk, more action.

We need 'do tanks"

Places where ideas can be germinated and grown. Where good ideas can be selected and shared. Where specific knowledge can be transferred in a structured way.

In this context, universities are not "do tanks". Nor should they be.

A "do tank" is something different. And it is not a CRC or a Growth Centre, or an incubator or a TAFE. It is a broker, wholesaler and retailer for all of them.

A do tank is a place where ideas, innovations and inventions can be aggregated, matched against a set of defined industry needs, and where technology transfer can take place directly, or be enhanced in some way through engineering and design.

A do tank is a place where the big academic and research institutions can interface with SMEs, sole operators, startups and contractors.

Bridging the gap between "We are big and I don't get out of bed for less than $10,000 and "I'm small and what can I do on the smell of an oily rag".

Bridging the gap between, "I might be able to fit you into the diary in three months time when term ends" and " I need this by the end of next week or sooner."

A do tank is a place that can present new ideas, innovation and inventions as options for industry to consider – complementing the hard work done by the public libraries and ABC's Catalyst and Landline in presenting and showcasing innovation to industry and the general public.

A do tank is a place where investors and venture capitalists (should such mythical creatures really exist in Australia) can find a showcase of Australian ideas, innovations and inventions created in the economic biosphere of the marketplace by SME's, startups and individuals.

A do tank is a place where Australian innovators and entrepreneurs might find material to explore and commercialise, a place where they can meet and consider collaboration with like minds.

A do tank might well operate as an extension of the current design, engineering or creative industries precincts, managing the gap between customers of all kinds – consumers, manufacturers, industry and entrepreneurs and the knowledge resource.

Give the engineering and creative industries precincts the money and the remit and they could deliver the goods.

A do tank is something that bridges the deep gulf between universities, industry, SME, CSIRO, the Growth Centres, the libraries, schools and the hordes of specialist consultants.

It should be customer driven, grass roots up. It would allow any startup and SME to walk in the door and walk away with value.

It would be a catalyst for growth and 21st century job creation at a time when 20th century jobs are evaporating before our eyes.

It should be a research showcase for universities that attracts enquiry not pushes existing square pegs (completed research) into round holes (I have a problem). Tailoring not off the shelf.

It should be a "matchmaking" place, where the customer is helped to define problems clearly and pointed to the right solution, consultant, expert or partnership and only if necessary – generating a new research option.

It should be a hub for collaboration.

It should be a brokerage that helps a business to decide on one of three options – "do it yourself", "do it with me" and "do it for me".

"What research, innovation or improvement could I and should I do myself, in-house?"

"What idea or innovation could be enhanced by an engineering or creative industry partnership?"

"What are the big picture, new issues, common to many businesses or industries that should be addressed in a university?"

Partnership between universities, institutions and industry can then happen organically.

A two way street. A three way street. A many way street.

We need the best from the real world and the best from the academic world brokered for the good of both.

The market won't fix this issue. It's good at jungles not farms. This is one for government.

And guess what? We have the technology, the partnerships and the intelligent resources to create such a knowledge-sharing environment today.

But do we have the leadership to do it?

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping businesses and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 15 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

ONLINE business is at its peak right now through Christmas and beyond into the New Year sales period – but many businesses are not maximising their markets.

This is where the rubber hits the road for most online retailers, according to digital marketing specialist SponsoredLinx CEO Ben Bradshaw. In his experience, the online retailers who win most at this time of year are those with an effective strategy, adapted to this period. 

In fact, he has five useful tips that he and SponsoredLinx teams use to help give businesses an online edge during the Christmas rush.

Use seasonal keywords

“In the lead-up to Christmas, online shoppers will begin using holiday related search terms and phrases such as ‘Cheap Christmas gifts ideas’ or ‘top gadgets for Christmas 2015,” Mr Bradshaw said. “Make sure these relevant keywords are included in your AdWords campaign and also within website content for SEO purposes.”

Don’t be afraid to increase your ad-words budget

“Many businesses fail to adjust their Google Ad-Words budget in the lead up to Christmas which puts a cap on their potential web traffic,” Mr Bradshaw said. “Businesses should look to boost their AdWords spend as Christmas approaches and closely monitor their sales. If increasing your budget doesn’t achieve results, you can quickly reduce your spend back to normal levels.”

Tailor your homepage content

“Adobe’s 2015 Digital Index suggests that the key drivers for Australians to shop online are the prospect of lower prices, good deals and free shipping,” he said. “During Christmas time it’s particularly important to emphasise these messages on your homepage.”

Less is more at Christmas time

“Chances are your customers are stressed in the lead-up to Christmas as they balance social engagements with wrapping up work projects and shopping,” Mr Bradshaw said. “They are also likely to be receiving a mass of emails featuring Christmas promotions. With this in mind, ensure your emails are targeted, brief and informative for your customers.”

Data collection

Mr Bradshaw said an increase in website traffic also provided an opportunity to gather increased data about customers. “Ensure that you are capturing accurate information about your campaigns and website traffic. If you can set up daily reports, you can make continual adjustments to your AdWords campaign and website to maximise sales,” he said.

Mr Bradshaw advocates a versatile, multi-faceted approach year-round in digital marketing strategy, interweaving Google AdWords, SEO, mobile marketing, social media, app marketing, mobile websites and astute web development. The focus must adapt to the Christmas period, he said.

“We provide digital marketing services to thousands of clients across Australia and there is no doubt that Christmas is the busiest time of year for the majority of online retailers and also many companies selling services on the web,” Mr Bradshaw said.

“However while there might be a spike in online shopping in the lead up to Christmas, there is no guarantee your business will experience a corresponding increase in web traffic or sales. Christmas shoppers don’t necessarily behave in the same way as your customers at other stages of the year.”

www.sponsoredlinx.com.au

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