A global study of nearly 1,000 business leaders across 12 of the world’s biggest economies has revealed Australian CEOs are less tech proficient than international counterparts.
The survey represents a factor which could hamper economic growth.
The research by Maru Blue for Thoughtworks, a global technology consultancy that integrates strategy, design and engineering to drive digital innovation, ranked Australian business leaders’ self-reported technological proficiency behind that of the USA, UK, China, India, Brazil, Singapore, Italy, Romania and the Netherlands. It also found that just 54% of Australian bosses keep fully up to date with the latest technology trends, compared to 65% globally.
As one who would label themselves a tech-savvy business leader, this intrigues me because it means we may not be as prepared as we need to be to drive post-COVID economic recovery and growth. The reason is that increasing profit, setting clear direction and having the confidence to take necessary risks all require technology, driven by tech proficient leadership, to be at the core of a business strategy.
Before we examine the relationship between technology proficiency and growth, it is important to be clear about what the former means. What we don’t mean is a C-suite complete with computer science degrees and technical vocabularies – you don’t need deep technical knowledge to understand how technology as a concept can deliver value. What we do mean is company executives (beyond the CIO or CTO) who lead technology-enabled business cultures that inform all aspects of business strategy, budgeting and planning — effectively using data and analytics to improve customer experience and product innovation, leveraging cloud and investing in digital transformation programs.
Some 63% of Australian CEOs believe their businesses are tech proficient, slightly below the global average (67%) but significantly lower than the two largest global economies: 83% of Chinese and 75% of US companies. We believe our businesses are tech proficient yet prioritise improving operational growth (67%), compared to just 49% of companies globally. Many traditional companies see doing something new as too risky, so prefer to invest in technology that automates existing processes, but this becomes a critical barrier in our ability to grow. There needs to be greater confidence in technology as a means for innovating new profit channels and creating competitive advantage, which comes from improved technological proficiency and sophistication among leadership ranks. This need becomes particularly important when we see companies in the US, China, the Netherlands and Germany prioritising new product/service lines.
In financial services, we see a disparity between how organisations are adopting technology in the UK and Australia, and it is clear we are lagging. A big part of that can be attributed to a lack of competition in the Australian market, creating less of a need for organisations to try to capture new markets and revenues. Our more defensive stance comes from holding onto what we already have, and is why some Australian organisations remain ‘stuck’ on technology that just helps them do what they already do for less, while other markets have leapt on technology that enables them to create something new.
Technological ineptitude can also inhibit an accurate read on the market landscape and the ability to identify technology that has meaning and will deliver what customers genuinely want or need. We see situations where traditional businesses talk to customers, but they no longer understand the tech landscape customers are experiencing so cannot grasp what customers are actually asking for (which can change everyday). Gone are the days of controlled release schedules, it is now about a continuous delivery of improvements that add value for customers.
Our business is big on understanding the expectations of customers, then shaping our strategy and decision making around that. We don’t ask customers what technology they want, but what they want to do – tech proficiency at the leadership level enables us to determine the technology-led strategy for delivering that.
The relationship between technology proficiency and the stakeholder construct is important when it comes to buy-in from revenue-focussed shareholders, board members or other decision makers. Building the confidence needed to embrace, test and want to drive technology as the most effective mode of delivery is a journey. It requires tech proficient leaders to drag the business towards it and promote tech fluency at the core of the business and among those harder to reach, further removed stakeholders.
So how do you create a step-change that encourages new ways of thinking, leading, behaving and seeking growth? It starts with building more tech proficient business leadership to cultivate and propel new strategies and cultures. To compete on a global scale, more Australian companies need to improve their technology fluency. They must acknowledge technology is not a department, but a mindset that starts with leadership. There must be a recognition that growth cannot come just from investing in technology to do the same thing more efficiently, because businesses stuck within those confines will be left behind.
Tech proficiency offers an entirely new lens through which to view growth. It recognises the playing field just got a whole lot tougher, that technology is the catalyst for sprouting in exciting new directions and that it is the propensity for technology that will define the brands that become tomorrow’s market leaders.