The Digital Economy a seismic

shift in how we live and work

A study by;
Keith Miller and the Cass Business School students, Haissam
Fattah, Carola Massa, Tim Trautmann and Mariia Nikolaeva
1 January 2018

The Keith Miller Group Ltd

71-75 Shelton Street London WC2H 9JQ

+44 (0) 20 3879 1756

+44 (0) 7703 134112

keith@thekeithmillergroup.com
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Context

The Digital Economy refers to an economy based on digital computing technologies.

Increasingly, it is intertwined with the traditional economy making a clear delineation harder.
(Wikipedia)

The digital economy is creating a seismic shift in how we work and live our lives.
Indeed, the traditional economy will become one which fully absorbs and integrates all
aspects of digitisation. Yet most disconcerting is that despite the digital revolution that
is taking place at an ever increasing pace, most companies are simply not well prepared
for it. They will be the ones which do not see the disrupters coming and it will come as
a shock to them to know that 40% of their executives want to move to more digitally
aware and advanced companies in 2018.

Since 2014 I have continuously monitored the dynamics of the wider economy and how
it impacts on jobs and the world of work, out of which publications such as, Mastering
the Job Market in a Digital Age have been written. In the autumn of 2017, I commissioned
four international students from CASS Business School in London, Haissam Fattah,
Carola Massa, Tim Trautmann and Mariia Nikolaeva, to conduct further research into
the dynamics of the digital economy in 2017 to identify the critical factors companies
must come to terms with in order to be the winners in the future.

Their insights and relevant studies from corporate advisers and consultancies, which
are all referenced where appropriate, have been brought together in this report. The
findings are far reaching and have serious implications for all companies, employers
and employees at all levels.

Digital megatrends
The starting point for our research was the re-evaluation of megatrends which
themselves have been examined in depth and published by Deloitte in August 2017.
Although technological benefits of digitisation can often simplify processes and provide
increased and varied functionality at the micro level, there are some megatrends that
we have highlighted which point up the greater complexity digitisation can bring at the
macro level. In turn, they pose challenges, many unforeseen, for leadership teams with
which they need come to terms and resolve if they are to successfully navigate through
the unchartered waters they will face. Some examples are:

Technology has provided tools thus reducing the need for mass markets,
instead creating a new wave of individualism, where a culture of me has
risen over a culture of we
Collaborative consumption models are on the increase thanks to the fast
development of technological platforms. The rise of the sharing economy
enables the fostering of positive relationships between the individual and
the economy in which they operate
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The increase in mobile technologies has enabled constant connectivity and
made us fundamentally reliant on technology, from social interactions to
transactions
Our world is changing towards a more digital landscape and it is opening
its doors to the millennial/centennial next-generation workforce which will
bring new skill sets. The winners of the future will know how to harness
these and will not be hampered by traditional organisational structures
Although initially a very positive impact, one of the side effects of
technological prominence in social interactions has been the rise of
interpersonal divergence, whereby many more connections are made via
social platforms, with negative repercussions on face-to-face interactions
The confluence of artificial intelligence and augmented reality contribute to
the rise of digital personification, with new modes of interactions whereby
digital elements can become more humanised
As virtual connectivity grows, physical co-location diminishes, giving rise to
a segmented workforce. On the one hand digitisation has promoted
flexibility and agility but on the other, many companies are starting to
question employees disengagement and productivity
The rise of the inter-borders global workforce, namely workers who live in
one country, work in another, and consider mobility a critical hallmark of
employment
As boundaries have blurred, the line between traditional sectors and
shadow markets has emerged, with a consequent increase in market
complexity
To compound this there is a distinct difference in how technology is
employed by different age groups. The Mobile Ecosystem Forum in
association with ForgeRock in its Global Consumer Trust Report 2017, reports
the following differences between the purchasing habits of different
generations:
o Centennials: the typical customer wants authentic brand experiences
across all channels, and values quality over price or convenience
o Millennials (ages 22-37): individuals of this generation tend to stick
with the companies they know and trust, demonstrating the most
brand loyalty of all the generations
o Generation X (ages 38-52): this segment is full of deal seekers.
Customers want good buys on quality products and they expect a
convenient path to purchase. This group is most likely to be
influenced by price and cares less about brand loyalty than other
generations
o Baby Boomers (ages 53-71): this generation includes the most
traditional consumers, shopping with brands that offer wide
selections at discounted prices. They want to see a variety of well-
priced products that meet their immediate needs. There is evidence
of companies shifting their models to recruit the digital native
millennial workforce
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The leading digital countries

According to Harvard Business Reviews Digital Innovation Index (2017), the top 10
countries are: UAE, New Zealand, Singapore, UK, Israel, Estonia, Hong Kong, Japan,
Germany and USA.

Common practices and attributes of leading countries in the digital economy

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United Arab Emirates

40% of a sample of companies surveyed by Siemens has a digital strategy. Senior

management is responsible for 47% of digitisation in their companies
(Strategyand.pwc.com 2017). The digital economy could generate almost $68bn in extra
revenues in the next 4 years in the Middle East, of which $14bn correspond to the UAE
(PwC 2017).

The proportion of people with digital skills in various sectors as a %age of those
employed (McKinsey 2017)

51% emerging technology

50% data analytics
49% technology architecture and design
41% customer experience

The UAE ranks #1 in governmental digital adoption in the Middle East, having invested
heavily in the digitisation of public and government services. It has developed a long
term plan in which it is financing the development of several projects such as: the
creation of a refillable debit card to facilitate the payment of government fees, the
introduction of electronic voting machines. Today 96% of government services for
citizens have gone mobile, with the goal that by the end of 2018, 80% of citizens using
government services will access them through their mobile phone (News, G. 2017).

New Zealand

New Zealand is on the path to become one of the worlds digital leaders after years of
government planning and initiatives. The digital economy contributes $16.2bn yearly to
its economy, representing 8% of GDP. There are almost 29,000 firms in the technology
sector which have generated c0.5m jobs (Mbie.govt.nz, 2017).

96% of the businesses in New Zealand have access to the internet, and more than 1m
households, businesses, schools and hospitals connect to ultra-fast broadband. In
addition to this, the country has an 82% smart phone penetration rate (Itu.int, 2017).
The digitisation of government services has led to almost 60% of common transactions
with its citizens being conducted online. The digitisation of services also benefits local
businesses with a decrease of government related expenses of more than 12%
(Mbie.govt.nz, 2017).

The most digitised sectors of the economy (digitalnation.nz, 2017) are:

ICT
Manufacturing
Agro-tech
Healthcare
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Singapore

Singapore ranks #1 in The Economists Asian Digital Transformation Index, owing to it

having the best digital infrastructure in the region, the most digitally knowledgeable
human capital and the best industry connectedness (Singapore, F 2017). This is a result
of positive governmental initiatives in technology and business, ICT expenditure,
telecommunications investment, the percentage of the population covered by 4G
networks and the average cost of high speed broadband services.

The %age of people with digital skills in various functions:

51% customer service

41% marketing and sales
39% general management
38% finance
36% information
36% research

30% of the largest companies in Singapore have an integrated digital strategy and there
is clear evidence that others are beginning to embrace it. 84% of companies in the
private sector report difficulty in recruiting employees with the required digital skills
(McKinsey 2017).

Singapores government consistently ranks among the worlds best for digital
capabilities. In contrast to other stand-out countries leading the way in the digital
economy, Singapore has been establishing itself in the digital world since the year 2000
with the creation of the first e-Government action plan.

The Government Technology Agency also known as Gov-tech, and, The Agency for
Science, Technology and Research, have the responsibility for assisting local companies
to develop their strategic technology road maps. The government is also investing in
citizen skills, by launching a 3-year programme to teach computer programming to
0.5m young people. Companies are also benefiting from the $80m initiative, Go Digital
Programme that helps SMEs build digital capabilities and adapt to disruptive change
and The International Partnership Fund, a $600m fund to support local companies to
expand to global markets (Connecting Capabilities 2017).

U.K.

Investment is being undertaken to increase connectivity in all sectors of the economy.

Programmes are being put in place to ensure digital skills inclusion such as coding
classes in primary and secondary schools, the Apprenticeship Levy and support for
wider digital adoption in companies. The UK government has identified core digital
activities as e-commerce, web presence, cloud technology and digitising back-office
functions. Other smaller scale programmes include monetary support to emerging
technologies, Tier 1 visa endorsement for digital specialists and innovation support
(Gov.uk, 2017).
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In 2015 there were already 1.64m digital technology jobs in the UK, and the digital
sector is creating jobs twice as fast as the non digital sector. HBR reports that the UK is
highly digitally advanced yet exhibits a slowing momentum. To stay ahead, it needs to
keep its innovation engines in top gear and generate new demand, failing which it risks
stalling out. On the other hand, government approach to business digitisation,
education and recognising the need for low-skilled jobs automation will have a positive
impact on the future of its digital economy development.

Research shows that the UK might experience huge change in labour structure as a
result of Brexit. 47% of highly-skilled workers from EU countries are considering leaving
the UK in the next five years, versus 38% of highly-skilled non-EU workers. Among less-
skilled workers, 27% of EU nationals and non-EU nationals say they are likely to leave in
the next five years. This implies that in order to keep up with digital economic
development, the UK will need to upscale domestic labour as well as reconsider the visa
policy for non-EU nationals. Only 21% of them see the UK as a less attractive place to
work as a result of Brexit compared to 48% of EU citizens working in UK. However, with
94% of non-EU citizens willing to move to the UK for career advancement, it is sensible
to recognise the potential benefit of recruiting non EU specialists where possible.
(Deloitte 2017)

Israel

Israel has a strong reputation for being a startup nation as a result of public investment
in the private sector which supports smaller scale entrepreneurship. Israel has the third
highest number of companies listed on NASDAQ stock exchange after USA and China. It
invests a higher proportion of GDP in R&D than any other country (Sperber&Benzoni,
2017). Cyber security continues as a growth sector and receives central funding for
what government regards as leading-edge research into this space.

Despite the fact that the digital economy in Israel is currently very dynamic due to cyber
security development and leading-edge tech startup contributions, it accounts for only
10% of the countrys employment. Other parts of the economy suffer from relative low
productivity and less inclination for implementing digital strategies which is partly a
result of protectionist government intervention. In order for this country to keep its
momentum and become a truly digital economy, governmental measures will have to
be taken in order to force businesses into effort to undergo digital transformation from
within (The Economist, 2017).

Due to start-up culture and innovation driven by cyber security initiatives, Israel now
possesses highly skilled digital security specialists, who could potentially be hired by
companies outside of Israel. However, the benefits provided by Israels governmental
programmes can make it a challenge to lure them.
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Estonia

e-Estonia refers to a movement by the government of Estonia to facilitate citizen

interactions with the state through the use of electronic solutions. Estonias
government platform offers 600 e-services to its citizens and 2,400 to businesses -
medical prescriptions, tax filing, voting online et al. (World Economic Forum, 2017). It
has provided a free wi-fi network in most populated areas and has declared access to
the internet to become free to those who wish it. Although broadband coverage is
below EU average, 4G is widely available.

The government has introduced an e-residency programme, which allows online

company incorporation for some businesses without requiring nationality or residency.
E-residents are given access to Estonian e-services allowing the freedom to open and
run a global company fully online from anywhere in the world (The Economist, 2017),
(eu2017.ee, 2017). Estonia is sometimes referred to as the Silicon Valley of Europe as it
has a wide range of digital professions and services but given its relatively small
population, c1.3m, it is perhaps an example of a European cluster of digital activity with
growing importance. Yet the take up of digitisation in Estonian companies lags behind
others in the EU which is now being addressed by its government through new
incentive packages (Gaskell, 2017).

Hong Kong

There are four distinct areas in which the Hong Kong government has intervened to
drive digital take-up. It has invested in its infrastructure to support digital advancement,
resulting in an internet connection speed which is one of the fastest in the world. It is
transforming Hong Kong into a major hub for innovation and technology with support
for ICT start-ups and other related enterprises. It has also invested heavily in e-
government services supporting all touch points. There is a major education
investment programme to ensure the supply of digitally up to date workforces of the
future.

The financial sector in Hong Kong has been challenged adapting to digitisation. 74% of
Hong Kongs Chief Financial Officers admit that it is difficult for them to keep pace with
digitisation and 52% of them point up the lack of digital skills of their finance teams and
the urgency of digital and technological up-skilling (Nagy , 2017). Currently the Hong
Kong economy is in a high state of digital advancement but it needs to encourage more
innovation and emerging technologies in order to maintain growth momentum in the
future.

Hong Kong has clear challenges with the fast pace of digitisation and the disruption in
particular with the financial sector, implying that there will be increasing demand for
digital specialists by banks and other financial institutions. Moreover, it is likely that
Hong Kong will spawn digital and technological specialists in the future.
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Japan

One of the central pillars of the Japanese governments economic growth plan is the
promotion of ICT innovation. A declining in number yet aging population is a huge
factor which is resulting in reduced domestic demand and domestic labour input. The
government sees the expansion of ICT as a stimulus to the demand and supply sides of
the economy. The scope of investment covers big data, artificial intelligence and
automation which are expected to boost the Japanese economy by 33.1 trillion yen by
2020 (Ministry of Internal Affairs and Communications, Japan, 2016).

An international survey into ICT progress in enterprises revealed that most Japanese
companies are less concerned about digital infrastructure than the lack of digital human
resource development. There is concern amongst government and large employers
that Japanese workforces are slow to adapt to the acquisition of digital skills. The
government has reacted by promoting and incentivising employee training in ICT. It
also encourages the adoption of ICT applications in healthcare, education and natural
disaster preparedness. This extends to infrastructure spending to include the
establishment of free public wi-fi hotspots, upgrading of telecommunication services
and the introduction of advanced intelligent transport systems.

Japan is a digitally advanced nation that has experienced high momentum in recent
years. However, this momentum has slowed down and Japan is not a digital leader
anymore. The government has to rethink its policy directions to ensure sustainable
economic growth in the future.

It can be expected that Japan will encourage foreign technology companies to establish
entities in the country to help boost investment in innovation and emerging
technologies (Bhaskar Chakravorti 2017).

It is very likely that Japan will be one of the leaders in artificial intelligence in the future,
due to the degree of government support which will spawn a large number of Japanese
specialists in this arena. In addition, Japan is also the leader in digital and technological
solutions for natural disaster preparedness.

Germany

The German government is wrestling with the variability of broadband speed of its
network which is a drag on digital expansion. It is endeavouring to create an
environment that ensures continued competitiveness through the development of new
technologies with digital applications for supply chain management and production,
particularly relevant for Germanys key engineering, industrial and automotive sectors.
It is viewed as important that its key industries have government support for adopting
new technological methods to aid agility and efficiency to compete in the future. The
government encourages small and midsize businesses to use and develop new digital
technologies to enhance innovation and simplify business processes (Die
Bundesregierung, 2017). There is increased demand for digital specialists who have the
capability of implementing new digital solutions in all businesses, irrespective of size.
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The German economy is in a high state of digitisation, yet for the reasons just
mentioned it is experiencing only medium momentum. The government will have to
encourage innovation, especially in key industries that make up a high percentage of its
GDP to compete on a global scale. As a result, it can be expected that Germany will be
one of the leaders in digital solutions and emerging technologies that are vital for
manufacturing and engineering in the future. It is likely that Germany will spawn digital
specialists with a strong industrial application bias (Bhaskar Chakravorti 2017).

USA

The worlds leading economy has one of the highest home internet access rates in the
world, with 98% of its households having access to the world web and 84% of
individuals use the internet on a daily basis (McKinsey 2017). Although the USA was
once a world leader in digitisation, currently it ranks 15th in the ICT development index,
as the country spends 5% of their GDP on ICT and achieves only 18% of its digital
potential. Nevertheless, the USAs service industry has proven to have adapted better
to the digital economy, as more than 50% of the countrys service exports are digitally-
deliverable.

By 2020 2.72m jobs will be created for data science and analytical skills
(Mitsloan.mit.edu, 2017). An MIT study shows that in the last 35 years, employment in
occupations requiring digital and analytical skills has increased almost 80%.

Top performing sectors in the digital economy are:

ICT
Media
Financial Services
Professional services
Manufacturing
Energy

The government of the USA has prioritised making the country a digital leader, as it has
realised the missed opportunities of the current economic structure. Digitisation has
the potential to boost annual GDP by $2.2 trillion by 2025 (Department of Commerce,
2017). Besides realising the opportunity costs associated with not leveraging the digital
economy, the government has also encountered an even bigger problem. A study
showed that 70% of employers are looking for more digitally better qualified candidates
but only 25% of US graduates arrive in the job market with the appropriate digital skills.
Hence, the government is creating initiatives in every State to incentivise its citizens to
learn and acquire digital skills.
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China

China is not categorised in the HBRs index but we must mention it. There is not the
freedom of internet access that is available in other countries but there are some
important dynamics which must be considered. One of these is that the Chinese
consumer is used to undertaking more activities on their smart phones than in most if
not all other countries. The sophistication of apps now available in China, if applied in
other countries, would themselves have significant disrupting influence to b2b
procurement and general consumer purchasing processes, as well as having the
potential to disrupt financial comparison websites and even make them obsolete.

This would be a prime example of the disrupter being disrupted which will become a
common theme to be played out in the future. This is exacerbated by the fact that at
any one time 200-300m Chinese people are living, working, studying outside China.
They can bring their consumer experience from home with them and this will influence
citizen consumers around the globe in their own countries, setting new norms and
standards of customer/consumer expectations.
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The scale of disruption

MGI Industry Digitalization index for Europe

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Two of the most technologically disrupted industries

Media & Entertainment

The media and entertainment industry has been significantly disrupted by the
emergence of new technology and turned into a direct-to-consumer environment.
Specifically, the expansion of digital technology, manifested in more ubiquitous fixed
and wireless network connectivity enabling growing numbers of connected devices and
new routes to the user, is altering the industrys structure, driving new ways to produce,
distribute, and monetise content across its landscape (Deborah Bothun, 2016).

Consumers have greater choice of different contents, which are available to them at all
times and through various routes. As a result, executives in the media and
entertainment industry have to shift their focus in order to be successful in the future.
It does not make sense anymore to produce content that appeals to the largest possible
audience. The new approach has to be a fan-centric business, which means active users
united by shared ideas, interests, and experiences, who will return every day to your
brands and properties. This new business model will give the firms a vital strategic
advantage, as they will have the loyalty from their fans and they will know their
customers in more detail. Hence, fan-centric businesses can deliver more customised
content and position their products more efficiently.

Disruptive companies enter the media and entertainment industry and compete with
incumbent firms for fan value. Thus, successful organisations have to be better than the
competition at locking up fan engagement, loyalty, spending, and at investing in efforts
that drive fan value. That means the competitive firms are the ones that can quickly
deliver the wanted and customised content to the users.

The most technologically disrupted part of the media and entertainment industry is
television. The number of people who subscribe to video and television streaming
services that deliver content via the internet is increasing every year. According to PwC,
in 2016, 78% of American consumers subscribed to such video and television streaming
services - Netflix, Amazon Prime and other providers have clearly disrupted the
television sector.

Clever and far sited disrupters in other sectors will identify with the fan-centric
approach in media and entertainment disruption. They will ensure market
segmentation and customer acquisition and retention strategies are applied with the
same logic, utilising increasingly sophisticated data capture, algorithms, artificial
intelligence and automation as constituent parts of their product and service offering.
People who have acquired digitally advanced skills and experience from working with
major disrupters in media and entertainment will be in high demand by other industry
sectors.
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Financial Services

The second industry that is substantially disrupted by technological change is financial

services. One reason for that is the increasing competition of financial technology firms
that offer innovative products and services. This has led to a disruption in the most
profitable elements in the value chain of financial services, which include lending,
personal finance, mobile payments, and e-money (Carl Hugener, 2017).

The new disrupting firms often have better customer experience with reduced cost
derived from decentralised IT models. Traditional financial service companies with
centralised IT models are often less responsive and agile, making it difficult for them to
compete with the new, fast growth fintech companies. As a result, traditional financial
services companies are now adopting decentralised digital infrastructures, whereby IT
teams become embedded in each individual business unit and/or function, with the
resultant simplification of process, reduction in time, market-driven product and a more
customer-centric approach in totality. Artificial intelligence, machine learning and
customer analytics will drive client engagement and product development over the next
decade.

It was mentioned earlier that the UK government is supportive of efforts to digitise back
office activity, yet highly successful disrupters recognise the decision of the purchaser to
choose one company over another is often based on the ease of their first digital
interaction with it. Digitally advanced players in financial services and indeed all sectors,
recognise the need for a fully integrated digital approach to business process as the
way forward for them to be successful in the future.

The impact on leadership

Technology often has a significant impact on the operational processes of companies
and the emergence of new technologies can make business models outdated and even
obsolete. As a result, companies have to alter their approach to business and adapt to
digital change, in order to remain competitive. Risk taking companies will try to
implement the disruptive technology very quickly whilst risk-averse businesses will
hesitate with the integration of new technology in their business procedures, which
could pose the risk of falling behind and becoming losers. Companies that adopt the
new technology in efficient ways will gain the revenue that risk-averse companies lose.
(Investopedia, 2017).

Leadership behaviours forged over the last century clearly need updating for the digital
age. The Center for the Future of Work conducted its own research in 2017 which
reveals that the three key roles for leadership, data, artificial intelligence, algorithms
and the science of meaning making, will dominate business for the foreseeable future.
Many of todays leaders find themselves hampered by legacy business models,
excessive cost structures and workforces unable or unprepared to deal with the
blistering pace of change. We are now in the midst of a major economic shift, where
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business value increasingly accrues at the intersection of the digital and virtual worlds.
In this new competitive landscape, a new machine for work is emerging, powered by
data, algorithms, automation and artificial intelligence.

Now is the time to ask what it takes to lead an established company through this shift.
Some leaders will sense the opportunity, while others will buckle under the pressure of
fast-changing technology, intensifying customer expectations and waves of hungry
start-ups snapping at their heels. The role of the leader has never been this complex,
difficult, uncertain or important. Given these shifts, changes in leadership approaches
are mandatory, for not doing so risks losing key executives and staff who do not wish to
remain in career limiting organisations.

The impact on jobs

The scale of change taking place at the moment has been likened to the industrial
revolution but 10,000 times faster. Whereas with the industrial revolution job losses
were accompanied by huge job creation as the economy shifted from rural to urban,
there is no clear evidence that job losses as a result of digitisation will be replaced or
matched by job creation elsewhere. Some observers predict that between 35-45% of
all jobs in developed countries will either be lost or at least impacted upon by
technology over the next 10-15 years or so.

Job content is changing and will continue to do so at pace as well. In some case that will
free the job holder up to take on other tasks within the same function and in other
cases it will be subsumed into other jobs and functions altogether. By implication,
approaching half of all jobs will require different experiences, skills and competencies to
be carried out successfully which, in turn, will require those people managing them to
have an understanding of the digital impact on these jobs that people reporting into
them have to undertake.

As job content changes, so do the experiences, attributes and competencies to do the

roles successfully. To complicate matters further, two jobs in the same sector may have
significantly different content rooted in different business models which require a
different candidate profile. So it will not necessarily follow that candidates from
competitor companies or even the same industry sector will be the most appropriate
for the jobs of the future. This is true of the managers, executives and leaders as well.
The way we measure people will change as greater emphasis will have to be placed on
the competencies of data evaluation combined with innovative and creative thinking
and its impact on sound judgement and decision-making.

Ensuring that teams are made up of a variety of different ways of thinking and
operating will be necessary. Risk taking will increase with greater openness and
acceptance that failure is not a bad outcome as long as it shapes future ones positively.
This again works in favour of employing people with different experience gained in
different industries, environments and business models not unlike recruitment from
the automotive industry that led the way in the 1990s and early 2000s, on account of its
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advanced techniques in manufacturing processes, supply chain and quality

management.

The ten most advanced digital economies all have strong governmental influence.
Growth in advanced economies may be underpinned by improved productivity that
digitisation provides, but governments will also be concerned about the political and
social impact of significant job losses. Construction and transportation infrastructure,
renewable energy, electric and hydrogen vehicles and the commercialisation of
previously unpaid domestic and care work, provide governments with the opportunity
to be seen to shape and influence the direction of travel within a more digitised world.

The impact on recruitment

With digitisation companies are rapidly evolving their products, the way they deliver
them, and the processes that support them. Additionally, an increase in talent mobility
has led to increased volatility of hiring needs and greater uncertainty (CEB, 2015). Thus,
firms may rethink HR as a strategic partner rather than an order taker and recruiting
leaders need to adapt to the digital enterprise by changing from a service mind-set to a
leadership mind-set. This move would bring several outcomes to firms: a shift from
fixed to continuous planning, from a responsive hiring process to a predictive hiring
process, and from business-focused job design to a candidate-focused approach with a
consequent decrease in cost-per-hire, time to fill for new roles, and an increase in
recruiter productivity.

This proves that recruitment practices may no longer keep up with digitisation by
marginally improving their traditional processes. Some have adopted fully digital
measures and others have relocated recruiter CRM tools to cloud servers, for limited
cost reduction and minor efficiency improvements. Similarly, job boards were another
attempt of disruption in the recruitment industry but simply replaced press advertising.
LinkedIn and other forms of social recruiting represented a turning point in terms of the
evolution of the recruitment process, yet they did not bring true change, simply the
availability to read CVs online (Hutt 2017).

The investment that some recruiters are making in software application will be wasted.
The successful recruiter of the future will leverage the power of data science and
machine learning to aid identification of potential candidates. Yet the human expertise
in the engagement process and evaluation of candidates appropriateness will be the
critical factor. The key is to recognise how to utilise technology balanced with the need
for an experienced human interface which recognises and uses technology to simplify
and add pace to the process of recruitment but not the final decision.

The methods of assessment, whether for recruitment or development purposes, need

to be changed or re-calibrated at the very least. There are too many examples now of
people being assessed as underperformers in one business going on to another to
undertake similar roles and being stars. This is not because the benchmark for
performance measurement is much lower but much more to do with environment,
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training, tools to do the job, and culture set by the leaders, executives and managers of
the new business. It also has a great deal to do with the relevance of the product or
service offering to its customers, its business model and focus on customer satisfaction.
There will be clear delineation between the winners and the losers of tomorrow. There
will be a paradigm shift.

There is evidence now of companies becoming more comfortable with data and its
usage in the decision-making process. People who are more comfortable with data
tend to be able to arrive at workable solutions quicker than those who rely on previous
experience and tried and tested methodology. What worked yesterday may not work
tomorrow. The central pillar of successful digital implementation is a strategy that
understands the digital landscape and how it should be employed to reap the resultant
rewards it can bring. It is certainly not digital for digitals sake.

There is an increasing number of Chief Digital Officers (CDO), particularly in larger

corporate organisations who have the brief to challenge traditional thinking and
business models. Success or failure of the employment of CDOs is often down to two
criteria the relationship they have with the Chief Executive and the influence the role
has in the organisation. These executives tell us that success comes with a top-down,
full commitment to digital transformation, a culture that encourages data based
decision-making as well as the investment to make it achievable. CDOs maybe the
catalysts for change but their success is built on firm foundations laid throughout the
organisation by inspirational and far sited leaders who can communicate a vision of the
future that inspires everyone around them.

Executive opinions - summary and common trends

Confidential telephone interviews with a number of UK and internationally based UK
and non UK nationals from a variety of industry sectors were undertaken as an integral
part of the study, in order to sense check the information collated. Some were in senior
leadership, executive, non executive and advisory positions. Others were specifically
involved in digital transformation with the remainder employed in digitally aware or
digitally advanced companies at more junior level and at an earlier stage in their
careers.

The interviews were conducted by telephone whereby all the interviewees were asked
the same questions in order to gain a reliable set of answers and the questions were
sent to them in advance. The interviews were undertaken by the four international
students from CASS Business School in November 2017, from which the following key
themes were identified:

The overwhelming majority of respondents said that it was important for them
to work in digitally aware companies and most reported that they would prefer
to be in digitally advanced companies
Page 17

Some pointed up that the opportunities that will exist to work with digitally
aware companies could be more exciting than those in the digitally advanced
ones as there is more scope to make an impact

There was recognition, however, that there was less pressure to be digitally
advanced in those sectors which had yet to feel the full impact of digital
disruption

Age is a differentiator, with respondents under 30 years of age stating that they
would seek out digitally advanced companies to join

All companies that want to survive need to become digitally cohesive in the way
that they operate, otherwise they will be left behind and will not be able to
conduct business as efficiently and effectively as they need, with the resultant
negative impact on commercial performance

The digital technology employed must be usable by anyone and not everyone
has to be a digital expert. Ultimately technology is the tool which should be easy
to use, without the need for people to become experts. The hard thing about
digital is to make it easy. Companies should become digitally intensive but know
where technology is important and where it is not

The key to innovation is to ensure that there is an open dialogue at all levels
creating a level of comfort and promoting a culture of positive change. People
must be free to speak their minds. Communication vehicles within an
organisation can improve the speed at which people talk with each other and
drive innovation, particularly if there is easy access to data across the business.
Independent minds and thoughts can play an important role through the
introduction of innovative and creative problem resolution

Most large companies are risk averse yet innovation can be hugely beneficial
financially. The key to innovation is a structured approach and working on it at
every single level of an organisation it needs to be embedded in the whole DNA
of the company

People who are not open to new technology are unlikely to advance their careers
for it will be a significantly career limiting factor in future not to have digital skills

Managers and senior executives of the future must have extensive digital skills if
they are to take successful charge of companies. Without them, strategic
decisions could be made on misunderstandings

Yet this depends on the extent to which their organisations are part of the
process of digitisation. That is, the executives of a traditional company seeking
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to partner with a technology-led or digital partner will need to have the know-
how of how that technology or new digital interface will improve competitiveness
or drive the sought after scalability. They will have a solid appreciation of and a
good understanding of digitisation, but they do not need to be experts. On the
other hand, when the organisation offers digital services, then the executives
certainly need to be experts in their chosen field

Several respondents pointed up the importance of balancing digital interaction

with face to face or at least more personal interaction. This was evident in a
number of answers to different questions put to interviewees and of particular
concern to those who work in digitally advanced companies. There is often too
much reliance on digital communication email/intranet - internally in
organisations which is leading to employees disengagement

Digital strategies are an important component of marketing but there is evidence

that traditional marketing above and below the line advertising techniques are
being forgotten

Organisations should bring into their business people who think and act in an
intentionally different way than would traditionally be the case. In that
environment the people to be sought will be those who are willing to challenge
the status quo. It is very important to have exchange with people from outside
of the company or to empower somebody in the organisation or to have an
external partner who has the specific task of looking out for new possibilities

.
 Keith Miller

Haissam Fattah Carola Massa

Mariia Nikolaeva Tim Trautmann