Dame Frances Cairncross discusses business leaders’ approach to digital disruption, planning and how putting in place the right talent will shape the way their business responds to technological change.
To borrow from Dickens, these are the best of times and the worst of times.
Brexit promises great disruption but also great opportunity. Brexit will be a mess for a year or two whatever happens, yet disrupted trade between Britain and the continent may present opportunities.
Some of your customers may decide it is simpler to buy from your business than from Europe.
The UK is a faster-growing market than the main European economies and it may be that the home market is a better bet anyway right now.
It is also important to remember that most growth in the medium and long term is not going to be in Europe, it will be in India, China and the US. Perhaps Brexit will serve to focus minds on that reality.
Similar disruption is coming from new technologies that are combining to upend almost every sector and marketplace – a threat but also creating scope for new products and services hitherto unimagined for those with the right insights.
The world is your market
The potential to use digital technology is enormous but the threat is also as big. The world is your market now if your product is good.
On the other hand, someone making a better product than you is also able to reach your customers with greater ease. You now have to think hard about your market and the scope of your competition.
It is your approach to these powerful forces as a business leader that matters. One of the things the internet allows you to do is see who is doing clever things in other countries and apply those ideas to your business at home, for example.
Your approach to talent will also shape your response to technological change.
Every small business needs to be in touch with and employing, at least on a part-time basis, somebody under the age of 30 who is a digital native. They will instinctively understand how to use social media and can learn how to better communicate your product.
Are you in touch with a local secondary school and is someone there your talent spotter? It can pay to recruit a bright young person for a year. They can earn money before university and perhaps they will realise they should stick around and learn more on the job than they will at university.
Planning for disruption
It is also wise to develop ties with the local university. Have you talked to the head of the relevant department or the vice chancellor about work they are doing or could do in your field?
Could they scour the internet to look at what is happening at the edges of your field and supply you with the research?
Businesses and universities don’t use each other enough and there are schemes set up to help, such as graduate apprenticeships. These are a good way of getting staff to think about the business afresh and shake up your ideas.
Shaping your planning process to enable your business to be able to react to an era of disruption is also important.
One or two years is a very sensible planning time horizon to have. It’s very difficult now to have a time horizon that stretches beyond two years. Things change fast and you have to think about how to jump onto the next opportunity.
This includes putting in place plans for the possibility of recession. We’ve had a long and quite shallow recovery since 2007. All recoveries eventually come to an end and the end of this one might be in the next 18 months, not just in the UK but in other countries too. Companies have to have some sense of what they will do if growth slows down.
It also pays to have a plan for future interest rate rises. It may be hard to see them going up at the moment but at some point we will get back to more normal rates.
To hear more from Dame Frances Cairncross, economist, academic, author and former chairwoman of Britain’s Economic and Social Research Council, book your place at one of Price Bailey’s Inside the Minds of Business Leaders 2019 events, where she will be a panellist and discuss further interesting research and business insights. For more information and to attend one of the events, visit pricebailey.co.uk/leaders2019
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