As we kick off the new lunar year, C-suite executives, no matter where they are in their corporate calendar year, are under pressure to deliver healthy business improvements.
No different than individual promises to exercise more, imbibe less alcohol or eat more nutritious fruits and vegetables, investors, boards and employees look to their corporate leaders for renewed promises of corporate transformations.
Think about the language we use to describe well-run businesses: corporations with “healthy balance sheets” are “lean” or have “strong growth potential” while weaker ones have “bloated” budgets or headcounts that need to be “trimmed”.
One way C-suite executives can deliver on corporate new year’s resolutions to get fit now, is to focus on transforming the core, which itself sounds like another health advisory to do more planks and crunches.
But what we mean is companies – particularly healthy ones who have enjoyed consistent growth – shouldn’t assume they are immune to digital disruption.
Rather, they should use digital tools to unlock trapped value and growth in their core businesses to generate the necessary capital to innovate.
A key source of trapped value is sitting right in the data at many executive’s fingertips.
For example, China’s Shanghai Zhenhua Heavy Industries is reinventing its business model away from traditional equipment manufacturing to become a service provider of port solutions. As part of this transition, the company is leveraging an intelligent data retrieval and monitoring platform for its global fleet of machinery.
In other words, it is using the data it already has to help it build new business models.
Individual corporations could also more transparently mine their own data for the benefit of both employees and the company. Platforms such as ServiceNow integrate core systems to support enterprise service management. It has tools to harnesses machine learning and pattern recognition to automate work, bringing new levels of speed and efficiency to service organisations and internal processes.
Alibaba has been trailblazing leveraging data for its own business growth as well its customers. Consider how it has signed strategic agreements with multinational corporations such as PepsiCo, giving the beverage company access to its data so it could introduce innovative marketing initiatives, customized products and integrated omnichannel solutions in the China market.
But Alibaba isn’t just serving as an e-commerce platform for multinationals, it’s also a data and insights provider – to customers and its own businesses.
One of Alibaba’s affiliate companies, Ant Financial, for example, offers businesses microloans in a matter of minutes. It can decide how much and at what interest rate to lend by analyzing the data the customers provide and using algorithms to assess risk based on how well the business is performing.
As executives consider how to deliver on corporate new year’s resolutions, leveraging data should be top of mind.
And crucial to this advice is ethical use of the data. If you start collecting and mining data without buy-in from your customers and staff, you risk distrust and ultimately potential business losses due to that distrust.
Accenture’s advice is to involve a broad range of employees in designing data collection and use systems.
Create checks and balances: a single C-level executive must be held accountable but must be supported by a broader coalition of C-level execs, the board of directors and external experts, such as ethicists.
And consider including people with HEAT skills (humanities and arts, not just science and technology); encourage people to challenge algorithms that make decisions by incorporating feedback apps in the data collection systems.
Ensuring employees that ethics are front and center and that its use is to everyone’s benefit not only could improve business efficiency - it could also improve morale. And that’s healthy.
This article was first published on Questex, on 14 February 2019. Information is correct at the time of publication.