As Salesforce.com CEO Marc Benioff rightly said, "Speed is the new currency of business. If you're not going fast enough, someone else is." In an age when a start-up can reshape an entire industry overnight, businesses must be on their A-game. For instance, Alipay, the world's biggest payment company, had hit $100 billion in transactions in less than a year with zero branches, while DBS Bank in Singapore took 50 years to reach the same milestone. It is not a coincidence that many shareholders' reports of S&P 500 companies are littered with "speed," "fast" and their synonyms today. The stakes are higher because the pace of business change has intensified dramatically.
The speed of doing business, generating value, making decisions, meeting customer expectations and getting products and services to market decide whether you are moving ahead or lagging behind. In short, time-to-everything matters more than any other strategic imperative. In particular, there are five approaches that set the speed context and leaders need to be brutally honest about the current pace of change in their organization on each of the five areas:
- Speed to automation. If you've spent most of your career around ERP and Six Sigma, you'll know that 3% to 5% efficiency gains were once considered big. It's a different ballgame now. According to our Work Ahead research, applying robotic process automation (RPA) to long-standing core business processes can drive 30% to 60% (or even more) of costs out of a business's operations, with error rates plummeting to near zero. This is the reason more than half (55%) of companies recently surveyed are either piloting or planning to adopt RPA, while 10% are already applying automation to their core processes. Businesses should set a target to double the speed of their core processes to double their cost savings and time-to-market improvements.
- Speed to monetize halos of information. Massive data volumes and the pressure to derive insights from it are creating a digital overload for many companies at a time when they need to accelerate the speed of decision-making in their organizations. Companies that use advanced analytics and machine learning are twice as likely to be top-quartile financial performers, and three times more likely to execute effective decisions. To stay ahead of the curve, businesses should set a target for the next 12 months to match their decision-making speed to that of anticipated growth in data volumes. For instance, if you expect a 30% annual growth in data over the next 12 months, then the organization's speed of making insights and applying data intelligence needs to accelerate by 30% during the same period. Anything less is going to impact the speed of doing business in this fast-changing world.
- Speed to enhance the workforce. The enhanced workforce is the new workforce. Rather than jobs being eliminated, it is more likely they will be altered or enhanced by bots. Moving to the cloud, automating back- and middle-office processes and workflows, and leveraging bots to address employee and customer support will not only eliminate mundane technical and maintenance tasks but also drive greater operational efficiency. For example, the team at Amazon Web Services uses AI to improve employee efficiency and decision-making by suggesting the best places to focus their attention each day. Businesses should set a target to enhance every person in the organization to speed up the company's performance, as well as help workers focus on the more human elements of the job (strategic thinking, leadership, decision-making, innovation, among others) to double their output or greatly increase their quality of delivery.
- Speed to abundance. Simply put, as prices decline, demand typically rises; once a mass market is created, customers become bought into the need for the product and/or service. This, in essence, is the definition of abundance. Businesses can create markets of abundance by leveraging AI, analytics, and automation to drive down the price point of products or services to compete and win in low-cost, high-volume markets. A good example is the success of Reliance Jio, a new telecom company in India, which aims to provide data services for as little as the cost of a postcard. The business reached 100 million subscribers in just 170 days, or roughly seven users per second per day, forcing the competition to lower their prices. Aim for lower-cost, high-volume approach for your business.
- Speed to discovery. Innovation is central to remaining relevant. By leveraging the new machine, businesses can conceive of entirely new products, new services and new industries for the digital economy. Companies that are trying to establish their digital strategy for triggering innovation must rip up the rulebook. For instance, A3, the innovation outpost of Airbus, recently embarked on development of an on-demand service for urban helicopter transport, usable via a mobile app. This would connect passengers and operators, making helicopters more accessible and affordable. In another example, Tesla cars use "over the air" software updates, eliminating the need for owners to bring their cars to the dealer.
The speed of change that leaders set will determine how fast or slow they grow their business in the years to come. Companies that accelerate by automating everything they can, instrumenting everything they can, enhancing every worker they can, driving the price points of their products and services as low as they can, and discovering and inventing all their possible futures will be best positioned to take advantage of the new machine age.
Learn more about the speed context and acquire the insights you need to set the right speed of your business by checking out our new report, "Fast, But Not Furious."