In the few decades leading up to the financial crisis in 2007-08, strategic decisions in UK businesses were by and large taken by the CFO (Chief Financial Officer). In Germany, it was the province of the Engineer to take them while the Sales & Marketing people were the key decision-makers in the US.
Yet, with the rise of anything digital: technologies, trade and services, the center of gravity of global economic activity is moving East. And wherever the location of your organisation, be it small or large, leaders are required to acquire and develop a set of core skills that will increase business performance.
Technological experience for functional leaders
CEOs and leaders from all sectors are required to have a business acumen; that is to learn about business, bring innovation, critical thinking to shape the bottom line and create distinctive value. Before the downturn in 2009, tracking powerhouses such as the US, Germany and the UK was giving a good indicator of the health of the global economy. Now with the ubiquity of digital technologies, the weight of the services economy coupled with the drive from emerging markets, this is no longer the case. A study by BCG The Last Decade Was Great, but What About the Next? | BCG revealed that in 2009 there were only 2 technology companies in the top 10 (in terms of market capitalization: that is typically the cost to acquire a company netted of the cash available) whereas this number jumped to 7 in 2019.
How did it happen ? They all took advantage of digital ecosystems.
Furthermore, COVID-19 has accelerated the importance of digital technologies among entrepreneurs, startup founders and owners of fledgling SMEs. AI, Big data, Cloud computing and Data science can provide companies with the means and tools to leverage data and consumer insights, to understand customer behaviour in order to unlock the sales process and generate growth.
There is now a pressing need for technological experience from functional leaders who may have moved through the siloed ranks in their companies, unable to take a Weltanschauung view, a broad and strategic perspective of the issues that will impact the bottom line and meet the needs of the stakeholders.
As noted in 2019 by Charlie Grubb, UK Managing Director, Robert Half Executive Search, ‘’this is a trend that is increasingly becoming a focus for executives and senior leadership hires within a business as well – especially when coupled with invaluable skills such as communication, adaptability and resilience’’.
As an example, such short courses can be found here Short executive training courses, London| Imperial College Business School
Example scenario for a startup founder
You are an accomplished manufacturing engineer with several years under the belt in industry. You have become a paragon of excellence in your field. Your early-stage startup has experienced 2 distinct challenges in the last few months:
- Marketing strategy and competitive advantage: You’ll be looking at issues such as Brand, Go-to-market strategies, Pricing, Sales force design and management, Business analytics, Global supply chain
- Demand rise for your product: Your startup has faced a rapid surge in demand for your product. You also know that you have to care for 3 key tasks: Making investment decisions, Making financing decisions and Managing cash flows. In this situation, would you raise prices or increase production? You decide to increase production thanks to the insights you got from your digital marketing. At this stage, a new plant is required: do you intend to rent or purchase the plant? If finally, you are to purchase the plant, would you pay cash or borrow the funds needed?
All this decision-making process would have taken into consideration your resources and capabilities including:
- Analysing the potential competitor’s response to a price increase
- Determining how sensitive the increase in demand is from lowering the price of your product
- Estimating the cost savings from upgrading the plant
- Forecasting the resultant of an increase in revenue from opting for some digital advertising.
Every business decision hinges on a host of situations relating to markets, competitors and organisational capabilities. And in the digital era, leaders should view technology through a business lens not just a technological perspective. This is because digital technologies bring out challenges as well as opportunities across all sectors and industries. No matter the role the leader holds in an organisation or a small business, short courses to upskill or reskill provide knowledge of the impact of digitalisation – as well as an understanding of why and how financial/ risk management decisions are made.
The result is competitive advantage and improved decision-making.