Steering businesses towards sustainable prosperity in the digitalised Next Normal will demand bold leadership at all levels to plan for rapidly changing uncertain future, according to key regional industry and government speakers at an online leadership summit hosted from Kuala Lumpur, Malaysia.
This year’s TM ONE’s third annual gathering of leaders this year, LEAP Summit, was held virtually for the first time. In his welcome remarks, Telekom Malaysia Group COO Ir. Azizi A Hadi added another level of thought to the conversation of transformation as a fundamental creative, disruptive force as discussed at last year’s event.
Azizi said that jumpstarting economic recovery through digital transformation is more of an imperative than ever before. “This year, the entire world has been caught off-guard by an unfortunate confluence of crises, which has pushed much of the global economy into depression.”
Navigating the coming year and a half for instance requires a stringent focus on driving resilience to survive and to reach a competitive place in today’s sensitive market.
“Refreshing our strategies will help us mine the gold from our nation’s strong tradition of cross-sector partnerships, and we must really intensify the imperative of exploring digital technologies,” he continued. “In recent months, we have all seen numerous news reports of how technology has emerged as a powerful lifeline in combating this pandemic and ensuring business sustainability.”
Getting to grips with transformation remain vague. Definitions of digital transformation (referred to sometimes as DX or DT) are equally dynamic. One of these from the University of Washington refers to digital transformation as the change associated with applying digital technologies to all aspects of human society.
The group CEO’s keynote included local transformation examples across various sectors bearing out in part Bain & Company’s finding that Malaysia has leapt forward in the digitisation stakes with a surge that saw five years’ worth of digital transformation development taking place in just one year.
According to the study, with a more than 60 million increase in digital consumers from 2018 – 2020, 7 in 10 Southeast Asian consumers will have gone digital by the end of 2020.
In addition, Google, Temasek Holdings together with Bain & Company also highlight that about 40 million people in six countries across the region — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand — came online for the first time in 2020.
“We need to rapidly reshuffle the strategic chess pieces to cut a more efficient path to innovate, and organically transform traditional processes, and foster growth opportunities in the Next Normal,” he emphasised.
“Together, we must strategise to boost economic recovery, galvanise partnerships and prepare to upskill ourselves and continue our essential growth trajectory into the digital era as a digital nation,” he added, alluding to the group’s Digital Malaysia drive.
“Today, TM is set to undergo yet another stride in its evolution” he added. “We all have heard the buzz about ‘the Future of Work’. Our workforce must be ready to live and prosper in the new digital era. Getting people, skills, and culture right remains paramount for us.”
Third National Utility and Data
Following his tabling of Malaysia’s Budget 2021 proposals in Parliament just a few days before the LEAP event, the country’s finance minister YB Senator Tengku Dato’ Sri Zafrul Abdul Aziz’s keynote at the LEAP summit welcomed and urged industry’s digital transformation efforts as a major imperative in recharging the economy.
He outlined some of the government’s essential building blocks to assist the Rakyat [the people] in the digital transition, including the push towards eWallets and policy changes such as the sandbox. In addition to Budget proposals, the government recently announced a national Digital Economy and Fourth Industrial Revolution (4IR) Council, which set policies and monitor national digitalisation initiatives.
In addition to the country’s longstanding PPP (public-private partnerships) platform, the minister singled out the country’s connectivity infrastructure providers collectively as the ‘third national utility’.
Acknowledging this utility’s foundational role in the digital economy, he agreed that failure to unlock the value of data intelligence could sound the death knell for many organisations. ‘In the age of the Internet of Things (IoT) and Artificial Intelligence (AI), data is the oxygen.’
According to Statista, the total amount of data created, captured, copied and consumed worldwide is forecast to increase rapidly, reaching 59 zettabytes by the end of 2020.
Companies need to acquire competitive data intelligence and understand how to apply it in different scenarios, as well as increase business efficiency and performance. He said that the government encourages R&D to support science and technology initiatives to bring value to Malaysians. Some of the public sector’s own digital adoption efforts include “utilising data analytics to measure the impact of stimulus package measures introduced this year.”
Today’s complex ecosystem of people, processes, and rapidly evolving technologies hinges on forming and executing appropriately planned journeys, which accounts for the theme of a live dialogue session in the event’s agenda.
Overcoming uncertainty with scenario planning
According to the World Economic Forum’s action platform, leaders should prioritise and accelerate digital transformation in a holistic, sustainable manner – and scenario planning offers a particularly effective avenue especially with preparing for the next normal by addressing potential threats that may tip the equilibrium of their businesses.
Speaking from the UK, Dr Rafael Ramirez, Director of the Oxford Scenario Programme and Professor of Practice, Oxford University, joined by Chris Leong, CMO of Schneider Electric Hong Kong, participated in an in-depth session on scenario planning moderated from Singapore by Manoj Menon, well-known analyst and founder of twimbit.
Scenario planning is often described as a holistic, in-depth process of imaging and developing potential courses of actions for various “what if” scenarios.
In his introductory remarks, Dr Ramirez said scenario planning is essentially simple: “What we do is invent useful points of view from the future in order to look at the present. When I advise organisations in the public or private sector, I encourage them to ask themselves what kind of tomorrow will our current strategy enhance? With scenario planning, we focus on the context that the strategy is going to inhabit.”
“For example. whenever you form a plan for launching products or hiring or whatever it is you intend to do, you are already attending to the context. This is acceptable providing the context is a given,” he continued. “However, in the situation we are in today – with the health pandemic, geopolitical tensions in Asia, and so forth – we can no longer take a context [scenario] for granted. So we need to spend more planning time to assess potential contexts.”
Proactively positioned organisations are increasingly adopting this holistic approach to remain flexible and agile and to control costs, avoid disruptions and remain competitive. “Many companies have adopted scenario planning to lay out the possible alternative futures and anticipate them. Businesses are typically a unique combination of a complex chain of contingent events and impacts.”
Former students, including those working in Malaysia, will look at various contexts. “We think of different contexts/futures and prepare strategies for these to enable more agile pivoting; we do not predict.”
The process requires organisations to envisage various alternative futures. One of the many organisations adopting scenario planning, the 180+-year-old energy company Schneider Electric has much experience navigating multiple crises, says Chris Leong.
Acknowledging the help given by Dr Ramirez in recent years, she said: “In simple terms, scenario planning is helping us navigate in a more holistic manner by mitigating crises whenever the need arises. To set some context. We have made a series of scenario planning contexts. For our company, preparing for climate change contexts has spurred many scenario planning exercises. Sustainability and efficiency are the keys that drive our strategy: our purpose is about bridging sustainability for all. “
A forecast is not a scenario
Dr Ramirez emphasised that a forecast is not a scenario. “Forecasts can be wrong. For example, the outcome of 2016 American election was wrong. Forecasters use yesterday’s data. For certain things such as calculating data traffic, and so on, this can be useful, but it doesn’t work well with uncertain futures.”
“While scenario planning can inform business continuity planning, scenarios planning is about preparing for an alternative future. On a national level, for example, diabetes was the single biggest disease challenge for the UK – prior to Covid-19,” he continued. “Scenario planning involves thinking far enough ahead to get a different enough view from the present. Ten (10) years – or even 5 years ahead – is a long time for many industries.”
Asked about the difference between scenario vs traditional planning, Sri Ramirez remarked: “If you cannot predict the future context, then scenario planning is very helpful.”
According to Chris Leong, Schneider Electric’s own scenario planning is refreshed every three years, and being a unique conglomeration of factors, each organisation will need to find its own approach. The company’s facets are guided on a foundation of digitalisation, energy transition and sustainability.
The key is that scenario planning is about direction-finding and strategy formation rather than futurology. Scenario planning teams are encouraged to reframe their mindsets of probable uncertain situations in the near future.
In these turbulent times, a collaborative scenario planning involving all key stakeholders is essential, Dr Ramirez stressed. Many case studies are readily available, such as a former student who advised retailers in New York for small and not-so-small retailers to develop a different finance retail model to suit their needs.
He adds that, “A lot of companies use scenario planning confidentially to avoid signalling their strategic positioning; some are openly proud – such as Germany’s Merck.”
Who should be responsible?
“To prepare organisational resilience, I very strongly advise people to make their own scenarios internally. For example, some people used World Economic Forum scenarios that were not really appropriate. It is worth investing time and resources in your developing your own scenario set.”
He also is strong on the point of prioritising a team focused on scenario planning. “Keep [it] separate. The Board of the IMF (International Monetary Foundation), for example, switch deliberately to being scenario planning team when appropriate. A Verizon planner summarised it well with ‘we are working on the company, not in the company.”
Dr Ramirez also offered another rule of thumb on the number of contexts an organisation should plan. “At least two, and no more than four will suit our cognitive capacity – when imagining different futures.”
“I have to be practical, and one of the approaches we developed at Oxford is that scenario planning is to be useful, not truthful. So we focus on which questions/assumptions we have today, and which trends we are depending on.”
“What alternatives can we imagine? And how soon should we be prepared? We design scenarios for today for a particular purpose,” he said. “The clearer the purpose and the user, the more effective the planning will be.”
When detailing uses of scenario planning in Schneider Electric, Chris Leong notes that one of the challenges that Schneider or a telecom faces today is the scenario of addressing the energy demands of emerging technologies. “Episode one of digital was indeed about connecting people to people. But the next episode of digital is about IoT, which is connecting people to machine, machine to machine, and system to cloud.”
“The technology already exists today to help with the planning, design and construction [and implementation] of projects – but all must be connected to avoid about 30% wastage,” she added.
“It’s good to have a plan, but it takes courage, commitment and guts to make it happen,” she continued. “We need the right leadership, and people culture to make plans happen. In our brave new world, we need to be bold, to collaborate, and be agile and move fast. Opportunities are perishables. Disrupt, or be disrupted, digitisation is a journey and not a destination. Just get on the digital track.”
“Scenario planning looks at the deep, uncertain future,” summarized Dr Ramirez. “And if that future is different from the one that is expected, can we become agile enough to shift from A to B, and be able to pivot our strategy from the one future that we planned for?”
The cloud and work-life balance
In his closing remarks, TM ONE’s executive vice president and CEO Ahmad Taufek Omar (pictured left) included examples of TM ONE’s role in enabling industry and Malaysia to move forward.
One much touted engine of resilience is digitalisation. Unfortunately, the reality is that many analyst findings concur in spirt with IDC’s latest report, which finds that up to 80% of Malaysian companies still lack a cohesive digital strategy.
Urging leaders to adopt technology to become nimble and resilient, he added: “In the next normal, we must be agile: we need to take advantage of cloud to innovate at scale, to respond rapidly to the market; the ability to store, and derive insights from data will open up opportunities for growth and new business value. Ask yourself whether your assets and infrastructure is robust and flexible enough to pivot and scale rapidly to address different scenarios.”
Just 30% of digital transformation projects are successful. Coupled with the right Cloud platform, a mindset shift is a must. Ahmad Taufek considers getting the human-machine balance is perhaps the transformation driver that poses the greatest challenge.
“Transformation is much more than just about process and technology; it’s about human transformation; it’s about people sharing an agile mindset that embraces change. Resistance from within your organisation will hamper any transformation initiative. The is where we are most needed as business leaders, to become chief evangelists, building the culture and driving change throughout our organisation.”
In addition to inadvertently fuelling a surge of digitalisation this year, the pandemic has brought into sharp focus an opportunity to redefine work-life balance, he said.
“The needs of people is what drives meaningful digital transformation,” he said, adding later: “We have got to focus on real needs in the real world – and proactively address what people need. This is the challenge in the changing business landscape. It’s a huge opportunity for recovery but even But more importantly, it is opportunity to rebalance our work-life balance.”
“So let us move forwards by taking control of digitalisation – so that we become masters of digital technology – let us embrace the opportunities to make our everyday lives richer and to create a better world for humanity through taking our transformation forward wisely,” he concluded. “We must be nimble and agile enough or we may find ourselves irrelevant in the near future.”