Getting personal in the digital age
Posted by James O'Reilly
As I reflect on my 30 years in business, I’ve realized that so much that has been taught in school and university and written in magazines, articles and papers, is skewed towards product centric business models, like the famous lemonade stand. Yet look at any data from the OECD or World Bank and you will see that most developing countries have over 70% of their GDP coming from services while in developed countries many are over 60%; which is typically 10-20% higher than a generation ago.
As the digital revolution expands, what is increasingly clear is that the real value opportunity to be traded in this new economy will not be physical property, nor baseline services, but smart services that contain significant amounts of intellectual property; and intellectual property is created by people.
So what does this mean for businesses? Future cashflows now reside in the minds of your people, not the shelves of your warehouse. This leads to a host of management challenges including:
- How do you secure & protect your teams?
- How to do you scale your teams?
- How do you retain your people?
- And how do you compensate your people?
When it comes to corporate IT systems, consider the table below, and how the measurement systems and modules for a product centric business are just not suitable for the digital age.
|Measures||Product-centric Systems||People-centric Systems|
|Stock||Aged inventory, obsolescence||Tenure, experience, development|
|Value Add||Gross margin||Capacity, capability, utilisation|
|Expenses||Geographic, departmental||Customer and project centric|
|Investment||Plant and equipment||People and training|
|Development||R&D - patents||Process|
What I see is quite simple; If you want to get involved and thrive in the digital revolution you need to get personal, and to get personal at scale you need systems that are people-centric.