Community Conversation reveals that businesses will be left behind when they don’t embrace change.
During an intimate CFO Community Conversation, which was sponsored by Workday, attendees reflected on the new normal of uncertainty and how it affects business, industries and decision-making.
The discussion, which was entitled Looking for, embracing and benefiting from uncertainty, kicked off with CFO South Africa community manager Brian Chivere setting the scene around disruption, which can be leveraged as an opportunity or faced as a threat.
Brian highlighted the possibility of businesses being left behind when they do not embrace change by quoting former Nokia CEO Stephen Elop, who said “We didn’t do anything wrong, but somehow we lost”.
With this sobering thought Brian outlined current disruptions on three levels: the digital divide, community retail and product as a service.
“With the digital divide, players should be able to close the digital divide more aggressively. The existing gap is between consumers’ digital behaviours and expectations and the retailer’s ability to deliver the desired experiences,” he explained.
“In the past there was the retailer with the product and price. Now there is community retail, so the consumer can go to any retailer to get multiple services. He or she can go to a supermarket and do banking or medical aid for insurance. Businesses are therefore starting to think about how we utilise these consumer communities,” he added.
Brian further pointed out that even pre-pandemic the product as a service concept was already disrupting the marketplace.
“It speaks to platforms specifically, like Uber. The buyer no longer needs to own a physical thing: the product is delivered as a service or virtualised experience. The product is not purely a price point. Consumers are looking at additional value from the relationship,” he said.
Consumer disruption framework
With this as the backdrop, Brian presented a framework for consumer disruption, adapted from the traditional 5P marketing model:
- Value (price): Products are hired for a solution and not owned forever;
- Omni-channel (place): Proximity to target communities and available anywhere at anytime or everywhere, all the time;
- Relationship (promotion): The ability to digitally influence the consumer and deliver the desired experiences;
- Relevance (positioning): A composition of timely, relevant and customised offerings with access to an external ecosystem through platform business modelling; and
- Solution (product): Consumers subscribe to a service and pay a recurring fee.
It was against this backdrop that engaged attendees provided their views on the concept of disruption and embracing innovation in a constantly changing world.
Craig Sumption, CFO at Hatch, weighed in with the concept that change is not always radical but rather consistent and deliberate and being flexible to adjust and adapt to circumstances.
“You need to have change and be prepared to change. A lot of people think it’s about radical change, but it’s not always that. Our industry hasn’t required radical change to take place, however we have been working at change over the years in the major sectors of metals, energy and infrastructure. We are all still learning and growing, including clients, to do some things differently by using the digital tools available,” he said.
“It’s not a radical switch, we have gradually moved, are consistent and continuously monitor to change with the times and not get left behind. For example, many companies are currently struggling with cash flow and are now asking for cash upfront and we have had to adapt to that,” he added.
Embrace ESG
Masibulele Dem, CFO and interim CEO at Hulisani, added, “When we talk change, we talk uncertainty. We are talking about something that is here to stay. The only choice we have is how to adapt, and that calls for a greater need for flexibility within business and strengthening elements within ourselves as well,” he pointed out.
“You have to give yourself to the process. What you knew two years ago is no longer relevant and that talks to our ability to learn, absorb and process information and respond accordingly. I can compare it to a chameleon: changing with the environment is an absolute necessity. It’s going to accelerate even more going forward, and it will be on multiple levels, which will make it unbearable for those who are not willing to change,” he cautioned.
