Excerpted from Looking Ahead.
The evidence of digital’s power to create connections, change lives and drive new business models is all around us. For a deeper discussion of how digital is affecting everyday life and how digital tools are becoming an integral part of building a competitive organization, we spoke with Matthew Postgate, controller for BBC Research & Development. He also oversees the BBC’s Online Technology Group and is accountable for the BBC’s R&D intellectual property, licensing and patenting. During his time as BBC’s controller of mobile, he successfully led the relaunch of BBC Mobile to become the U.K.’s leading mobile site and led the delivery of BBC iPlayer (which he helped to launch) on mobile.
■ The digital instrumentation of life
We are in the middle of a very broad change in society that will have an impact on everything from logistics to entertainment. I call it the digital instrumentation of life.
Increasingly, the activities of people and machines are going to be measured and the resulting information will be used to change the way in which these activities take place, whether it’s shopping, healthcare or communication.
People in local government have already decided it’s a good idea to start machine-to-machine deployments by putting sensors in parking bays, so you know something is happening. When this sensing equipment starts to find its way into consumers’ hands there will be the kind of explosion we’ve seen in the mobile app space. The broader access and application of design alongside technology will allow these processes to become human; that’s when it’s most interesting. These new processes will be built around information rather than capital equipment and, in many ways, this defines the difference between the Information Age and the Industrial Age.
Having said that, as more and more information becomes available, we’re going to have to make some decisions about how it is used. The approach we take as we make this transition as a society will set the foundations for many years to come. At the moment there is a dominant model that trades privacy for indirect revenue. I think we will begin see the rise of paid-for digital services — business models that are subscription-based rather than advertising-funded — and long-term investments underwritten by large organizations and by governments which see the benefit somewhere else in their cost or revenue model.
■ Adapting to become competitive
With the accelerating pace of change, organizations have to be adaptable, but many leaders don’t accept that empirical fact. In 10 to 15 years’ time, the successful organizations are going to have a very different shape and a different set of activities if they are to continue the success they’ve had in the Industrial Age. Many organizations are trying to skill up in this area, but what they are avoiding is reskilling.
We’ve moved beyond the phase where you address the transition to digital by building another operating unit on the side of your existing enterprise. We’re now at the stage where you have to look deep into your organization to find the right mix of skills to address this very different opportunity.
One way that organizations can cope with this transition in the near term is outsourcing and using a supplier-centric model. However, organizations need to stop thinking of technology as a homogenous activity. Instead, identify which elements are strategically important and ensure you have an internal capability to deliver them. You can then use the market to drive cost efficiency for other elements of your technology capability that are either less strategic or more commoditized. That isn’t the sort of lens that is normally applied to those insource/outsource decisions, but it should be your starting point because your internal strategic technology capability is going to be the single most defining element of your competitiveness in the next 10 to 20 years.
■ Creating a distributed workforce
There’s a significant competition for talent and companies need to look more globally for the talent they need. The U.S. has a huge advantage in terms of scale, the size of its domestic market and how vibrant it is and how open to new ideas. If you are a non-U.S. multinational without access to the U.S. labor market, it is very difficult for you to compete for that talent so you need to look at an alternative solution — in other words, look more broadly at a federated way of plugging the skills gaps.
You need to look further afield to the increasingly skilled workforces of China, India and Eastern Europe and develop a distributed network to help develop new technologies. Quite frankly, a non-U.S.-based company has got a better chance of doing that than trying to recruit technology staff from the West Coast who have the pick of the jobs. Understanding how you can develop and then integrate these distributed teams together is going to be critical.
■ The secret to managing smart, creative people
In my experience, there are three elements that motivate smart, technical people [in digital roles]: they need to have interesting problems to work on, fantastic people to work with and the tools that they want to do the job.
First, with a deft management style you have to keep people motivated, ensuring that the interesting jobs get passed around, while communicating the strategic importance of challenges that are seen as less interesting. For example, at the BBC, everybody wants to work with iPlayer, but we need some people to really focus on our B2B enterprise systems. If we want competitiveness, we need that competitiveness to start at the beginning of our production chain. We once set an ambition that we would never launch an internal-facing tool that we would not be prepared to put in front of our audiences. The reason this is important is because it directly translates into the kind of services that audiences consume. Nevertheless, it is still hard to deploy the same level of resources further away from where the value is most obviously created; a degree of pragmatism is inevitable.
Second, great people like working with other great people. They will come and work for you if they believe you’re serious about this new way of operating and in turn they will attract other great people. Good people don’t always stick around, but it’s so important that they do, not least because they attract each other. You have to have a two- to three-year view and track whether you’re getting more good people in than you’re losing. Equally, one or two bad people can have a really corrosive effect, so you need to maintain a perspective about that mix. You also need to find a way of recognizing and rewarding the really great people as they are catalysts and have a disproportionate impact.
The final piece is giving people the right tools for the jobs. We are talking about a generation for whom domestic IT is more advanced than enterprise IT. It can be incredibly demotivating for this group; it’s really important to balance enterprise prerogatives such as security and value for money with this reality. Having the best tools is absolutely critical, or you can quickly undo all the work that you put into the first two.