Video transcript: The transformation imperative

Transcript

Marco Amitrano: One of the things you've said a few times and you said it in our CEO survey is, look, if you're not in the digital economy, you're not in the economy. Right now, coming, further down the line?

Steve Hare: Yeah, I mean, we're in it. We're in it now, but you still have time. So it's just part of what you've got to do. I think, you know, what I try to encourage people to do, is don't see it as a big bang, right? You don't have to do everything all at once. But what you have to do is, you have to participate. Because you can do more and more over time. But the world is a digital place.

Marco: Yeah, no two transformations are the same. And actually what transformation tends to have is multiple components and no one single roadmap through them. Often when our clients come to us to help with a transformation challenge, it can start in a small part of the operating model. It could be about finance, it can be about workforce or it can be about customer needs. And it is, that to me is where transformation, as a word, could almost sound like a straightforward linear thing. And actually it's far from that. It's everything but that.

Steve: It’s very exciting. And I think the people who embrace it, whether they're in a small business or a big business, will thrive. And if you don't embrace it, you might not be here.

Marco: Back to the CEO survey, 22% of chief execs in the UK said that their current business model will not survive the decade. You know, imperative to change, imperative to transform. Good thing or bad thing?

Steve: I think it's a good thing. If you look at high performing businesses over the years, what they're good at is embracing change as it happens. They look at what do their customers need? How can I do that better? How can I do that? How can I differentiate myself against my competitors? These sorts of things, they're good, they're good for businesses to just constantly challenge. Are they doing the best for their customers?

Marco: So flipping back to your own organisation, to Sage, where are you today, in your view, in terms of that transformation and the instinctiveness of people doing things more digitally or trying to find the way of doing things more digitally, because people are at the heart of transformation, aren’t they?

Steve: Yeah, exactly. Our transformation is driven by the experience, both for our customers and for our colleagues, because at the end of the day, what you have, you've got technology and you've got people right, and you need to try and connect those two things together.

Marco: We're not scripted here, but if we were, I would have scripted you on that very point about the interaction between humans and technology. That is at the heart of PwC, how we position ourselves, you know, in a very crowded market to help clients transform. But this idea of human-led, tech-powered, that combination and indeed the CEO survey that you took part in, one of the big messages coming out was organisations doubling down not only on the technology built on upskilling their people. You see the difference between successful and unsuccessful transformations is the wisdom that gets applied. As a good old friend of mine once put it to me, you know, knowledge is knowing a tomato is a fruit. Wisdom is knowing not to put it in a fruit salad. And actually we walk into transformations and see a lot of tomatoes put in fruit salads.

Steve: It's such a big subject. It's such a big subject. Knowledge is going to be and already is much more commoditised. You can go on to the internet, you can go on to things like chatGPT, you can ask questions and huge amounts of information is made available to you.

Marco: So you don't need to think any more.

Steve: No. But actually what you need is to really hone people's judgement skills. What do you do with all this information? We're all going to have a lot more information and I think the danger or the challenge in society is we need to be really curious and really challenging. We will have access much faster to information. But we need to be really good at taking that, challenging it, thinking through the pros and cons, applying judgement, and then look, what's business about at the end of the day? It's about relationships, right? And humans are going to be able to operate at a much kind of more higher added value level, but they still need to be kind of sceptical, curious, challenged, don't accept things on face value because if we do, we end up with groupthink, and groupthink is the worst possible thing.

Marco: I think you may well have just captured the essence of human-led, tech-powered actually, is that reasoning and that focus on does this make sense? Is that an outcome that we would have expected? If not, why not? And it's not going to be someone on their own, isn't it?

Steve: You have to work really hard to go and find talent from places you wouldn't normally get talent from. You know, I've said, I've said many times when I'm talking to our own recruiters internally, you know, it's great that we have better diversity from a gender perspective, from an ethnic perspective. But if we're hiring them all from the same place, from the same head-hunters, with the same background, they're going to have a lot of similarities. Even though they have a kind of visible diversity. We need to work harder, through various programmes that we're partnering on to try and go and access people that we wouldn't normally come across.

Marco: So that's important in the human element, isn’t it? That diversity, that kind of inclusion, let's say, as well, that means that you get the best out of your talent pool. Let's go back to the fusing of that with tech and perhaps the subject of trust in technology. So if you took technology all by itself to one side, and particularly artificial intelligence, if we go down that route for a moment, I don't think people trust it necessarily today. But is that because they don't understand or is there something else more sinister there?

Steve: You've got to embrace artificial intelligence, machine learning, automation. So rather than sometimes people will say, well, it's threatening, it'll take everyone's jobs, no, what it will do is elevate the work that humans do. And I think people are very swayed by what's happened in the consumer world where people have enjoyed free tools from all of the big tech companies in return for handing over their data in the business world, that is not going to fly. So in the business world we're very clear. My big guiding principle is: what is the benefit of what we are about to do for the customer? Is it for the customer's benefit or is it for our benefit? If it's for our benefit, why? Why are we doing something if it’s only for our benefit, not for the customer's benefit. But what the customer needs to gradually gain trust in, is that artificial intelligence and machine learning can give you enormous insights. But these insights are for your benefit. In an anonymised state, there are enormous benefits that we can give back to you as a customer. But this trust needs to be built up over time. But then the same is true internally. Colleagues need to trust the values, need to mean something. The purpose needs to mean something. You could spend a fortune to try and create the greatest kind of technology backbone for your organisation flowing through into your customers. But if you don't then combine that with the people element, you won't create great outcomes because you need both, right? But if you're not really serious about it and you just pay lip service to it, you get found out in a digital world, the speed at which you are kind of exposed for not being authentic is very fast.

Marco: Now, authenticity, let's take that on a little bit. As a leader, you're often described as a very authentic chief executive, Steve. And it's often said that today, what that really means is leaders who can combine strength of conviction with a bit of empathy, with a bit of humility. And humility is often best articulated by leaders in the willingness to admit the odd mistake or two. Would you recognise that?

Steve: You have to admit when something hasn't worked out. So sometimes I do use the word mistake, but a lot of the time I try and I get people to approach something: well, that didn't turn out how we expected, right, so what did we learn? High performance comes from taking risk, pushing boundaries and seeing if something works.

Marco: So we kind of built a bit of a triangle in this conversation, haven’t we? Of talent, technology, but trust as well. And if trust isn't built in that triangle, you know, that for me then is fundamentally why humans and tech have to come together because the trust will just be a gap, won't it?

Steve: Yeah, I think what we're seeing with digitisation is it's only going quicker. And I think sometimes when you look at these things, it's the rate of adoption that is the barriers. And I think part of that as well is being prepared to try things when they're not perfect. I mean, I've done many sort of big projects which get a bit bogged down because we're not prepared to trial an outcome, you know, be prepared to try things and then, you know, things will go faster.

Marco: And do you reckon ChatGPT will tell you how to do your job?

Steve: Well, I think ChatGPT is going to be or is already being revolutionary. It's going to be amazing in terms of democratising and commoditising information. But I believe that humans always have the edge in terms of emotional connections and also judgement.

Marco: Would be interesting to see what it said there if you went away and said, “what should I do as chief executive of Sage Group PLC?”.

Steve: Exactly.

Marco: I suppose you wouldn't just act on it.