A fundamental reappraisal of operating models is underway. CEOs and senior executives are having to look at their customers and employees and think about digitisation, supply chains, skills and reskilling, all while moving faster and retaining a strong sense of purpose. 
COVID-19 has sped up the need for organisations to invest in technology and adapt to what customers and employees want. John Fallon, Group CEO of academic publisher Pearson, discussed some of these pressures at Criticaleye’s Virtual CEO Retreat 2020, held in partnership with Accenture Strategy and E.ON UK.  
“Millions of people left out of work puts even more pressure on a big trend that we were seeing around the future of work and how that is going to require people to reskill and retrain throughout their working lives,” he said.  
John is no stranger to organisational redesign. Since taking the hotseat in 2013, he has repositioned the global business as a provider of digital products and learning tools, which included selling the Financial Times newspaper, business title Mergermarket and Pearson’s stake in The Economist magazine.  
He continued: “What looks to be a permanent shift is the growth of online learning – online degrees, virtual schools, and hybrid models with a mix of blended and face-to-face learning. We’ve set up UK Learns, a marketplace where people can develop their own personalised, learning pathway and find reskilling and retraining opportunities. We would expect some of the face-to-face learnings to change so more of it is done online.” 
Mark Spelman, Advisor to the World Economic Forum and a Board Mentor at Criticaleye, noted how technology continues to transform business models. “The underlying characteristics of technology in the coming decade will be that everything gets connected, in real-time, with embedded intelligence through a combination of technologies such as AI, Cloud and 5G. 
“The management implications are about getting ready to adapt to real-time data, using algorithms which are free of bias, and enabling more machine-learning to complement human decision making,” he said. 
The trend towards localisation is also going to have a major impact on how businesses operate, as can be seen by questions about how products are sourced and delivered. “Risk mapping is the critical issue in supply chains,” Mark explained. “You have to look beyond parts shortages, transport disruption and specific weaknesses of suppliers to an understanding of the risk concentration across suppliers, geographies and locations and bring all the elements together. 
“Technology will be a key asset in modelling and assessing event-based risks and key vulnerabilities in supply chains,” he said.  
Mary Jo Jacobi, Non-executive Director at Weir Group and another Board Mentor at Criticaleye, built on this point. “There will be large-scale rethinking about how we have done things for the past decade or more to how we will need to do things in the next ten to 15 years. We will have to move away – or find a middle ground – from just-in-time manufacturing, where you don’t have a load of stock or inventory on hand because it’s expensive to carry, so let’s make it when we need it. 
“However, that’s not really going to work when your supply chain is disrupted, and to get around that will require AI and digital – 3D printing will help here.” 
Tom Beedham, Director for Board Mentors & NEDs at Criticaleye, commented: “Demand around AI, data-science and cloud technologies were rising pre-COVID, and now these and other digital solutions are even more sought after, because of the move to life online. 
“Organisations must be thinking hard about investing in technology in order to be among the winners after this pandemic. However, they must also understand it will be critical in some ways to over-invest in human capital because it’s only with that that they can maximise the benefits of the technology to deliver the ROIs they’ll need going forward.” 
The key for executive and non-executive directors is to stay open to bold ideas and fresh thinking. It’s not a case of forgetting everything that has made a business successful in the past, but rather an acceptance that new models and approaches will be needed as the world has transformed.  
Mary Jo summed the situation up neatly when she said: “The landscape is going to change radically in ways we haven’t even thought about yet. Virtual may be the new reality. Companies and CEOs really need to think about what is important to their business and its long-term survival.  
“They’ll find it’s not just about money; it’s embracing the traditional factors of production, and especially the human element, as well as the technological element – that will make the company great.”

David Hobbs, Senior Editor, Criticaleye

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