In the middle of the skills debate, skills summit and some undeniable skills shortages in Australia, it is critical to not just think this is a numbers game, such as how many software engineers we additionally need, or how many mining engineers.
Just as important as the quantity game on skilled employees, is the quality and effectiveness aspect, whereby our organisations use their skilled employees to maximal effect and impact.
Our major companies such as telcos, banks, retailers and resources companies have a quite chequered record of technology development: many technology-intensive initiatives go belly up after hundreds of millions of dollars are spent, and indeed, most go well over budget and time even when they get to eventual completion.
It is arguable that public sector technology projects are even worse, such as the Myki (transport card) debacle in Victoria. The solution is to work just as hard on technology management as on the core technology.
Technology management involves firstly choosing the right strategy, such that there is an acutely strong fit between the technology investments and the overall business strategy.
The technology strategy can inform the business strategy of what is possible and feasible, but mostly, it is the business model and strategy that should influence the choice of technical investments and then the skills that are required.
It’s a ‘chicken and egg’ question about whether the business strategy or the technological possibility frontier should come first, with the most important consideration being of fit and alignment between these.
This business-technology fit was key to the success of international companies such as Rolls Royce (jet engines), Netflix, DBS bank, Samsung and Bank of America, which all used new technology capabilities, particularly AI and cloud to transform their business models.
We have documented these as case studies in our new book (Samson, Ellis, Black, 2022), as well as examining Australian organisations such as SEEK, Kogan, Service NSW, and a host of others, that succeeded in using those technologies to good effect.
These companies did not succeed just because they had sufficient quantity and quality of technologists. They succeeded because of their proactive leadership, strategic decision processes that directed their technology engine and allowed them to effectively manage risk, balance exploration/innovation with exploitation, and ensure customer centricity in their business model transformations.
Even on the ‘shop-floor’ skills side, whether is a factory, mine, or a technology shop-floor in a bank, research has shown that organisational culture and soft skills are fundamental to getting the purely technical aspects, such as quality of code, to be effective in delivering value.
My research in Toyota determined that their famous ‘Respect for People’ principle was core to their being able to maintain their quality, productivity, and continuous improvement right until the last day of their plant closure process in Melbourne.
The soft skills and the technology management provided the necessary context through which both the engineering and the production work could be best translated into effective cost, quality, delivery and innovation.
Australia’s skills debate should include the skills of our business and technology leaders, in knowing and being capable of formulating and implementing business strategies and transformations that are maximally technology enabled.
On this factor we are improving from the low base that was determined as such in the 1990s by the Karpin Task Force, yet we are on dangerous ground if we think that it is purely a game of numbers of coders, engineers etc only.
A good illustration of this in the difference between highly innovative companies and lowly innovative companies: having a culture of ‘employees bringing forward their best ideas’ is a critical differentiator here, which is inherent in some Australian business’ cultures, but certainly not present in many others.
My colleague Don Argus, who led both NAB and BHP during their respective decades of great success, refers to this as using every employee’s intellectual capacity, which requires a culture where such inputs can flourish.
Technology management is the key to unlocking value creation from technologists, both in the element of creating strategic direction and focus, and on the ‘soft’ elements of stimulating a workforce to be individually and collectively the best it can be, both in directly technical terms and in their broader contribution to value creation.
Professor Danny Samson is Professor of Operations Management at the University of Melbourne. Originally an engineer, Professor Samson has published more than a hundred research studies and articles on operations, supply chain and innovation management and strategic decision-making. His most recent books are “Innovation and Entrepreneurship: Value creation, Strategic Leadership” (co-authored with industry leader Don Argus), and “Business Model Transformation: the AI and Cloud Technology Revolution” (forthcoming with A Ellis and S Black).
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