It's terrifying because there's a wall of money there and a legion of smart, focussed and driven people who, intentionally or not, want a piece of our business. It's exciting because you can see what a little vision, drive and energy can achieve, even without the resources a company like ours has.
"While being digital is essential for a successful business on its own it's simply not enough."
Shayne Elliott, Chief Financial Officer at ANZ
I've recently been to the Valley with other members of ANZ's Management board and I came away with three key themes I think will shape the business world as the digital revolution continues.
There's no doubt digital has arrived in financial services and “mobile first" is the catch cry of the modern era. But while being digital is essential for a successful business, on its own it's simply not enough.
It's easy to forget about the first internet innovators, world-leading dot-com companies which were uniquely great at what they did. But so many of them failed and of the ones which stuck around few remain leaders in their sector.
How did this happen in the cradle of innovation and change? These were early adopters of digital but it hasn't been enough to keep them there (or even in existence in some cases).
Why is this? How were competitors able to eat away at them? It seems to me it's because these competitors were quicker to spot new trends and seize new opportunities.
At ANZ, building a digital bank isn't the real challenge we face. Building agile people and a supporting culture which can recognise new trends and adapt to the ever changing needs of our customers is.
To succeed in the digital era companies need to focus less on new technologies and more on the importance of leadership and culture.
Facebook CIO Tim Campos spoke to us at length on our trip in an extremely engaging way about people and culture. He never once mentioned hardcore technology, data-centres, the cloud, mobile or big data. He talked about people and culture.
What I learnt from the big (Facebook) to the small (start-ups like DemystData or Coinbase) companies we met with was every successful group has a supportive and appropriate culture; a culture that encourages staff to be inquisitive, question the status quo, welcomes creativity and embraces diversity of thought and opinion. One that thinks about the customer all day long.
To truly transform a business, companies need to create the leadership, vision and culture to attract, retain and continually inspire the very best, most insightful people.
Culture is just the first step. Success in the digital era also requires an intense focus on what a company does and what makes it uniquely great.
All of the successful companies we met in Silicon Valley encapsulated this through a sense of higher purpose, which in some cases was almost evangelical.
Every Googler who gave us a presentation began by quoting their purpose (“To organise the world's information and make it universally accessible and useful"). The same thing happened at Facebook (“Connecting the planet").
Photo credit: Asif Islam / Shutterstock.com
This sense of purpose is something best captured by a company we didn't meet, Apple, where the higher purpose created by the mercurial Steve Job's was to “put a dent in the universe".
There's obviously a lot more detail behind each purpose but they're the tools these companies use to drive everything they do. They're a lot more than inspiring straplines or catchy internal-marketing slogans.
Companies hoping to be truly digital need to ask: what is our purpose? Does it help simplify the business and help staff focus their efforts around the company's unique strengths? Does it help deliver products and experiences our customers want?
In this era of digital disruption, higher customer expectations are spreading across industries at a rapid speed. Consumers are spoilt with convenience, speed and unbelievably compelling offerings which are setting expectations ever higher.
History tells us service expectations never fall and they migrate quickly from industry to industry. As Bill Gates once said, “we tend to over-estimate the speed of change but under-estimate its impact".
In financial services, customers are unlikely to shift to buying mortgages on their mobile devices tomorrow but when the change finally does come it's likely to be massive.
It was very noticeable all of the companies visited had a singular focus on improving user experience, almost at all costs. A deeply authentic drive to deliver something uniquely great for their customers exists and it's clear the old “build it and they will come" logic still prevails.
While these companies might seem focussed on building digital and mobile products that are easy to use and present information in an accessible and attractive way, what they're really focussed on is building products that meet customer needs and expectations.
Or, as Facebook explained to us, “being digital and mobile first offers lots of opportunities, but equally it presents new challenges, as these products actually take our people further away from the customers that use them. So, we've found investing heavily in customer empathy is critical."
It's something these successful companies clearly continue to focus on throughout the life of each of their products.
Look at how each of Apple's product lines have evolved and changed to meet customer needs and expectations. If you see an image of the evolution of the iPod or iPhone it's like looking at the evolution of man, as each version takes a step forward, continually improving the customer experience in terms of the products functionality and usability.
In the end, I found the journey to Silicon Valley to be – despite my initial thoughts – far more exciting than terrifying. For businesses the digital journey is not something to fear but something to tackle head on.
This can be achieved first by tackling company culture, purpose and a true understanding of customer expectations. Businesses successful in this will give themselves opportunities that we never dreamed possible just a few short years ago.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
09 Oct 2015
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28 Aug 2015