“China is more digitalised than many people think.
According to McKinsey Global Institute (August 2017),
it is now the world’s largest e-commerce market (40 per
cent of value of worldwide transactions – up from one
per cent 10 years ago).
One third of the 262 “unicorns” (startups worth
more than $1 billion) are Chinese, commanding
43 per cent of global value of these companies.
China is now in the top three nations for data
analytics, AI, robotics and automation, autonomous
vehicles and virtual reality. With more than 750
million internet users (greater than the US and
Europe combined), China’s influence and growth will
directly a effect the future of Australian businesses.
Directors are now more aware of the impact
of technology and there is more “airplay” of the
disruption of traditional businesses and industries
(like Amazon or Elon Musk’s battery challenge).
That said, there remains a dangerous sense of
complacency in some boardrooms with prevailing
attitudes like “we’ll be all right in the end”, “we’ll
muddle through”, “let’s see what others do” or, worse,
“it’ll be somebody else’s problem”.
People defend the status quo or simply bury their
heads in the sand — not a great strategy — but the worst
outcome is for the board to conduct another feasibility
or situational assessment report.
The anecdotal view is that the current level of
commitment to the digital agenda is low. Most boards
still do not have this as a priority. They tend to have
a discussion on innovation as an “event”. Typically, board
agendas still only cover the standard agenda items — finance, legal, marketing/sales, HR, occupational health
and safety. In order for businesses to move the dial,
boards in Australia need to have innovation/technology/
disruption as a standard agenda item for discussion at every board meeting. They need to know whether
their business is in a highly volatile industry.
They need to ask what timeline they have?
How resilient is their business? We need to
establish the empirical evidence to back this up.
Leadership by the chair is critical. Where
the chair or an in
influential or senior director
is digitally active, the board mindset changes
to recognise the challenges and adopt
countermeasures. We should not be fearful
— instead, we should start to think about the
immediate steps we can take to adapt. We need to
loosen up our thinking to address these issues.”