Monthly Archives: Jan 2022

OneEcosystem organizations must blow-up the archaic leadership mindset to stay relevant

January 18, 2022 | Phil FershtSaurabh Gupta

The needs of enterprises are not rocket science these days – they are based on what they need right now, and the direction of travel for everyone is pretty much the same across the OneEcosystem:

  1. Get your sh*t into the cloud as fast as you can so you can operate and compete
  2. Make sure you know exactly what your customers what and have the tools and know-how to engage with them and impact them
  3. Make sure you have a handle on your security challenges
  4. Make sure you have collaborative partners who can support you (and you them)
  5. Make sure your key people aren’t going to leave
  6. Have a handle on the data you need to be effective, and organize your business functions to get rid of the silos
  7. Create a leadership function to pull this all together for you

We would argue that you’ll mess up 1 through 6 if you haven’t figured out 7. 

These are the roles – and leadership traits – that will make companies much more in tune with their strategic needs and align them to their business operations:

 

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The Chief Executive Officer:  The CEO should be the leader who drives the infinite mindset across the organization. He/she must continuously define the purpose for the organization and relentlessly drive a fearless collaborative culture that values stakeholder value beyond shareholder value.  As a leader, it’s so easy to obsess with operational functions of the business during times of disruption or distress - in this case, a global pandemic – that it can create knee-jerk, often short-term decisions that could inherently damage your long-term vision, your business’ culture and your raison d'être.  With no defined time horizon, no clearly-defined rules, and with players that may enter and exit at any time, the primary objective of an infinite game is quite simply to keep playing. The goal for businesses is to have the will and resources to stay in the game, through thick and thin.

Having lived and worked through four recessions, I personally understand the rapid change in leadership mindset that can occur when a firm goes from peacetime and growth to one of survival and all-out war.  According to author Simon Sinek, people look to leadership to serve and protect, to “set up their organizations to succeed beyond their lifetimes.” But in the modern landscape, most organizations place an unbalanced focus on near-term results that may ultimately prove to be self-defeating, like casting aside your umbrella in a storm because you haven’t been getting wet. In short, business is no finite endeavor. This pandemic lays plain for all to see the game we are really playing. 

The CEO is the ultimate collaborator, forcing the change that is needed and balancing the desires of the various stakeholders (the board, key clients, key partners, the employees).  His/her team to make this happen must be responsible for the full gamut of their customers, employees, and partners, working with a transformational wizard to bring together the process and technology with the real innovation ingredient:  the people. 

Chief Transformation Officer:  This leader must link front to back office and ensure processes run smoothly across functions to deliver the data/outcomes the organization needs.  This should ideally be someone who understands the challenges of enterprise operations, and how to align them with the market facing/client impact areas of the firm.  Forget the old GBS head / shared services head role, as this just has repeatedly failed to get out of the transactional back-office world and the “finance factory”. This person must oversee both technology and operations, understand the value of automation and AI, be able to design and implement change programs and work closely with the employee experience leader to eliminate the back office mindset from antiquated business functions into one that is aligned with the direction of the business.

Chief Customer Experience Officer:  This is the leader who lives and breathes the world of the customers and obsesses with how to engage them as effectively as possible – right across the entire customer life-cycle.  This ideally is someone who understands how to design customer interfaces, how to service customer needs leveraging both digital tools and physical support and ensuring the entire employee base is unified around (and incentivized on) driving customer impact.  In addition, the CCXO must ensure the marketing mindset is to communicate with the customer, educate the customer, and to develop specific programs that have a real impact on driving customer engagement and business growth.

Chief Employee Experience Officer:  Forget transactional HR, the employee experience leader is the person responsible for making the company a great, energizing place to work, where staff of all backgrounds, ages, experience levels cultures are energized by the values and desired outcomes of the firm.  This individual must be the person who can manage the expectations of the board, the CEO, the shareholders to create a company culture and values that everyone believes in.  Moreover, the CEXO must be intimately involved in the creation and execution of training programs across the firm to attract talent who want to work for a company that will develop them, as well as establishing a culture and values they can identify with.  This should ideally be a strong leader with broad experience of the business and staff development, who knows what it takes to be successful, and who understands how to motivate people beyond pure compensation.  The best leaders today are also great people managers – and the CEXO role must be at the core of the business leadership, not some ancillary executive painting lip service and not having any real impact.

Chief Partner Experience Officer:  As the OneEcosystem environment evolves, the need to collaborate with entities with common objectives, across the entire customer value chain, has never been so prominent.  Partners are no longer just your suppliers. Suppliers are essential partners to deliver your goods/services. Still, the OneEcosystem looks at partners more holistically – partners in the ecosystem involved in providing the customer experience across the entire customer lifecycle.

As such, we believe these five partner ecosystems will evolve:

  1. Supply chain partners, such as suppliers, distributors, or financers;
  2. Industry partners, such as multiple banks collaborating to improve trading, or mobile phone brands collaborating to share components, logistics and manufacturing processes to improve time-to-market;
  3. Cross-industry partners across industries with regulators. For example, regulatory approval in the airline industry between the airline, original equipment manufacturer [OEM], and authorities. Or stakeholders across the healthcare / pharma / retail / regulatory ecosystems to improve the efficacy of vaccines in the Pandemic.
  4. Technology and business services partners. These must fall under the CPXO to plug critical skills and technology gaps that are increasingly needed (with immediacy) in today’s talent-constrained environment.  This is where we envisage a huge cross-over with the transformation leader’s role, where services partners are increasingly critical to driving change at speed.  The CPXO must ensure his/her services partners truly understand (and are embedded) in their core business and understand what their clients – and other key partners – need to collaborate effectively. 
  5. Hyperscaler partners. The increasing influence of Microsoft, Amazon, Google – and others – is becoming significant across all partner ecosystems.  For example, if you are in the consumer goods or retail businesses, you cannot survive without strong engagement with the Amazon channel.  The same is happening where all these hyperscalers control your scalability with the cloud, your security, your data and so on.  They have become huge influencers and enablers of the virtual business, and there is nowhere to hide from them.

The Bottom-line:  The old way of running businesses is fast eroding as we rethink what constitutes success and ambition

Did you ever think your enterprise could move to a 100% work-from-home environment with less than three weeks’ notice? This crisis era of constant change has forced businesses to flex – vastly accelerating the OneEcosystem environment, dramatically cutting redundancies and improving processes at scale. There is a massive amount of change happening, and out of change comes real transformation. After years and years of complacency due to the relentless growth (and papering over the cracks of 2008), all of today’s organizations now finally have a burning platform to change how they operate globally.  In fact, the platform is positively on fire!

Posted in: Digital TransformationDigital OneOffice

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You must adapt for the future of work, folks

January 14, 2022 | Phil Fersht

Posted in: Absolutely Meaningless ComedyGlobal Workforce and Talent

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Accenture, Infosys, TCS, Wipro, and LTI electrify the HFS Energy Top 10

January 10, 2022 | Josh MatthewsPhil Fersht

The energy industry is experiencing multiple competing fundamental transitions and market forces that threaten to cannibalize many energy providers out of existence:

The political mandates (or attempted mandates) to move more aggressively from fossil fuels to renewable energy, to have broader sustainability across value chains; 

The adoption of digital capabilities to connect organizations and pubic sector bodies across energy ecosystems to stay relevant;

The economic double-shock effects of the pandemic and the oil price crash forcing a dual CAPEX/OPEX crisis;

M&A and divestment activity, questions over what to do with existing assets, and a continuing need to drive efficiencies throughout operations.

Technology service providers catering to the requirements of the energy industry need to balance multiple competing and interlinked priorities. One, they must have a pulse on the industry shifts. Two, they must strategically align their roadmaps to align to these shifts and solve the business challenges that stem from the global context. Three, they should focus on solutions, services, and innovations throughout the value chain—working with the wider partnership ecosystems of providers.

To this end, it's been exciting for us to publish the 2021 HFS Energy Top 10 to provide a comprehensive assessment of the energy industry and its leading business and technology service providers across execution, innovation, and client feedback.

I sat down with Josh Matthews, our Practice Leader for sustainability and energy strategies - and recently returned from COP26 - to learn about the experiences and insights he gained working on the new research.

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To download a copy of the report, please click here.

Phil Fersht, CEO and Chief Analyst, HFS Research: The 2021 HFS Energy Top 10 provides a comprehensive look at the energy industry services value chain. What changes or shifts did the pandemic put in motion?

Josh Matthews, Practice Leader, HFS Research: Demand is increasing across the energy industry value chain, as are the headcounts, revenues, and sustainability services capabilities of the providers in this report.

The fastest growth in demand is for upstream (exploration and production), refining, and retail and marketing services. There is standout growth for upstream asset and data management, refining emissions management, refining process control tech, and market repositioning strategy from oil and gas to energy. This mirrors the overwhelming dominance of the energy transition throughout this study; however, the competing industry demands are borne out in an increase in demand across the value chain for technology and business process services.

Phil: What were your biggest learnings from this research, Josh?

Josh: Both energy firms and their service providers need to balance the energy transition and the multiple, competing, interlinked transitions. They must meticulously align their roadmaps to outcomes, solving business challenges that stem from the global context. Underpinning these outcomes must be focused services and technology throughout the value chain—working with providers’ partnership ecosystems.

Some providers have inherent advantages by being part of enormous conglomerates with deep history and operating expertise in the energy (and utilities) industry; however, independent providers are countering this with their own vast ecosystems. Access to capability is less of a barrier; rather, it’s how clearly you position your unique capability in a market that at times can sound very monotone.

Phil: So, Josh, which service providers are at the top of the list, and why are they there?

Josh: Accenture, Infosys, TCS, Wipro, and LTI top the overall list. The ability to execute and capability with emerging technologies are now just licenses to play. These providers have a vision for balancing all the competing industry demands I highlighted, with sustainability services in particular, and they have standout ambition and scale. A few other notable mentions are Atos and HCL’s innovation initiatives and client engagement, Hitachi Vantara’s ecosystem and voice of the customer, and Capgemini’s growth and alignment with the HFS OneOffice™ vision.

  • #1 Accenture is unmatched in terms of the resources it has for execution and innovation. It backs up its resources with an exceptional voice of the customer and OneOffice alignment—overcoming some of its past challenges to be a frontrunner across all categories. It is leading in the sustainability services ecosystem, which, combined with a meticulous industry focus, means Accenture is well-placed to set the pace as the energy industry transitions away from oil and gas.
  • #2 Infosys’ customers blew us away (frequently). Its historical brand image of delivery is complemented by consulting, innovation, and sustainability capability, as proven in its case studies and reference clients. Every corner of the market may not know it yet—but Infosys will be one of the frontrunners in the sustainability services charge over the coming years, both in the energy industry where it has a deep history and further afield.
  • #3 TCS plays with the best in terms of scale, innovation, and R&D investments. Its combination of engineering and proprietary solutions with a vast range of emerging technologies fits well with impressive internal talent initiatives and all-around industry expertise. Like many “delivery powerhouse” providers, TCS is proving that it has integrated consulting and sustainability capability across the company.
  • #4 Wipro’s narrative and clarity of focus give new life to its strengths in IT services and industry-specific capability—in some part built on a new operating model that gives it fresh alignment across the company and with the HFS OneOffice vision. Sustainability outcomes are embedded in many of its engagements, and Wipro knows exactly what its role is in the energy transition, but at the same time, it has a broad range of capabilities across the whole value chain.
  • #5 LTI talks in a level of depth about the energy industry like no other provider (I’ve worked there myself—LTI will have no trouble engaging with management or plant operators). LTI simultaneously has an impressive partnership portfolio and a clear view of how its parent company, L&T, has expertise LTI can leverage. A focus in part on carbon capture and storage solutions puts LTI apart from most participants in this study.

Phil: Josh, was there anything that surprised you in this study?

Josh: The extent to which sustainability is becoming embedded in energy industry engagements across the value chain—but to say there’s more to do is an understatement, Phil!

There are still frightening amounts of money being thrown into coal, oil, and gas; there needs to be urgency in everything that touches climate change, and the transition can’t happen without energy firms on board. Trust needs to be re-established by the material action of oil and gas firms. They need to be clear on the good and the bad if they’ll ever re-earn the trust of the public and politicians.

Bad actions don’t cancel out the good of renewables investments, but there’s work to do when those investments are still a small fraction of fossil fuel investments. There are global disparities in attitudes to the energy transition, and regardless of what happens at COP26 this November or whether the general optimism about the Biden administration proves valid, there will be a disparity for some time.

Phil: Are there any interesting trends you spotted in your conversations with customers?

Josh: Global differences in oil and gas firms’ narratives to the energy transition (investments aren’t always exactly matched) present a fundamental split. 

One group presents a narrative that fossil fuels’ time is more limited (with regulation and customer perceptions shifting), and those firms are transitioning more quickly toward renewable energy. The second group pitches an acceptance of the role of fossil fuels in the global economy for decades to come and is transitioning more heavily to natural gas, banking on carbon capture, storage, and utilization (CCSU) with some level of renewables investments now and planned in the future.

But I suppose, at the very least, to have every firm talking about the transition as if it’s a given is a small step compared to where we have been very recently. But also, I’m nowhere near giving any of these energy firms a gold star.

Phil: How do you think the energy market will evolve over the next 12 to 18 months?

Josh: The pressure on energy firms to disclose their transition plans away from fossil fuels will only increase—as will scrutiny of their actions that do not align with what we all know needs to happen. It remains to be seen how much COP26 will drive this. I did leave Glasgow with both optimism and the bitter aftertaste that we’re already way too late in transitioning and dealing with climate change for so many.

Phil: How did the recent gas crisis in the UK occur, Josh, and can we expect similar crises to impact global markets in the coming months as we deal with this fractured business environment?

Josh: A classic case of it being a number of factors, Phil: Demand for energy is booming as economies restart “post”-pandemic; less-than-ideal weather conditions for renewable energies like low winds and droughts (hampering wind and hydropower) is highlighting the lack of sufficient investment in renewable energy (especially to meet net-zero targets); low levels of European gas storage and supply crunch from Russia add to the problem. Wholesale prices have skyrocketed - at times roughly doubling - which has seen many firms (mainly smaller firms) go out of business in the UK due in part to a government price cap meaning they cannot account by raising the cost to the end consumer - despite that price cap rising. This is not going away anytime soon and is affecting every industry. Put this alongside supply chain chaos (and prices, for example, the cost of shipping container space) that doesn't have an end in sight (although some out there with a microscope apparently see signs of improvement), and high (relatively to times over the past few years) oil prices at around $80 for a barrel of Brent. Governments and firms across sectors need to secure themselves against such shocks, diversify supply chains and build stores, and ensure their roadmaps layout the journey from here to net-zero and beyond. One sentence makes it seem rather simplistic, doesn't it... 

Phil: What are you looking forward to in terms of developments in the energy industry for 2022?

Josh: I really hope to maintain my optimism that the industry can change and be a part of the global effort against climate change. The more current behavior persists, the harder that will be—even with the investments currently going into the transition.

Part of my optimism lies with the service providers in this Top 10 report. I look forward to working with them in both energy and sustainability contexts to help them help their energy clients make some desperately needed strides forward.

 Phil:  Well let's pray your optimism for the sector stays true during these unpredictable and uncertain times, Josh!  Thanks for your time

HFS  premium subscribers can click here to download our new Top 10 Report: The 2021 HFS Energy Top 10 

Posted in: Digital TransformationEnergy

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One must-have New Year's Resolution...

January 03, 2022 | Phil Fersht

Posted in: Absolutely Meaningless Comedy

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