In this exclusive interview with Marcus Pang, we explore the transformative power of technology, the intricacies of digital evolution in the Asia-Pacific region, and the critical role of mindset and leadership in driving successful digital initiatives.
As the VP Executive of Technology Services at Gartner, Marcus’s vast experience is illuminated by his detailed observations on the divergence between digital optimisation and true transformation, the challenge of aligning digital initiatives to ROI, and the paramount importance of human capital in technological evolution.
Marcus will deliver the opening keynote on Fighting the Transformation Fatigue at Tech Week Singapore on 11 October at Marina Bay Sands, Singapore.
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What are some pivotal moments in your tech and consulting journey?
I started with system planning for the Ministry of Defence, which allowed me to play with latest information technology (IT) and operational technology (OT) way before many people. With the experience of implementing advanced technology projects, I joined a large IT consulting firm shortly after I left the public sector.
Throughout my career, I went from system implementation, process reengineering, organisational design, and talent management to transformation.
My career path continued as I moved between consulting firms and end-user companies holding different roles from strategy to operation until I became a Managing Partner in 2010.
Overall, I’ve had more than 20 years of consulting experience with automotive, oil and gas services, logistics services, and the public sector.
How does digital transformation differ in Asia compared to other regions?
Digital transformation includes both optimisation, which focuses on doing things better, faster, and cheaper within existing models; and transformation, focusing on new digitally enabled products, revenue streams or business models.
For the more regulated environment or industry, we commonly see more optimisation effort. For the more open market with large market sizes, transformation initiatives are more common.
The drive for change is mostly triggered by external forces or threats. In a more protected or regulated environment, the reluctance to change or transform is more obvious.
The other perspective is transformation led by China, led mainly by large tech companies with well-integrated ecosystems. Meanwhile, other regions are seen to have multiple apps addressing different needs with some of them sharing data at the backend (i.e. government).
Overall, we do see digital adoption in Asia happening a lot faster when compared to the West, which is largely due to less regulations, basic existing setups, and high adoption of mobile devices.
As Transformation Advisor to government agencies, what key challenges do they face and how have you addressed them?
We see two very common challenges in the industry. The first is “mindset”. For many years, our success is based on best practice, and a well-planned and proven return on investment (i.e. a known outcome).
The hardest part, in the digital age, is to ignite that fire to have the courage to try with a less-than-perfect experiment setup. Organisations should explore, learn, and move on. The word “responsible corporate citizen” is commonly used to not try anything. Usually, for the more risk averse clients, the way out is to develop some kind of fail-safe mechanism like a car’s handbrake. This is to ensure that impact will be minimised when things go out of hand during trial and error.
The second challenge is “myths” where digital transformation is thought of primarily in terms of technology. In fact, it is primarily about reimagining business – or government. It requires strong leadership and a people-centric approach considering customers, citizens, and employees.
Helping shape leadership mindsets and practices at Board and Exco level is the key to unlocking digital acceleration that is sustainable. This includes flipping old assumptions, moving from incremental change to disruptive shifts, and from risk aversion to embracing thoughtful risk to accelerate learning.
Technology definitely plays an important role but cannot drive transformation in isolation.
What are the challenges and benefits in tying digital strategies to ROI?
Digital initiatives have different expected outcomes. For those focusing on optimisation, it is easier to define ROI, as they are operating in the same business model that we are in today.
For the transformative type of effort, it is important to define the correct ROI. As these initiatives are operating in a new business model, we cannot use today’s KPI to measure success.
Jack Ma, the Co-Founder of Alibaba, used to say his eCommerce platform model is ‘The pigs (i.e. third parties) will pay’, not the buyers nor sellers. So the profit margin is not simply revenue minus cost.
Gartner use the fear, fact, faith framework to link motivation of investment. Fear investments are done to avoid something bad happening like the requirement to comply with new regulations, or to catch up with competitors’ new products.
Fact investments are traditional business cases and typically centre around financial ROI.
Faith-based investment are things we believe are important but cannot yet prove. This requires experimentation (i.e. test and learn) to prove or disprove the hypothesis. The ‘return’ is learning and/or creating options for next steps. Faith investment is very much aligned to digital initiatives.
How can companies recognise and manage transformation fatigue?
Dropouts, absenteeism, ‘tick the box’ exercises, and things not moving are the typical signs of fatigue. While everyone still supports the initiative, they began to doubt where the end of the tunnel is.
There are three magical ingredients to help manage transformation fatigue: Define the Endgame, Great Principles, and Culture Hack, coupled with the ability of people to absorb change.
In digital transformation, what tends to be the bigger obstacle: technology or people?
A transformation is a change from status quo. It requires the right organization, governance, people, process and technology to make it work. The alignment of endgame, objectives, motivations, and the collaborative culture underpin the foundation of success.
Bottom line, it comes back to having competent people with the right mindset.
Our research shows that the non-tech aspects of transformation (e.g. culture, mindset, leadership, business model, ways of working, governance, etc.) have a fifteenfold impact on success relative to the technology aspects.
As mentioned, too many still make the mistake of focusing more on technology. This is the key reason most transformation program failed outright or struggled to deliver on expectations.
What traits do you emphasise for startups and SMEs aiming for digital dexterity?
There are five elements of digital dexterity as mentioned in Gartner research: Business Acumen, System Thinking, Political Savvy, Adaptable, Fusion Collaboration.
Fundamentally, digital dexterity is about the ability of people to think and behave ‘digitally’, and be open to new ways of working, including new ways to leverage technology in achieving business outcomes.
How pivotal is human capital in tech transformation and what skills should be prioritised?
Technology does not transform organisations, people do!
Talent is always the centre of new initiatives. Unlike routine operation where you can solidify it with systems and processes, new initiatives require competent people to explore, experiment and make judgement calls with insufficient data.
Given that future of work will be faster, smarter, and well-informed, companies should look into how it can reshape work environments and cultures to attract the right talent.
What crucial insights will you share at Tech Week Singapore, and why should leaders attend?
Gartner predicts that 80% of humans will engage with smart technologies on a daily basis by 2030. The single greatest factor that will drive organisational success will be the ability to pair technology advances with talent strategies.
Every significant business initiative will have a digital underpinning, only the digital dexterous thrive. The future will be shaped by people knowing how to learn and apply new technologies to be more productive and more effective.
As technology allows automation of routine tasks, we also need to tap into the unique aspects of humans in areas of creativity, empathy, collaboration and ethics. It is an exciting future for those willing to learn and adopt new technology to enabled and inspire possibilities.