How CEOs can meet the digital challenge

Noshir Kaka, global coleader in McKinsey’s Analytics Practice, discusses how technological advancements are key to the future of Asia, how companies must recognize certain kinds of decisions are better off being automated, and how Asian companies are leapfrogging like never before.

What are the top three most disruptive, powerful forces shaping Asia 10 years from now?

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I think one of the biggest trends for the future of Asia, and frankly for the future of the world, is actually the impact of technology; and it’s not one single area of technology, it’s actually a confluence we are seeing, of three or four fundamental shifts. Obviously AI is at the forefront of that but equally you would not have AI without the data and the sensor capability that we are seeing included within the entire ability to reimagine journeys, as well as thinking about entirely automated digital workflows. When you put all of these together we are seeing companies actually leapfrog, both in technology, capability market access and price points at a level we have never seen before.

How should CEOs be responding to these forces as they think about their business strategies for the next decade?

I think as you think about future proofing, there are two to three elements to this. The first one is talent. You cannot future proof on the basis of “what”, you future proof on the basis of “who”, because that’s actually the microcosm of, the fundamental engine, through which you actually accelerate your digital or your technology ventures. So this means thinking through very carefully about how you recruit the next generation of talent, thinking how you train apprentices and create academy-like structures, and finally you actually accelerate those folks through your organization.

The second element of this is actually speed and time, there’s no question of what we could do, or what we had the luxury of doing over months and years even a few quarters ago, actually now has been done in weeks and months. So as you look at the element of speed: speed to market, speed to a product, speed to a response to a customer. Those become incredibly important elements to measure yourself in. For example, how long did it take you to make a particular decision, and how long do you take today?

And the final thing is, I look at now and ask the question: what are you doing today or what decisions are you making, that you should not be making? What are those decisions that in fact are much better taken by data, machines, and AI? For example, many of my clients today have forecasting as a core element of management professionals doing their job, so you forecast a monthly plan or a sales plan or a production plan or a S&OP supply chain plan. Today we can conclusively say that if you are actually forecasting monthly plans you are committing management malpractice because algorithms and data can actually do it a lot better than humans can.

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