'We’ve no use for defeatism'
Source: Management Scope (November 2015); Interview: Guido D’hert- Text: Jady Petovic
According to Steve Muylle, professor at Vlerick Business School, we should not let ourselves be rushed by the advancing tide of digitalisation. 'Going one hundred percent digital is usually overkill.'
He sees himself in the first instance as a scientist. Steve Muylle, partner and professor at Vlerick Business School, specialises in digital strategy and industrial marketing. He does research, lectures at universities in Belgium and abroad and is an independent director for a select number of companies. He also regularly appears as an expert at in-company management training programmes. Muylle's research work has been published in prestigious scientific journals. 'My main aim is to give people scientific information about what’s happening in the field of digital and industrial marketing,' says Muylle during the interview at the Accenture offices in Brussels. 'I don't want to go into companies and shout from the rooftops: “This is what you have to do”. There are other people, in the guru category, who are very good at that and do a great job. But that's not my style, because I understand only too well that some companies don't want to move too fast.' According to Muylle there are still enough businesses with which you can make a good living, although twenty years ago people wrongly said they would go under. He advocates always asking critical questions: how do I make money now? How might this come under pressure? What can I do about it and how much time do I have? 'Jumping on the bandwagon because people say that social media and mobile are changing everything and that you should use them, is too easy. It's better to think carefully about whether they can really be of value for your business processes.' This doesn't take away from the fact that Muylle does believe that technology and digital are becoming increasingly important and that people underestimate this fact. Where technology was previously seen as a tool to improve efficiency, today it increasingly forms the basis for value creation through changing business processes. 'These are fascinating times if you look at what's happening in the area of electric vehicles, 3D printing and robotics, for example,' says Muylle. 'Developments that seemed far away suddenly grow exponentially and the trick is not to see these developments as a threat but as an opportunity.' Instead of managers worrying about what will be the new Uber in their industry, they should, according to Muylle, be lying awake thinking about how technology can be used to optimise and potentially transform business processes.
How can people become more digital-minded, how do you wake them up?
'Let me give you an example. Accent did a workshop on the theme of digital and entrepreneurship. Accent is a B2B company that operates in the recruitment field, so they look for talented employees and recruit them for customers. They looked at the dating app Tinder, thought it was fantastic and wanted to use the model to allow employers and employees to find each other. They then built a kind of Tinder app in a B2B context for job seekers. According to the CEO it was an immediate success, as in the first couple of weeks there were hundreds of matches. Then I showed them eHarmony. That’s the largest dating site in the United States. eHarmony works with an algorithm that allows the computer to generate the best match. So far it has resulted in 600,000 marriages and the divorce rate after seven years (the seven year itch) is around half of the traditional divorce rate in the United States. A new service has now been launched which does the exact same thing with job matching. People complete a list of questions and are then matched by an algorithm. This isn't like Tinder as you don't have to swipe photos, it's just the computer that says: these people will be successful at this company and these won't. We might think that the Tinder model is disruptive, but that’s not the case. It's nothing more than a user-friendly interface with geolocation and will not change the business model, as such, very much. But the eHarmony model could make your business redundant in one fell swoop. So I try to encourage a company like Accent to face the facts. Do you want to wait for eHarmony to come to the UK, followed by Germany, France, the Netherlands and Belgium? It will take some time, it’s true. Or do you bring something onto the market yourself, even though it's not cheap?'
So it's about strategy?
'It's very important to know what a business's strategic priorities are. On the basis of this strategy, the location, the marketing mix, value chain and the shop system, for example, I can make a proposal concerning a company's options. This proposal certainly doesn't say “Go one hundred percent digital”, because that’s often overkill. You have to find a pattern that is specific to the particular business. And then we discuss it. What’s the low-hanging fruit? What can we fix quickly and where do we need to make serious investments? And then you come to the ROI, which is very important. You have to invest in technology and infrastructure, and that costs money. How will you allocate it? Which applications will you use, and based on which infrastructure and middleware?'
In which companies do you find digital strategy today?
'The bulk of the economy is made up of established companies with processes, systems and staff that are already completely embedded and have proven themselves. Now all that digital technology is arriving and raising the question of what these companies should do with it. It happens with stops and starts. There are two speeds: the speed of the stock exchange, which creates bubbles that can then implode again, and the development that continues steadily beneath the surface. A small core dares to take the lead, but most watch from the sidelines and display herd behaviour. I try to offer companies certain conceptual frameworks and take processes as my starting point. There are trade processes such as search, authentication, valuation, payment, logistics and customer service. If all these processes ae carried out online you’re really talking about e-commerce and can actually throw the whole offline thing overboard. An example of this is the American company Dow Corning, one of the largest silicone producers in the world, which generates billions in revenue every year and operates largely online. Then you have the decision support processes that provide insight into customers, suppliers or partners, for example. And finally there are integration processes, including data and application integration.'
And what’s your approach?
'I give workshops for the management level, people who know the company through and through - business, ICT, marketing and sales, and sometimes the legal experts and people from R&D, too. We take them through the various processes and then they receive a checklist with nearly a thousand questions that they have to answer with 'yes' or 'no'. We ask questions about absolutely everything, along the lines of “Do you support that or not?” It’s really extensive, but it does give people insight into what’s being done at any particular time and what’s possible. Eventually you get a chart showing the processes and what you do online and offline. It gives you a picture of the company.'
A thousand questions. That's a lot, why not build up a database?
'We do. We tell companies we work with that we can benchmark them against other companies, but we don't say which they are, we keep it anonymous. You can chart various industries this way. We did it a few years ago too. You can see then that some sectors are ahead of others. But even within a single sector, the strategic priorities can be completely different. A company that is focused on operational excellence will do very different things online than a company that aims for customer intimacy or a company that aims for product leadership.'
If we look at digital strategy and disruption, where do you expect the greatest disruption in the coming three to five years?
'The focus is currently on developments such as augmented and virtual reality, big data, cloud computing, cognitive computing and the Internet of Things. Conceptually, we make a distinction between digital goods, physical goods and services. Often it is not as simple as that, because many companies do all three or two of the three. If you look at digital goods, such as software, games, news etc., the growth is exponential. If you look at physical goods, you can see that it’s taking longer. Companies may be able to buy or sell goods online, but that is often a small percentage of revenue for many of them. They do it, but it’s not so significant. With services you can see a much stronger swing towards digital, specifically video. I do a lot with banks and financial service providers. There you can see a huge increase in service provision via mobiles and screens. Look at BNP Paribas’s Hello bank!, the first mobile bank in Europe. In Belgium, BNP Paribas Fortis also offers James, a service that has existed for more than five years now and that focuses on a segment of investors that want advice, but advice that’s not bound to a particular place and time. As a customer, you need to have 85,000 Euro available and you’ll be allocated a financial advisor, James. James is available from 7.00 to 22.00 on weekdays and 9.00 to 17.00 on Saturdays. James communicates by phone and webcam. There might be a company issuing a bond that could be of interest to you, so in the morning James sends you a message. That evening, when you’re sitting on the sofa at home, you can have an online meeting with James. Organising that physically is often very difficult.'
Does Vlerick Business School also work on matters like privacy and security?
'Privacy, security and data protection come up all the time in our research. Of course they’re important, but what I notice is that business pragmatism always dominates. There are online participant lists for events, for example. Strictly speaking you're not allowed to publish them online. Then you have to weigh up whether to ask for permission or ask for forgiveness. Some companies choose the latter. Once they’re rapped on the knuckles they say, 'Oh, sorry'. Privacy and relevance are interesting. If I send someone something relevant that is also an infringement of their privacy, how will they react? Take personalised advertising, whereby it’s possible, for example, to download a photo of someone's house and driveway from social media. Through social media it’s also apparent that the person who lives there is interested in a new model of a certain brand of car. Then the person in question gets a great offer on Facebook with a photo of the car on their drive. How do you think people would react to that? Would they freak out, or would they say “Wow, cool, maybe I should click”? You can miss the mark with this kind of personalised online offer and that can be embarrassing, but the pitfalls don't hold back the development.'
And what about security?
'A lot more attention has been paid to this since the big Sony hack. It resulted in a wave of panic among boards of directors in the United States, because the fact that it could happen at a company like Sony was worrying. The joke goes that there are two kinds of companies: those that have been hacked and those that don't yet realise that they've been hacked. Specialists say it’s impossible to provide one hundred percent security. Depending on the level of the incident and the reaction to it, you often see that in the long term the reputation of the company doesn't necessarily have to be damaged beyond repair. There may be a fuss on social media and the share price may drop, but eventually it can be put right again. And that's just as well, as we have no use for defeatism.'
What's on your personal agenda at Vlerick?
‘We have a chair sponsored by Acccenture called Digital 20/20, and we have launched a digital strategy programme. It took a long time before there was a market for this and everyone warmed to the idea. Now suddenly we have four successful editions per year. More and more companies, sectors and people come to us with questions about digital. The theme is obviously catching on. So that’s what I’m continuing to work on and where my passion lies. We also have programmes on big data and data driven marketing, they’re hot topics too. It sounds great, but you have to have the experts in house and they’re scarce. As a business school, we consider it very important to anticipate new trends before they’ve permeated business. That’s why we made the decision a while ago to develop our digital knowledge. It’s also our ambition to turn the classic learning model on its head and to be disruptive. If you provide a programme, you can decide to put twenty-five people in a room and keep them busy for a couple of days, of course, but you can also make online videos in which you cover the whole curriculum. Then people don't need to be physically present at all. In blended learning, there is always live interaction, either physically or via the screen. We look for learning methods that are and remain innovative.'