In times of crises, most should look upon downfalls as an opportunity to grow and innovate. At Hatch Quarter, we understand first hand about innovation and digital solutions as it is the heart of our advisory and values as we work with entrepreneurs, startups and other members of the innovation ecosystem in Australia and beyond.
On the 5th of May 2020, the Australia Arab Chamber of Commerce and Industry (AACCI), the Australian Business Group Abu Dhabi (AusBG) and Australian Business Council Dubai (ABCD) hosted a webinar focused on business transformations, communications, management and international regulations in the context of COVID-19. More specifically, tips and insights on how to survive and thrive with small, medium and enterprise (SME) businesses through digitisation and innovation. The webinar audience consists of diverse individuals including Australia and the Middle East and North Africa (MENA) region and were delighted with the opportunity for a Q&A session.
Moderated by Jessica Swann, the webinar was certainly high-valued and insightful with the panellist consisting of notable Australian business leaders and bringing together a wealth and range of perspectives in business viability and growth. The panel consisted of Kate Midttun (Founder and Managing Director of Acorn Strategy and works across Australia, the UAE and the UK), Carl Dowling of CBD Corporate Services (Managing Partner at CBD Corporate Services and is based in the UAE), and our very own Aiman Hamdouna (Co-Founder and CEO of Hatch Quarter).
Some of the key takeaways from the webinar:
Innovation and customers is a two-way street
In successful Tech startups, the whole product is built on customer and user feedback. Startups leverage technology and innovation to solve a “big problem” in a scalable and replicable manner. So to find out what is the actual problem and the most innovative way to solve these “big problems”, user engagement and feedback must be intertwined with product and service development.
There are many examples of building an entire product to then realise that customers are not willing to use the product after launch. On the other hand, it is also a rare occasion that innovation is the one concurrently shifting consumer behaviour and preference (e.g., Steve Jobs and how Apple did not conduct consumer research in the initial development of most products).
Therefore, the relationship between innovation and customers is a two-way street. Both feeding into each other and creating a demand for change and improvement.
Traditional businesses can retain identity through digitisation
Identity is very important for businesses as it is not only about branding but also about how people feel about the business, how it is communicated with the customer and what the business’ values are. Moving from traditional to digital does not necessarily mean that your business identity will be lost or drastically changed.
An example of a traditional business adopting digital solutions and enhancing their brand is the international brand McDonald’s, they have transformed their customer experience by implementing digital solutions. Touch screen self-ordering stations as well as an mymacca’s app and embracing delivery apps such as Uber Eats. As evident, the McDonald’s brand has not lost its identity but has enhanced it.
In essence, if done correctly, the traditional business would not be losing their identity when they turn to digital solutions. In fact, they would be able to enhance it and build on it. Going digital can be the right excuse or opportunity to improve the business and refresh its image and services.
COVID-19 has changed the way digital businesses generate revenue
COVID-19 has not only changed how the digital business generates revenue, but it has also changed the way all businesses generate revenue and how people all over the world buy and consume. A survey by the Boston Consulting Group shows that the use of mobile phones to complete online purchases has tripled from 8 to 24 per cent between 2016 and 2018 in Australia (source). This shows that consumer behaviour was already on the trajectory of increased online activity and COVID-19 situation incited a bigger push for online activity.
What the COVID-19 crisis did was accelerate the adoption of digital platforms by customers, as lockdown restrictions made it the only or most convenient choice. This is evident in a survey by Engine finding that people are spending online 10 to 30 per cent more on average since the start of the pandemic (source). So for businesses, COVID-19 has been a wakeup call regarding their digital strategy and its place in their future.
For SMEs, looking to implement a digital transformation strategy, using a digital platform, just like any changes implemented in a business, should have a Return On Investment (ROI), whether it involves leveraging external opportunities or enhancing internal processes. The ROI usually is a reduction in operating cost, which increases the profit margin for their existing products or services. Or an increase in demand and more services or products are sold. However, there is another way to make some ROI from digital transformation is by monetising this infrastructure (e.g., sponsorships and advertising—if you have a significant amount of traffic to your page in a platform, this virtual location could be sponsored to advertise a company with a similar target audience).
Diversification can help boost startups from concept to a minimal viable product.
Diversification is vital in all contexts of life and business and could mean a range of things depending on the context. For startups, diversification is required to address the shortage in skill sets and knowledge. From ideation to MVP, the process involves a lot of market research and technical developments which require a range of skills and knowledge.
It is vital for startups to build the right team, and especially founders, to recognise what they’re lacking in, especially since startups usually have a small team, more often than not, of less than five including the founder. Therefore, they have to diversify the skill set of the team and avoid duplication to be as efficient as possible (e.g., an extinguished medical professional coming forward with a Medtech idea, but with no IT background, means the medical professional needs to get in touch with a developer to cater for the gap).
In addition to the diversification of the skill set, a diversification of work experience and cultural backgrounds is also equally important. Most startups aim to scale globally one day, and therefore, diverse knowledge and background of individuals are necessities in bridging the company to the world. A survey conducted by Boston Consulting Group shows that organisations with above-average diversity in their teams, generate 45% more revenue from innovation compared to other companies that lack diversity within their team (source). This is a direct testimony of the importance of diversity in bringing out new perspectives that lead to advanced problem solving and innovation.
A webinar with notable Australian business leaders who are operating and have operated in the MENA region brings together the diversity of thoughts, insights and strategies. We are all living in unprecedented times with valuable resources and potential solutions to strive for and capture. It is now more important than ever to embrace digital transformations and solutions and to do so with a growth mindset.
By: The HQ Team