Latest / The HIDDEN Podcast by Babble / Episode 9: Inside the TPI: Why some businesses make technology work and others don’t
Transcript
- Lynn: If you've been listening to the HIDDEN Podcast for a while, you'll the format one guest, one topic, one conversation. ⁓ Today doing things differently. For the time, ⁓ I'm joined not one but two Babbel executives, and there's a reason for that. ⁓ Earlier this Babel commissioned independent with 1000 UK SMB leaders. ⁓ The result is Babbel Technology Performance Index, or TPI for short. It maps where businesses on the technology. Joining me today is Mark O'Dell, EVP of Products and Solutions here at Babble. Mark looks at how our customers are adopting technology, that changes over time, and how shows up for each of them. Mark, welcome ⁓ If anything in today's conversation made you think, sounds like us, ⁓ TPI assessment is the perfect place to start. It's it takes a few minutes, and it give you a vague score. It tells you group you're in, what that means specifically for your business, and what to do You'll find it in the below. ⁓ The full TPI report all data behind everything we've talked about today is also available there. See you time. ⁓ Mark O'Dell: Thanks for having me on again, Lynn. Lynn: Pleasure to have you. And also joining us in the virtual studio today is Jeremy Langley, our CMO. Jeremy's interest here is market understanding. So he commissioned this research to get closer to the reality of what SMB leaders are actually experiencing with technology. ⁓ Jeremy, It's a pleasure to have you. Technology spectrum, from the ones pulling ahead with confidence to the ones who are under pressure and haven't yet quite found the right way forward. And it identifies three distinct groups that every UK business falls into. Today we're going to dig deeper into what those groups are, what separates them, and most importantly, how you know which one you are. Jeremy: Thanks, Lynn. It's good to be here. Lynn: Awesome. Now onto the research. UK SMB leaders conducted independently by Opinium ⁓ this year in February, and what it found is that UK businesses are splitting into three distinct groups when it comes to technology adoption. ⁓ are what we're calling tech Vanguards, embedding to genuinely drive growth. 34% are Bystanders, not disengaged, not but running hard without the confidence or support to make technology work harder for them. And at 41%, the largest group are emerging adopters making progress but not yet consistent. The gap between those three groups is widening. And the question this episode will hopefully get you to ask is what does being a bystander, emerging adopter or a vanguard mean for my business? Before get into the findings, Jeremy, ⁓ did Babble commission Opinium to conduct this research in the first place? And why should we it? Jeremy: Well, it was really important for us not to be just another vendor polling its customer base to find out what they thought about technology. We've got, you know, four and a half thousand customers, so plenty, but it was really important that we went out there with credible research that we could rerun every single year. So we asked Opinium, who are one of the world's leading market research agencies, to do the research for us. They talked to one thousand genuine business leaders, not people with senior job titles, up and down the UK, so we had a representative sample regionally and across different verticals as well. Lynn: Nice, really thorough research and I think this was just conducted at the perfect time when we see how quickly, you know, technology in and of itself is just rewiring the the world as we know it, especially the business world as well. So that was great to know, Jeremy. So now this next question is just about looking at the groups at a high level. So in particular, what separates a vanguard from a bystander? Is it budget, ambition, sector? Or are there, you know, other factors play? ⁓ Mark O'Dell: I think the start point to remember here, of course, we're looking at SMB. So this isn't about scale. It's not a sort of easy way out of saying, yeah, but they're big they're big businesses, that's why they're succeeding. ⁓ within that, I'm I'm not sure it is ambition, budget, or sector. Yeah, yes, they feed in. But the bigger thing here and what separates the Vanguard is around their discipline and around their structured approach. So Vanguards tend to be successful at lots of things, not just technology. They know where their business is going. They're using technology to help them get there. They've got leadership that think technology is important. They've built that into what they do and the outcomes that they're trying to get to. Vanguards don't just use more technology, they're using that technology more effectively, they're using it better. Jeremy: I would add to that this the concept of confidence. One of the big headline findings that what separates Vanguards from ⁓ Emerging Adopters ⁓ Bystanders was the con confidence. But confidence something that they've just bought to the party. Because, as Mark about, they've got the governance, the framework, the processes for deploying technology, they are more confident. ⁓ So, generally speaking, big difference is we I think about tech forward, they they just turn up, more confident that they can select the right technology, more confident that they can deploy the right technology, and more confident that they can get the adoption and drive the value from it. So that's the big difference. But that again is not something that they're born with, it's something they've developed through discipline. Lynn: but for those people are listening or watching out there that haven't necessarily gotten the chance to ⁓ either read the research or complete the assessment just yet, ⁓ how would they know which group they're in? ⁓ Jeremy: I a kind of ⁓ Two bucket phrase that I use for how organisations think about technology generally how confident they are in the adoption of it, and that's those organisations that see technology spend as IT and those see it as technology spend. It's a simple thing. Generally speaking, if you think technology might be the difference between success and failure, or accelerated growth, or accelerated profitability, then you're going to somebody who sees it as technology versus somebody who sees it being an IT spent. And we see that within our own customers. that spend money on IT, and that's fine, it the lights on, but keeping the lights on is very different to going faster. ⁓ And think there's a couple of other external signals. ⁓ If talk about technology of the board, ⁓ if have a technology strategy or a plan, if you the biggest problems that technology can fix for you, ⁓ you're probably the vanguard, maybe in the emerging adopters, but you're definitely not bystander. ⁓ Lynn: Jeremy, you've already touched on some of the key stats the but one that, you know, particularly stood out to me is the round the one around thirty-four percent of UK SMBs effectively stalling. ⁓ So starting off with you, what is your honest first reaction to stat like Mark O'Dell: I'm not super surprised by it. The the truth is we see that in our customer base. And I've been around in this industry for coming up to three decades. ⁓ and and and it hasn't fundamentally changed because it it follows human nature and it follows the way people people deal with these things. There you have it the exceptionals at e either end a and a and a big mass in the middle. So ⁓ all right, we are we're we're We've got new technology at play here and we've got new issues to deal with, but some of those fundamental traits and the ways people think about things are the same. And whilst the people who are Bystanders might not be the same people, because hopefully you have people moving through the path, what happens is you have you have new people coming in at the bottom of the funnel. ⁓ and our job is to is to help move those people along. Lynn: So, Jeremy, you again had partly answered this question around why are doing this research But when it comes to the bystander in particular, right, they've always been Bystanders. Often in some industries they might be called laggards. So what's the problem with that? Jeremy: Well, I think the stakes have changed its simplest. ⁓ so whereas ⁓ up until now it would probably be you know more than possible to run a profitable organisation and be a tech bystander, to sceptical views on technology, ⁓ to be uncomfortable personally as a business leader adopting and using new technology. But I what's changed is the the advent of AI ⁓ and the accelerant potential that that delivers to organisations ⁓ and the rapidly increasing rise in. Cyber threats, this is not some kind of plateau, ⁓ means that ⁓ you know now has never mattered more. So I think from our perspective, that's that's why we're particularly interested in the Bystanders, because we see such a huge growing risk profile for that, or for those types of organisations as we go forward. Lynn: data that Bystanders spend twice as much time firefighting as Vanguard businesses. So what creates that cycle and what keeps them there, Mark O'Dell: I think says a lot about the businesses in general. So this report, whilst we're technology focused, it's not always talking about technology firefighting. It's firefighting in general. So it's this this classic vicious cycle. So ⁓ a fire breaks out or an issue breaks out. The people rush to deal with it, there's a sense of achievement in getting that that that dealt with the plaster put on brilliant we we we solved that problem. And they go back to what they would consider BAU, doing their day job. And and then another another issue comes along when you you go round and round in this. The problem is if you do that, of course, you're not working on fire prevention. You're not you're not working out how do how do we stop that happening in the first place. How do we be proactive rather than reactive? And a business needs a way to break that cycle. On a technology level, that could be working with a partner, that could be bringing in additional internal resource, or it could just be carving out existing time that you have, but being very specific about it and putting a framework to actually deal with it. And this doesn't have to be huge amounts of time, but just doing it deliberately. And to be frank, if you don't do that as a business, if i if if these Bystanders don't do that on a technical level or or wider, then it's really hard to scale that business. So the Vanguards that what they're doing differently is that they've they've engineered that out and so they've got proper leadership. And eighty-four percent in the in the in our data says that they have proper leadership and governance, ⁓ compared to the three percent in bystander. And I think I think those figures speak for themselves, really. Jeremy: I'd add to that, we have the concept that we call the patchwork tax. And the patchwork tax, one of the three different ways that we look at the patchwork tax, and one of them is efficiency. what we see in a lot of organisations that don't think about technology in a joined up way, these might be kind of organisations that think about IT, is their systems are simply not joined up. ⁓ And really affects a lot of you know, it might affect the customer experience, it might affect ⁓ employee productivity. ⁓ We about the patchwork tax being being you know kind of like you're paying the price for that. ⁓ the reason why you're firefighting is because generally you're using your staff as human glue ⁓ patch the systems together, ⁓ ⁓ that is inherently inefficient and it's going to inherently lead to firefighting. Whereas a Vanguard is more likely to think about, let's take the customer experience or sales productivity ⁓ a joined up process across lots of different platforms. ⁓ you're going to spend more time firefighting if you have a patchwork technology estate if your humans are the glue that keeps it all hanging together. Mark O'Dell: I lo I love that phrase, Jeremy. Human glue. The team of the team of human glue, that's it. Lynn: I was literally about to say the same thing. It painted a very vivid picture in my mind. And I'm also just thinking from the human side of things how sustainable that model is, right? ⁓ so yeah, great points both made that you both made over there. So now we're going to switch gears and talk a little bit more about the emerging adopter. So, Mark, the emerging adopter, as we spoke about earlier, is the largest group at 41%. What makes that position interesting, but also on the On the other hand, what makes that position dangerous? Mark O'Dell: So I think for a start, it shows that they've got a great attitude. They are, to some degree, they're dynamic and they're forward-looking and and they're thinking about how they can use technology and how they can use things to improve their business. That is genuinely exciting. ⁓ the business wants more, it wants to get more and wants to be better. At the same time, it's dangerous because in that middle area you you've quite likely got a lot of false starts. ⁓ perhaps you're you're tracking several technologies simultaneously, and perhaps you're still in the mindset a bit around picking a technology and working with the technology as opposed to what is the outcome that we're we're aiming for. And what what can lead what that leads to sometimes is sort of half implementation. So again we talk about this this lack of governance and management. And they just aren't quite aren't quite getting there. So exciting because we're we're charging forward. Great, let's do a new thing, ⁓ but let's make sure we don't end up with a with a sort of jack of all trades, half finished, never realising that benefits. But definitely good, dynamic, forward looking, we're in a good position, let's build on it. Lynn: ⁓ What's the thing that typically stops an emerging adopter from becoming a vanguard? Mark, you say it's one thing or are there many factors at here? Mark O'Dell: be real, there's always gonna be lots of factors thing, but what is the the standout one to me? The standout one is about defining the outcome. Now, whether that outcome is productivity. So we're looking to make productivity gains by implementing something for the business. So that so the start point is what is it we're trying to do, not what piece of software we can we buy and how do we make that do something for the business. And I think that's it's a it's a significant and important mindset, which is what are you trying to achieve and how is that going to be good for the business? Now what tools, systems, people, whatever I need, can I fit into that to achieve the goal? ⁓ and I think sometimes the the ⁓ the early adopters get that the wrong way around. Jeremy: Yeah, and I think you see that in projects where where people are doing delivery, they're effectively saying the success of this project will be the delivery of this project. Whereas a Vanguard is much more likely to say we expect this technology to accelerate or do this one thing in six months' time. So the end of the project doesn't stop once the tech is delivered, because that's the easy bit. It's when it delivers the outcome that it was originally designed to to to to deliver, generally against a pretty robust business plan. Mark O'Dell: shouldn't be looking at software as the answer and we need to think holistically. What is the process that that fits into? What is the problem that we're solving? How do we enable users to get value of that? ⁓ Are training them as we do it? I have an example which is you could put me in a Formula One car. And in theory, I know how to drive a car. And so that's that's fine. But as a start point, I actually aren't even going to be able to start it. I need a team around me that knows how to do that. And if I do get it started and I get it on the track, I'm probably going to crash it. And then I'm going to think, well, I'm not doing that again. And technology can be a bit like that. You can get the greatest technology and give it to a user. But if you haven't given the systems around it, the training and everything they need, then it's going to fail, and they're going to they're going to want to back away from it and not be part of it. Lynn: Love that. You know, we always appreciate a great analogy over here. now we're going to switch gears and look a little closer at the Vanguard in particular. So, Mark, again, this question is for you. ⁓ Vanguard, which we know make up 25% of the UK SMBs that surveyed. ⁓ What they actually do differently? Because most would assume that they're just making sensible decisions. But we all know that there's a lot more to the story. Mark O'Dell: Yeah, I think they focus on the future a lot more, not just today. This is not just a technology question again, it's it's how where is the future of the business? So they got this DNA about how they think about things, and that means that they they put technology on the board agenda. There's a board paper about it, or a leadership team paper about it. And they've got a structured, methodical decision making progress process rather. ⁓ and that's they do just sensible decisions, but they do it in a systemised way ⁓ for both technology and for. other things in their business. So they are just being functional, they are fit focusing on this outcome and that drives their decision-making process, which means they are more likely, they don't always succeed, but they are more likely to get the things that will make a difference to their business. Lynn: ⁓ there a that Vanguard businesses get complacent that reaching the top of framework, so to speak, feels like a destination? ⁓ Jeremy: I don't think there's a risk that Vanguards will get complacent because if if tech is on your board agenda, if you do have a technology strategy and if you do have a successful track record, it's hard to let leave that behind unless leadership changes. I think the biggest risk for Vanguards right now is that the game has changed. we like visual metaphors, as you said, but one of mine would be fast twitch versus slow twitch muscles. ⁓ Generally, Vanguards have Developed discipline, governance, methodologies, processes to adopt to implement and adopt technology. In an age of AI and massively rapidly accelerating cyber threat, I think what they've got to learn to develop is more fast twitch muscles. So the thing, you know, we if you if you're process-driven, you've got to be very, very careful nowadays not to be process-bound. So I see this with a lot of customers that we have very successful relationships with who are adopting AI or trying to adopt AI. And what they're bringing is the same approach to AI. as they have to practice implementing a CRM and it's it's the wrong approach. The approach you need from an AI perspective is to prototype, to pilot, to let a thousand blossoms bloom. And Vanguards can struggle with that because it sort of feels like it breaks their playbooks. So I think the risk for Vanguards is not that they're gonna forget the importance of technology, but that they bring the wrong playbook to a new game. Mark O'Dell: if you look at that at the level of of massive technology you actually even see the problem there. So think back to the ⁓ early two thousands. Th there were the likes of IBM have substantially now, but they were they were leading the PC market, ⁓ and then Microsoft come in and and do their thing and then Google come in and completely break the market again. That they they are not afraid to try new things and see what happens, but ⁓ It's a balance, isn't it, between trying new things and seeing what happens and just yeah, do everything. It's a big challenge there. Lynn: Yeah, most definitely. All right. So now we are gonna switch gears and just talk about some solutions, right? Now that we've looked a little bit deeper into the three different groups. So Mark, if someone listening or watching knows that they are a bystander, what's the one thing that you would tell them to do first? Mark O'Dell: So first I would have a bit of a thoughts experiment about am I looking at technology as a cost or am I looking at technology as a lever for improving productivity and driving growth within my business? Because if you start to move away from thinking of it as a cost, it opens up all sorts of of other opportunities. Once you've done that, now let's look at the biggest problem that you've got in your business. And and by problem that might be ⁓ biggest amount of time used on something or or highest touch point or something, it doesn't have to be a problem per se. Don't try and boil the ocean, don't try and do all at once, but look at that and go, if we made that 5% more efficient with technology, if we changed it, if we automated some part of it, what's that going to do to our business? And then look at a cost benefit on that. You'll quite quickly see that sometimes technology absolutely is worth investing in, sometimes it is not. But don't solve everything all at once because you won't solve anything. So just pick something Focus on that and make a good job of it. Lynn: Alright, what advice would you have for an emerging adopter? Mark O'Dell: So make sure that technology and the governance of that technology is on the leadership agenda. We've talked about it a few times today, and but the the research and the you know the evidence that I see makes very clear. If it has a place at the board table or leadership table, like the Vanguards do, then it's it's part of what they do, it's part of their their company DNA. Check the value that you're getting out of it. So once you've delivered something, you're already delivering things as an emerging adopter. Check that you're getting ROI on it. And then double down on the things that are working. So perhaps look at the user users in the business that who are succeeding, who are getting the most out of the technology. Understand how that can be systemised into the business and how that can be pushed out more broadly, widen that adoption and make sure that that is fully embedded and everything is going well before you chase new tools or new systems. Lynn: ⁓ Last but certainly not least, what's first thing that you would do if you were a vanguard? Mark O'Dell: Great, you've nailed it. Well, no, you haven't nailed it. But you have nailed technology deployment and outcomes. Clearly you have managed to get some systems go through, and that is great. But have you thought about the whole ecosystem? So at Babble, we think about a business's core operating system, the bits and pieces that pull together to make that company work. So that falls into three broad categories: connect, protect, and perform. So have you thought about those categories? The one that often falls through the gaps is protection, security. Cyber security quite often gets missed in that ⁓ So you quite often start with a performance focus and you've nailed performance, and you've got these tools that have really helped your workforce go great guns. Problem is you've left gaps or you've likely left gaps around security. So the recommendation there is really delve into that cyber security and ensure that you haven't got these risks here that are gonna trip you up and destroy that success ultimately. Lynn: Great advice, well said. All right. now this question is for the both of you, which is, you know, now that we have ⁓ data, right, ⁓ did it actually change about how Babble thinks about the market that it serves? ⁓ Jeremy: I'm responsible for how we show up in the market from a messaging perspective, what content we deliver to the customers to help them be better at their job. And for me, this is a significant shift because we need to talk differently in different ways to different audiences. whereas with the Vanguard, it's probably much easier for us to talk about how to really deliver successful AI prototyping or proof-of-concept exercises. ⁓ for our organisations in the ⁓ certainly in Bystanders and emerging adopters, we're going to talk more about how. How you build a governance or a structure? ⁓ think it also shifts how we show up much more as a sort of trusted advisor, education partner within our emerging adopters and certainly with the Bystanders, as to somebody who helps ⁓ a vanguard unlock more value from what they've actually already bought. Mark O'Dell: I'd just add that it it hits home ⁓ The the reason we don't sell widgets, the reason that we as a business aren't aren't out there just selling things, we're selling what that can drive in terms of an outcome. We know that handing over a license and walking away is gonna fail. we know that we need to build more support and service around it and make sure that the customers are getting a true ROI from the things that they buy. And we need to help them embed that with users. Really that's that's what Babble is here to do is an entire that's our entire reason for being here. Jeremy: I think a l a lot of technology vendors have have forgotten a very basic sales lesson, which is nobody buys a drill, they build a hole, right? ⁓ and so I think what's it's suited a lot of technology organisations over the years to sell the drill. But nobody wants nobody wants our technology, What they want is a more productive workforce, a more secure workplace, right? They want a better customer experience. ⁓ and so that's ⁓ how we've got to show up for our customers. ⁓ What's the outcome? And then that shifts our messaging, that shifts our service strategy, that shows it shifts our product portfolio. And it means that we start every conversation with our customers, which is what are we here to achieve? I know you say you want this tool, but before we sell you the tool, let's check what the end goal here is and make sure that this tool can deliver what you're looking for. Lynn: Love that. All right, that would have been the perfect place to end this, but I do just have one final question for the both of you, right? So this research will be conducted annually. So where do you think UK SMBs will be this time next year? Jeremy: Well, first of all Arguably the results that we've got just follow a standard curve, right? So know, we've got ⁓ s large chunk in the middle, and we've got the Vanguards on one side and the tech Bystanders on the other side. So do we expect that to materially shift? No. But ⁓ we're spend much more time looking at next year is the actual relationship between where you sit and how fast you are growing. So we we we are forecasting that that 34% that have that are tech Bystanders that have probably until now run very successful you know. So with no question about that, as successful as the Vanguard, successful businesses, we forecast widening gap in terms of rates of growth, profitability, productivity because of AI. We also as ⁓ cyber risks grow because it's cheaper attack today, that those organisations that towards the bottom of that distribution curve ⁓ be far more exposed. ⁓ Far more exposed. We think that's a risk of organisations literally ceasing to exist. Mark O'Dell: Yeah, and I don't I don't think there's much more to say than that. I suppose the ultimately you look at a shift of the people that are in those pockets. What we would hope to see is that certainly within our customer base, we've met we've managed to move move people up the chain, we've managed to get them to benefit more from technology as individuals. But there's always there's always new businesses coming in in one end and there's always ⁓ great businesses exiting out the other end. So it's it's it's a continual chain. Lynn: Alright, so without further ado, Mark O'Dell, Jeremy Langley, this has been brilliant conversation. Thank you both so much for being here and look forward to the next conversation. Mark O'Dell: Thanks, Lynn. Thanks, Jeremy. Jeremy: Thanks, Lynn.