Traditional companies already know that they must embrace digital technologies and data if they are to compete in our ever-digitising world. It’s not new, and tech and data have been part of growth strategies for a while. But with the increasing pressure of the post-pandemic world, global inflation, and an accelerating pace of digital transformation across all industries they have risen to the top as one of the key megatrends of our time and we’re at the start of a super-cycle of tech-enabled growth.
But to assume it is just about investing in tech and data is missing the point. FinTechs have been built as digital companies from the ground up. They not only have the tech platforms and data insights required to succeed, but they also have different ways of working and typically different cultures to traditional enterprises.
If you’ve ever worked at a large company, you’ll know that the most common culture is one that sustains operational stability and steady growth. Leaders and managers are taught, incentivised, and encouraged to optimise the machine. They are discouraged from taking risks and leading a revolution. It’s more evolution than revolution.
Culture is shaped by people and sustained by them, and if you want to change it you need to add new people, with different views and experiences of the world. That’s why diversity is so important. If you keep hiring the same kind of people, you sustain, you don’t transform.
The other aspect of culture is leadership. Leaders implicitly and explicitly shape culture. From how they act and their values to their ability to be open-minded and allow the space for different views and ways of working. Ultimately, they need to have a growth mindset, but also have the ability to keep a business operating effectively and profitably.
The other thing connected to culture is ways of working. If you are in a fast-paced, evolving industry you are likely to have an entrepreneurial culture and light-touch processes and ways of working that enable flexibility and adaptability. If you are in a long-established industry, like traditional banking, you are likely to have high-touch processes, internal rules, silos of teams to hand off to, etc. Which leads to a culture of risk aversion and sustainability.
So, if traditional firms want to be more like FinTechs, sure they need to invest in tech and data, but they also need to seriously think about their ways of working, their culture, their leadership and the diversity of their workforce. Easy, right!?
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