Dutch global information services company Wolters Kluwer was founded in the 1830s as a publishing house.
Now, the company earns more than 90 percent of its revenue from digital, thanks to a successful digital transformation (DX) by CEO Nancy McKinstry, who stepped into her role in 2003 — when they earned just 31 percent of revenue from digital.
McKinstry persistently kept her firm investing in product innovation, remaining patient while consumers adapted to these new products and services.
In a recent episode of HBR IdeaCast, McKinstry — who recently landed as the highest-ranked woman on Harvard Business Review’s annual list of the world’s top CEOs — sat down with host Curt Nickisch to talk about leading her company through its DX journey.
Here are some select moments from the episode, which you can listen to here:
- “I got to do a lot of really interesting work, you work on really complex problems, right? And so what that taught me was first of all, to be very data-driven because often it was the data, whether it was going out and talking to customers, or talking to competitors, or actually doing analysis with numbers, but it was the data that ultimately would largely drive you towards the solution.”
- “What’s so exciting for me as the CEO and certainly the excitement among our employees is that this next wave of transformation is really rewarding because we’re adding so much more value to our customers and at the same time we can see that the profit pools will increase, therefore we’ll have more investment to drive even further growth.”
- “Really engage with your customers. Because I think sometimes you can go down these transformations and you might expect your customers to be doing certain things, or adopting things in a way that is not going to be the case. So you have to stay really close to your customer during the journey to make sure that you’re not way too far out in front, or you’re not investing in things that maybe aren’t going to pay off. So that close proximity to customers is very critical.”
- “Some of these things take some time. [Have] the strength and the courage to keep the investment going. There’s pressure on OK, show us the results. You made all these investments. When are they going to pay off? And you really have to have kind of the strength of your own conviction and your belief in the strategy to keep investing. And versus it’s easy to say OK, let’s just go for cost cutting. That’s much easier than to go for innovation and growth.”
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
Which innovations will shape Canadian industry in 2019?
Canada is in the midst of an economic shift. New and traditional industries are increasingly being driven by innovation and these advances in technology are shifting the economic landscape at an unprecedented pace.
This is the assessment by Borden Ladner Gervais, which is Canada’s largest law firm. The company has issued a new thought leadership report, titled “Top Innovative Industries Shaping the Canadian Economy”.
The report weighs in on the opportunities and risks Canada faces in order to maintain its status as an international leader in innovation across eight key industries: cybersecurity, the Internet of Things, smart cities, cryptocurrency and blockchain, autonomous vehicles, fintech, renewable energy and cannabis.
To find out more about the report and its implications for Canadian businesses, Digital Journal spoke with Andrew Harrison, a partner at BLG.
Digital Journal: Where does Canada stand as a global tech innovator?
Andrew Harrison: Canada has always been at the forefront of innovation. Products developed by Canadians or Canadian companies encompass a variety of industries and include medicinal insulin, the snowmobile, the telephone, the pager, BlackBerry Messaging, IMAX, the Canadarm and the goalie mask, to name a few. Canadians are also fast adopters of new technologies; email money transfer between individuals, which was inconceivable only a few years ago, has been used by 63 per cent of Canadians.
This is why Canada is recognized worldwide for its research and technological know-how, but we have to be mindful of the challenges in a global competitive market.
DJ: What potential does Canada have to grow faster? Is this sector specific?
Harrison: Canada is well positioned to succeed and take the lead in all innovative industries, but there are definitely sector-specific challenges that could limit this growth. For example, the lack of regulation as to whether cryptocurrencies are considered securities or not is creating uncertainty, which may restrain investment in this sector.
DJ: What are the risks that could hamper innovation and development?
Harrison: For any new product, financing is always an issue; with innovation, money becomes an even more crucial element. Companies must have access to capital – including from individual and institutional investors – if they want to bring their innovative product/process to life. Evolving politics and policies can also have a significant impact.
DJ: What framework will Canada need in the future to secure its innovation potential?
Harrison: The key element is finding a proper balance between regulating the issues that might be created by the innovation itself or its use and providing a space where innovations can thrive without too many restrictions.
DJ: What does the Canadian government need to do?
Harrison: In many cases, laws and regulations were enacted long before we saw these innovative technologies and products brought to life, so they need to be updated. In certain sectors, such as cryptocurrencies and autonomous vehicles, the Canadian government has yet to provide a framework that would define the playing rules for all participants.
The government will also need to take a look at its current regulations on privacy: the coming into force in May 2018 of the European General Data Protection Regulation (“GDPR”) and recent high-profile data breaches have created the need for stronger privacy guidelines. Failure to do so could prevent Canadian businesses from accessing the European market.
DJ: What can academia contribute?
Harrison: Universities play a big role in fostering innovation – they could be the home of research and innovation and incubators of ventures, entrepreneurs, and tech talent. Universities can partner with industry players and have their researchers work closely to solve key industry issues. This is already happening in Canada. The Smith School of Business and Scotiabank, for instance, have partnered to set up the Scotiabank Centre of Customer Analytics at Smith School of Business to bring together professors, graduate students and analytics practitioners to collaborate on applied research projects in customer analytics. The academia plays a big role in creating an innovation ecosystem.
DJ: What is Canada’s most pressing technological need?
Harrison: There is still much work to be done to connect with Canada’s rural and remote communities. In 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) declared that broadband Internet amounted to an essential service and adopted minimal performance standards across Canada: 50 megabit per second download and 10 megabit per second upload. However, the evidence presented to the Committee by a variety of stakeholders shows that the digital divide remains prominent in Canada – it is estimated that it will take roughly 10 to 15 years for the remaining 18% of Canadians to reach those minimums. Canada needs to develop a comprehensive rural broadband strategy in partnership with key stakeholders and make funding more accessible for small providers.
DJ: What type of investment is needed with skills and training?
Harrison: Canada has a serious shortage of tech talent, which makes it imperative for both the government, the education, and the business sector to invest in raising and fostering STEM talents. To help businesses attract the talent they require, the federal government is offering hiring grants and wage subsidies to offset payroll costs for recent post-secondary STEM students and graduates.
What does Alibaba’s new AI copywriter mean for advertising?
Earlier this week, Alibaba debuted their new artificial intelligence-backed copywriting tool that — with the literal click of a button — can produce thousands of ads every second. What does this mean for the advertising industry?
According to Alimama, the marketing platform for Alibaba, the new Chinese-language tool is capable of producing 20,000 lines of copy per second, and has passed the Turing Test. Adweek reported that Alimama did not provide any details as to how the test was conducted.
Alizila, the platform for updates on Alibaba, wrote that “brands using the new tool, such as fashion chain Esprit and Texas-born clothing brand Dickies, can adjust the length and tone of their copy, such as dictating whether they want the tone to be ‘promotional, functional, fun, poetic or heartwarming.'”
According to Mumbrella Asia, Alimama said the tool “uses deep learning and natural language processing technologies learn from millions of top-quality existing samples to generate copy for products” By pressing the ‘Produce Smart Copy’ button, customers will have their copy instantaneously.
— Mathias Philippe (@kolargol) July 5, 2018
How does the industry cope?
The discussion around digital transformation in marketing and advertising has long-since shifted from just moving off paper and on to the the screen: the industry is dealing with threats from all sides.
Sushman Biswas from MarTech Advisor wrote a column last year about the digital transformation challenge for advertising agencies. In it he writes:
“At a time when consumer choices are unpredictable, the one fact that agencies can control are designing strategies that focus on delivering great experiences rather than mere selling tactics. The constant barrage of messages that a consumer comes across on multiple channels every day only confounds their buying decisions… With the wealth of data available to advertisers today, it is important that they leverage these people-based insights to drive hyper-personalized, immersive and real-time consumer experiences.”
An employee-first approach
This discussion around creating experiences over using selling tactics to market and advertise a product is especially pertinent now, with the emergence of a product that does the latter.
“To fully transform the way brands talk to their customers, it’s firstly vitally important to first change the way your business talks to its workforce,” writes Katya Linossi from The Drum Network, about a people and employee-first approach to creating these unique customer experiences. “In order to provide this superlative service, we need to have the right infrastructure and tools internally to meet our client’s growing demands. And our employees need to not only have the enthusiasm to help clients on their own journeys of discovery, but have access to the tools and resources to help them consult better.”
Putting employees at the forefront of a company’s digital transformation is a suggestion that comes up often, regardless of the industry. And at a time when new tools that have the capacity to take over jobs are popping up, leading research suggests that it’s essential to take this people-first approach, while embracing and not being fearful of new technologies.
Q&A: Paul Teshima, CEO & Co-founder, Nudge.ai, on how to build a sales team that scales
One of the most important — and hardest — aspects of running a scaleup is figuring out how to transition sales from being founder- to team-driven.
One of the most important — and hardest — aspects of running a scaleup is figuring out how to transition sales from being founder- to team-driven. Paul Teshima, CEO and co-founder of Nudge.ai, knows how important it is to growth.
Teshima is a Canadian-born serial entrepreneur who, as part of Eloqua’s executive team, grew that company to more than $100 million in revenue over 13 years before it was acquired by Oracle for US$957 million in 2012.
In 2014, Teshima launched Nudge.ai, a relationship intelligence platform that helps businesses find and build the right relationships to drive revenue. He secured an office in OneEleven and along with his co-founder Steve Woods (also a co-founder at Eloqua), and they have grown the company to 22 employees, landed several major enterprise clients and more than 20,000 B2B users on the platform.
Bilal Khan: How did you manage the transition of startup to scaleup when founders go from being the primary salespeople to building out the sales team?
Paul Teshima: One of the most important aspects of scaleups is figuring out how to transition sales from being a sales team of one as a founder to a sales team. It’s also one of the hardest. Founders often overestimate how much they actually know that no one else knows, decisions that they can make in their brains at the drop of a hat in a deal cycle. It’s really important to try and simplify and understand what could be translated salesperson that they can then repeat over and over again.
I also think that first hire is super critical to be much more of an entrepreneurial sales person. A classic best practice as you continue to scale is hiring them in groups of two so that you can start removing variables because it may not be the right time to transition it you didn’t hire someone with the right skills. That stage is really delicate and you will need to be patient.
Khan: Have you transitioned Nudge.ai into a sales team approach as opposed to the founders?
Teshima: I’d say that we’re still in founders plus a bit of hybrid sales teams. So we’ve got some salespeople working on that delicate transition period now. I can tell you that I’m already overestimating how much I think they know because I know and take it for granted. I mean, of course they don’t know, it’s in my brain still. It’s about being methodical. We just brought someone in to help us really try and simplify the sales process to determine what can be scalable.
Khan: When do you start thinking about finding a seasoned sales leader? Do you immediately find someone who can start building a sales machine or is this further down the road once you hit your stride?
Teshima: It depends on where you are on a revenue curve plus the capital you have and the talent that’s available at the time. There’s definitely an argument that you hire the Director of Sales first that can carry the bag and helps to scale that initial phase. But there’s also an argument about hiring a hands-off VP to go build up the entire team. Both require early evidence of some form of scaling. You have some sort of process that defines how the sales process works today and there’s some of the things that we know in terms of the metrics about it.
Khan: What are some of the key metrics for a sales success that you think are important?
Teshima: There’s obviously the output of generating revenue in the growth program. For us, we’re in a product-led model so it’s a little bit different and a little newer. We look at early stage interest as signing up for a user, finding a cluster of users account — is it qualified product lead? — and then we ask if we can turn that into a trial that converts to a paying customer. We look at those stages which is a little different than the classic B2B funnel.
Khan: In Canada, we talk a lot about whether we have the sales professionals with the deep skill set to be able to scale companies and do B2B sales. Has finding sales talent been a struggle for you?
Teshima: Are there less seasoned salespeople in Canada who have gone from $0 to $100M than in the Valley? Yes. Do we need to solve that problem? Absolutely.
I’ve been lucky that I’ve been part of the business that has gone from $0 to $100M in revenue (Eloqua) and we didn’t have anyone to rely on but ourselves. I think it’s just a matter of going in and doing it. You are seeing lot of seasoned people coming back to Toronto and as that continues to happen you’re going to see those people train others to get to the next scaling point.
[Sales] is really about the discipline of keeping in contact and helping others in your network, knowing that it will pay back over the long term. We did a study where we showed that the average head of sales has a strong network at work that’s three times the size of an sales development rep, which makes sense.
Khan: I wanted to talk about B2B sales cycles. Those are really challenging time frames in cycles to manage when you’re starting a company. How have you hacked in on the early stages of the sales cycle from a simple cash-flow perspective?
Teshima: The hardest part of closing an enterprise deal is first finding it and then getting involved in the sales cycle itself because they’re so inundated with a barrage of outbound outreach from all these customers. The strategy I recommend to scaleups is this: You have to show some pocketed value, lock them in and then go division-to-division quickly. And do it cheaper than a competitor. Try that approach versus just the top down approach right out of the gate.
Khan: Would you do that at the expense of generating any revenue?
Teshima: Enterprises today actually have slush funds to experiment with technology where they didn’t before. It is absolutely true that if they put some skin in the game, you’ll have a more successful pilot. This opportunity allows you to qualify those deals earlier. I think you need to be pretty disciplined about qualifying and if you invest in the cycles and then put a price on it.
Khan: So you’ve landed the customer and they are paying for the product offering. You’re coming to a renewal cycle and they scale back their offer. How do you address a situation like that?
Teshima: We haven’t had that happen at Nudge.ai. If I think back to me earlier days at Eloqua, there were times when customers pulled back. It’s only a death cycle if you don’t learn from it for the other customers that are existing. You should never forget that customers can always come back in and in champions can always move jobs. You always want to do right in those situations because you never know when you’re gonna meet them next in the ecosystem. Maybe they’ll evaluate it differently.
Khan: How do you think through channel partners strategically?
Teshima: In cloud software, it’s more challenging to have channel partners because of the nature of the product. On the technology side, there is probably good synergies. On the service consulting side, I think it’s harder. If you think training your first salesperson is hard, try training channel partners all your stuff, when they have 20 competing things to sell and they’re making a small margin on your product.
You first need to establish that you can direct sell your product in a repeated way before you think about channel partners. You can get lucky and find one strategic one and go big, but more often than not you’re going to find that they’ll get all excited, get trained and they’re not going to sell anything. Even if they do close something, maybe it’s not exactly the right fit. I’d say be careful with channel partners in early stages.
Khan: Are there any books that helped you in your scale journey?
Teshima: I am probably less of a book guy than I should be as a CEO. There are two books, however, that I found helpful:
- Jim Collins’ book “Good to Great”. I especially liked chapter five about managers and this idea that the best managers, CEOs and executives don’t even want the spotlight. They’re much better being extremely streamlined and determinedly humble, inwardly focused on driving change.
- “Switch” by Chip and Dan Heath. One thing that came out of that was this idea of focusing on the bright spot in your startup. As a founder, you’re geared towards focusing on what needs fixing. It’s actually better and more uplifting for the business to focus on the bright spots.
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