By Amr Ismail (Miro)
The Italian business landscape is dominated by small and medium size companies, few large multinationals, and a noticeable absence of a vibrant start-up culture. An environment rocked by an annual departure abroad of over 80,000 Italians of whom the majority is under 35 years old, representing a brain drain problem for a market lacking nimble business leadership.
At first glance, the business culture can be characterized as bureaucratic, top down, and rigid. And despite great developments in corporate governance practices, it is still a big challenge for Italy to move control away from majority shareholders and to give greater power to boards of directors. There is still dominance of family control and low percentage of shareholders with rights to vote which create a conflict of interest between majority and minority shareholders, representing a less than efficient business model.
Current and future development of sound corporate governance practice in Italy should therefore focus on diluting decision-making powers in a company. Minority shareholders should have greater influence, while guiding investment in management professionals acting as change agents to make decisions. This would result in long-term profits, and in attaining market recognition; and in medium and relatively large size companies which are listed or aspire to be listed, it would make them attractive to the right investors. Shifting thinking from only reporting profits to include creating short and long-term value is considered to be the way forward. Equally important is shifting attitude toward risk, however to increase risk appetite in decision making may come at a price given the current geo-political uncertainties.
Another area where many Italian businesses fall short is employee engagement. There are no shortcuts here, companies need to be clear about what is coming down the road along the digital highway. It is still much less costly and a better option to train good existing employees than to let them go and bring in new ones who have to learn the business and how things work. This is a sensitive area for any company that cares about issues of trust and social responsibility.
The entire value chain starting from operations impacted by industry 4.0, passing by a digital workplace, and ending with customer experience is forcing itself on Italian businesses who may either view this as an opportunity or as a catastrophe depending on the willingness and the speed of their transformation. The fear, I see, in going through the lens of change, is in companies not factoring in the human dimension adequately as they pace systems and processes. Most companies embracing digital workplaces are not paying enough attention, or outright overlooking people and business culture, and do undermine the focus on customer experience.
Here are some pointers for top brass in companies to help begin drafting an effective business mode for the road ahead:
Map the external business environment and revise business strategy models. This environment has no defined barriers to entry, and will require fine tuning mission and objectives. Understand how known players are shifting their business model, and strive to fend off against unknown players coming in.
Embrace the digital workplace, and adapt business process and methodologies while questioning all pre-existing assumptions about company positioning and mission.
Formulate a plan to align multi-generation teams in total harmony. This can be done through a robust training program linked to employee evaluation, while steering all levels of management toward a leadership style aided by the company motto. The focus on people development is key to success. The learning curve should seek to exploit both the vast experience of older generation employees and the knowledge of young digital savvy ones. Keeping in mind that no class of managers has a monopoly on the learning curve. You can’t teach leadership in this new environment, but you can develop it; and it can only be developed in a collaborative and transparent environment.
Formulate business strategy in a seamless feedback hyperloop. The thinking in terms of 3,5 or other number of years business strategy is outdated and is sure to cripple the effectiveness of the business process.
Inject a change mindset in every level of management, it is continuous and will require massive training as it impacts all kinds of decision making. Pay attention to company culture, identify pitfalls, and take hard decisions to change what is not working.
Develop internal communications with a clear sense of cross function collaboration and seamless information flow to achieve the highest level of transparency possible. This, I consider to be the steering wheel to pin down any deadlock in daily business activities, and for all leaders and managers to plan, manage and execute meetings efficiently. “Intranet tools” should always be an ongoing project between business managers, IT and HR.
Have a full and unambiguous understanding of customer experience and work extra hard to meet expectations and engage your market.
And yes, there are some clear strategies to follow, yet how to change course and how to control the speed of change all depend on company readiness, talent development and capabilities.