77% of SME leaders do not have the skills required to successfully implement new technology into their businesses

Skills for success: Supporting business leaders with digital adoption 

The embrace of technology by small- and medium-sized businesses (SMEs) across the UK has rapidly accelerated since the Covid-19 pandemic first began – accelerating innovation in the process.

However, we also know that of those businesses that adopt technology, most are unsuccessful.

The Open University (OU) has jointly published a report with Be the Business titled “Skills for success: Supporting business leaders with digital adoption“. The research involved surveying 1,500 business leaders of SMEs from across the UK and listening to the experiences of businesses which have needed to make drastic changes to adapt to the challenges presented by the pandemic.

The report seeks to answer the key questions around digital adoption, skills development and what more needs to be done to stimulate economic growth and raise firm-level productivity.

New report reveals 

• The Open University and Be the Business report also found that while business leaders value training and technology, time and money barriers stand in the way of upskilling.
• Only 50% of business leaders say they plan to address gaps in skills in the next 12 months.
• The value of technology isn’t clear to all business leaders, with only a minority seeing it as having a positive impact on increasing efficiency (39%), revenue (31%) and profit margin (27%).
• However, rapid technology adoption over the past 15 months of the Covid-19 pandemic by SMEs demonstrates there is an opportunity to maintain the uptake of technology and digital skills.

Covid-19 accelerated the adoption of collaboration and e-commerce software, for example, in more than half (54%) of UK SMEs. Of the business leaders who adopted new technology or accelerated its use due to Covid-19, at least 85 per cent plan to continue using it at the same level once restrictions are fully lifted.

Large companies have the resources, often at an integrated departmental level, to deliver skills and training, and successfully adopt technology. However, as many as 30% of business leaders surveyed said time and cost can make digital adoption too expensive and too time consuming.

On the other hand, the report found that even without dedicated resource, many small- and medium-sized businesses have shown themselves to be flexible and resilient around digital skills and training, with 70% of business leaders expressing an interest in some form of learning and development in the next 12 months.

In addition, approximately a quarter of business leaders turn to technology providers for direct support across the four stages of tech adoption – objective setting, purchase, implementation, and ongoing maintenance – but a higher proportion rely on internet searches at the objective-setting (31%) and purchase (28%) stages.

The report’s other key findings include:

• 77% of SME business leaders say they do not have the required skills to successfully implement new technology into their businesses
• Only 50% of business leaders say they have a plan to address gaps in digital skills in the next 12 months. While business leaders value training and technology, time and money barriers stand in the way of upskilling.
• Two thirds of business leaders (67%) say they are confident in adopting technology, although only half (54%) think they make good purchasing decisions about technology.
• Business leaders value basic digital skills (33%) or technical understanding of technologies (20%) ahead of the leadership skills required to successfully implement technology (12%).
• The report also found the value of technology isn’t clear to all business leaders, with only a minority seeing it as having a positive impact on increasing efficiency (39%), revenue (31%) and profit margin (27%)
• One fifth (21%) of all business leaders don’t think adopting technology could have a positive impact on their business at all.

Interestingly, contrary to popular belief that young people are more tech savvy, leaders aged 35 and older report being more generally knowledgeable about cloud-based computing, online accounting, video conferencing and cyber security. In contrast, younger business leaders (18-34) are more knowledgeable about marketing automation and Enterprise Resource Planning (ERP) software, highlighting differences in understanding according to the type of technology. Younger leaders are also most receptive to training.

SMEs know that being ahead on technology adoption is a crucial factor in determining their competitiveness and productivity, yet the UK lags behind its competitors in this area.

The report also includes recommendations for business leaders and for those delivering the learning and business support ecosystem, plus case studies of UK SMEs investing in skills to deliver digital success.

Key recommendations for business leaders looking to adopt technology successfully, include:

• Identifying the right digital tools to tackle a company’s biggest challenge
• Securing time and budget to enable an attitude of continuous learning
• Empowering SMEs to embrace a digital culture
• Recognising the power of a varied skillset in an organisation

Jane Dickinson, Digital Skills Lead at The Open University said:

“The pandemic has forced many business leaders to rapidly reassess how they do business and the role of technology. Digital skills are now front and centre to current thinking across all sectors as businesses look to successfully adopt digital technologies.

“If we are to make levelling up a success and assist SMEs in developing the skills they need, then it is essential that everyone plays their part.

“SMEs provide great environments for talented workers to fulfil their potential through lifelong learning. If business leaders can adopt a ‘grow your own’ approach, then it is a win-win-win for the employee, employer and the economy. But there are some barriers to overcome – not least the time and cost investment and our report reveals how SMEs can chart a path to grow the digital skills for the future.”

Anthony Impey, Chief Executive at Be the Business said:

“Great leadership combined with productivity enhancing technology is at the heart of our most successful businesses. 

“But adopting new digital technology can be challenging, even for the most confident business leaders. That is why getting the right skills and training – focused on both digital and leadership capabilities, is essential.”

A ‘top down’ culture of lifelong learning is key to success in the digital age – DIGITALLY- SAVVY BOARDS POWERING GROWTH 

3 Feb 2020: Digital transformation needs to be led from the top, with senior leaders and C-suite professionals proactively developing the skills they need to lead in the digital age.

The advice comes from The Open University’s Leading in a Digital Age report, which points towards a correlation between business performance and leaders equipped to manage digital change.  The report reveals that investment in senior leadership training brings tangible benefits to the whole workforce, which will prove crucial for organisations looking to develop digitally.

The study found that nine in 10 (88%) leaders who had received digital training the past year went on to report organisational growth, compared with less than half (49%) who had not received any training. 

The benefit of senior digital skills development aren’t just being felt on the bottom line: leaders who invested in digital skills training are experiencing improved productivity (56%), greater employee engagement (55%), enhanced agility (42%) increased profit (42%), and improved staff retention (33%).  Additionally, 83 per cent of leaders who received digital training felt more inclined to encourage colleagues to undergo similar courses.

However, many leaders questioned admit they still lack the requisite skills to manage in the digital age, with four in 10 (44%) saying their organisation is falling behind on embracing new technologies such as AI, augmentation and automation.  Nearly half (47%) say they could do more to address their own digital skills deficit and 78 per cent acknowledge they’d benefit from more digital training.

A key barrier, the report suggests, is a lack of understanding when it comes to digital leadership. More than one in three (37%) leaders confess they are unsure where to start when it comes to developing their own digital skills. Moreover, nearly two thirds (64%) say they tend to buy in the digital skills they need rather than training their workforce. But the university believes that a culture of continuous learning and development in line with digital progress would prevent these stumbling blocks emerging for organisations in the digital age.

Leading in a Digital Age combines the university’s experience and academic insight with research amongst 950 CTOs and senior leaders within UK organisations. The study reports on the benefits of digital skills development for senior leaders.

The Open University’s Chancellor, Baroness Martha Lane-Fox commented:

“We’re living in a digital age where the development of technology affects all areas of our lives from the workplace to our homes. But in a business context, digital presents a very real opportunity to become more profitable, yet for those who fail to embrace change there is a real risk of being left behind.

“For a business to survive in this world, workforces must be equipped to harness the power of digital technologies, and understand how technology can positively impact their work. Digital leadership is vital to making this vision work, with senior teams fostering a culture of digital adaptation, starting with improving their own digital skills, and then cascading that knowledge throughout the organisation.”

Jane Dickinson, Digital Skills Lead at The Open University, added:

“The workplace is in a constant state of flux with disruptive technologies and innovations seeing organisations under immense pressure to keep growing and adapting or risk being left behind. Those organisations that fail to grow and adapt risk being left behind. Leadership needs to adapt to a bold new world, in which those at the helm are possessing or developing the right skills to thrive in the digital age and enable them to lead with confidence and influence.

“Without a thorough understanding of the digital workplace, how will they know what questions to ask, or what action to take? By failing to adapt to a digital mind set or invest adequately in new skills, some bosses may start to see a shift in power, with questions raised over their ability to lead effectively. Employees may also simply choose to move on to pastures new under more innovative leadership. We believe it will be those senior leaders who adopt a culture of lifelong digital learning who will thrive in the digital age, boosting their bottom line as well as staff loyalty, engagement and retention.”

Malcolm Sweeting, Pro-Chancellor at The Open University added:

“Throughout The Open University’s history, we have been helping individuals develop their skills in new and innovative ways. With the digital revolution upon us, the time has come for tech skills to come to the fore. Our new Leading in the Digital Age report suggests that for UK organisations to thrive in 2020 and beyond, the digital revolution needs to start in the boardroom. Doing so, will foster a culture of digital skills development, encouraging employees at all levels to embrace the requisite tech skills.

“This report shows that if we invest in our leaders, they in turn will invest in developing their employees– giving their workforce the skills to drive success in the digital age. Ensuring that these skills are passed on throughout an entire organisation will be crucial for leaders looking to guide their teams through radical workplace changes brought about by disruptive technologies and innovations.”