Article: Agility in the face of change: How CXOs can harness innovation to maintain a competitive edge

Leadership Development

By Samriddhi SrivastavaNov, 08 2024 @10:30am IST

The global pandemic, geopolitical instability, technological revolutions, and the intensifying impacts of climate change continue to disrupt organisations, consumers, and citizens worldwide. We find ourselves in an era of uncertainty and volatility, with no clear end to the disruption in sight.

Relying solely on traditional strategies will not suffice in this environment. Effectively managing today’s performance while preparing for the future presents a significant challenge. Yet, it is precisely this balance that is required to mitigate risks and uncover the opportunities that lie within these disruptions.

So, how are businesses and the CXOs leading them responding to these challenges? What decisions are they making, and how do they view the present and future business landscape?

At the recent People Matters TechHR Pulse Philippines, industry leaders and experts came together to discuss how businesses can maintain a competitive edge amidst rapid technological advancements and shifting market dynamics. During a Fireside Chat with JC Principe, CEO and President of Cloud Master Technology Corp, and Cheryll Ruth L. Agsaoay, Senior Vice President and HR Group Head at SM Supermalls, they shared their insights on navigating these challenges and harnessing digital transformation to stay ahead in today’s fast-evolving business world.

The conversation focused on the critical role HR plays in adapting to the changing landscape, where technology increasingly drives expectations. As many HR departments continue to rely on traditional policies, the pressure to evolve has never been greater. The session covered essential topics such as talent acquisition and retention, aligning HR strategies with overall business goals, and staying competitive through innovation.

The digital shift: HR’s new reality

JC Principe began by emphasising the importance of HR adapting to the digital world. "As companies go digital, HR needs to shift its focus. Traditional HR policies are no longer enough; the need to hire digital engineers and skilled workers is crucial," JC said. The challenge, he noted, is the difficulty HR leaders face in analysing the necessary skills that will keep their businesses competitive. Without a clear understanding of the skill sets needed, companies risk failure in their digital transformation efforts.

Cheryll Ruth L. Agsaoay echoed this sentiment, pointing out that HR’s role must be customer-centric. "HR leaders must understand the evolving needs of the customers and align those needs with company goals," she explained. This alignment is especially important in industries that rely heavily on customer experience, like retail and real estate.

"Take SM Supermalls, for example. We manage leasing spaces, but we don’t control what restaurants or stores offer. However, our promise to customers is clear: 'You're always welcome here' and 'Everything’s here at SM.' To make this a reality, we focus on curating experiences," Cheryll shared. She explained that talent acquisition and retention are integral to curating those experiences, as the right people are needed to deliver on the promise of customer satisfaction.

Bridging the gap between HR and business needs

One of the most significant takeaways from the session was the need for HR to stay aligned with business objectives. As Cheryll pointed out, understanding customer needs is crucial, but businesses must also balance reinvention with maintaining profitability. "The challenge lies in constantly reinventing while also ensuring the company remains profitable. There’s always a risk of falling behind if you’re not careful," she said.

This is where the role of HR becomes particularly vital. In many organisations, including large corporations like SM Supermalls, aligning HR strategies with business needs requires a strategic approach. "Many companies, especially large ones, focus more on improving core operations and customer service rather than reinventing the entire company. But in sectors like FinTech, healthcare, and media, reinvention is not just an option; it’s a necessity," JC noted.

He explained that creating a culture of innovation is key to staying competitive. "You need to assess your systems regularly. Are you still relying on legacy technology, or are you continuously reinvesting in technology, upskilling, and reskilling your teams to stay ahead of market trends?" he asked. Innovation is not just about having a strong product or service offering; it’s about continuously evolving to meet the ever-changing needs of both customers and employees.

The role of leadership in driving change

As both JC and Cheryll emphasised, leadership plays a fundamental role in driving change and fostering a culture of innovation. "In any transformation process, leadership must lead the charge," Cheryll stated. She explained that investing in training, upskilling, and reskilling employees is crucial to equipping them for the demands of the digital age.

JC highlighted that a culture of innovation is not solely driven by the C-suite. "It’s important to involve stakeholders at all levels, including the board. You can’t rely solely on budget constraints as an excuse. If you can present a solid business case for your idea, the budget will follow," he said. The conversation then shifted to the practical steps organizations can take to ensure their innovation strategies align with business needs.

"For instance, SM Supermalls is undergoing a redevelopment project at one of its major malls. The project, which will cost billions, is part of a long-term strategy to stay relevant. However, during the redevelopment process, management must ensure that other malls cover the shortfall in revenue. Balancing innovation with business continuity is critical," Cheryll noted. She explained that companies need to carefully assess where to invest—whether in the complete reinvention of the business or in the improvement of existing processes.

Innovation and reinvention: The need for constant adaptation

Both leaders agreed that innovation and reinvention vary by industry. While established companies may focus on improving customer service and adapting to market trends, industries like FinTech demand more frequent reinvention to maintain competitiveness. "In my company, we constantly invest in innovation to meet customer demands. If we don’t reinvent ourselves, competitors will take our market share," JC stated.

Cheryll added that in retail, the debate over whether e-commerce will replace physical stores is ongoing. "We’re addressing this challenge by creating a digital platform for our malls, while still maintaining the physical experience that our customers love. It’s about finding the right balance between digital and traditional business models," she said.

However, reinvention doesn’t always require radical change. Incremental improvements to existing processes can make a significant impact. JC shared his perspective on the importance of adaptability: "It’s about asking the right questions: Do you need to reinvent your entire company, or can you improve existing offerings to stay relevant?"

The discussion also touched on how disruption often comes from competition or consumer preferences. For example, the rise of generative AI or the growing demand for e-commerce convenience requires businesses to rethink their strategies. As Cheryll noted, HR and leadership must be proactive in responding to such disruptions, especially as younger generations like Gen Z prioritize digital solutions and flexible work models.

The role of HR in digital transformation

As the conversation progressed, it became clear that HR plays a pivotal role in driving digital transformation within organisations. "HR must not only react to change but actively lead it. For example, with the rise of generative AI, HR should define how AI can be used to benefit both employees and the business," Cheryll stated. She emphasied that HR leaders need to understand employee needs and align them with broader business goals to stay competitive.

Both speakers agreed that HR needs to be data-driven and strategic in its approach. "Technology, like AI, can help HR make more informed decisions. It’s not just about hiring the right people; it’s about using data to drive decisions on promotions, rewards, and talent management," JC said. He added that AI is not about replacing jobs but enhancing HR’s ability to make better, more efficient decisions based on data.

Cheryll echoed this sentiment, highlighting the importance of fostering a culture of innovation through HR. "HR needs to create a culture where innovation thrives, and this requires the right balance of soft skills and a passion for technology. The future of HR is about using data to make better decisions and creating an environment that drives innovation," she stated.

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The takeaways: Building a future-proof HR strategy

As the session came to a close, several key themes emerged. The need for HR to be proactive, data-driven, and strategic was a central message. As both JC and Cheryll emphasised, the role of HR has evolved from a purely operational function to a strategic partner in driving business success.

HR must understand and embrace digital tools like AI to make informed decisions and stay competitive. At the same time, HR leaders must align talent management strategies with business goals, ensuring that the right skills are in place to drive innovation. Companies must focus on creating a culture that fosters innovation and continuous improvement, as this will be the key to staying ahead of the competition.

Ultimately, innovation and reinvention are not just about adopting new technologies or processes; they are about staying relevant in a constantly changing world. As Cheryll noted, "You need to create a culture of innovation so that changes can be quickly deployed. The future of work is here, and it’s up to HR leaders to shape that future."

As businesses continue to navigate the digital age, it’s clear that HR will play a critical role in shaping the future of work. The key takeaway from this session is that to outsmart the competition, companies must invest in both their people and technology—fostering a culture of innovation that is driven by data, customer needs, and strategic alignment with business goals.