Reinventing and digitising a company’s processes and workforce can be a daunting task for even the most seasoned business owner or executive. But for over 30 years, the Obeikan Investment Group has emerged as a major industrial group that provides increasingly sophisticated and specialised solutions for its customers while maintaining a cutting-edge workforce. Today the Saudi Arabian company’s offerings in industries such as packing and education is supported by a staff that has been completely transformed by a digital environment that fosters discipline, accountability, and growth.
In this interview, Obeikan Investment Group CEO and second generation family business member Abdallah Obeikan tells the story of the company’s journey through digitisation.
When did you realise the need to digitalise your company?
Our company is an industrial group. We feel a number of price pressure points that always have to be managed, from suppliers, customers, and increasing operating costs. As such, we need to earn our margin from increased productivity because we cannot simply boost the prices of our products, nor can we always control the cost of things like labour, energy, or regional business conditions.
Because of the pressures from the market, there needs to be discipline in the organisation to search for and embrace emerging technologies for its business solutions. Digital is such a solution.
What were the first steps you took in that direction? How did the other owners of the business react to your ambitions?
Digitisation is a journey; there is no one solution or one definite direction that you must take in order to digitise. This is because there are different levels and methods of digitisation, from managing records to monitoring energy levels, as well as integrating your workforce. And it is certainly not something that can be done overnight because every stage of the journey requires unique tools, capabilities, and skills.
In regards to getting everyone on board, it begins with communication. The problem is that some businesspeople see digitisation as a fancy tool and not a competitive advantage. As such, there needs to be a strategic objective and a clear line of communication to enforce the change. Explain how the company will become productive as a result of digitisation so that employees can be effective within the new paradigm and create a culture of discipline.
Communication can take place through meetings, training, induction, and a variety of different tools. If you agree on a strategic objective that drives us, it’s simply a matter of making the push.
What was the greatest challenge when you started implementing those changes?
I think that when we began rolling out the digitisation process, people were surprised at the size of the opportunity to improve the organisation. But the problem came down to discipline. Discipline means doing things routinely and in a precise and consistent manner. As you know, our region is known for its flexible creators but we sometimes lack discipline. To address this, we began implementing technology at every step of the way by managing the tasks digitally – scheduling reminders, calculating and laying out various responsibilities, creating objectives and accountability. The great thing about digitising workflows is that it causes everyone to be disciplined because you don’t really have a choice. If you don’t do your job, someone will know. If you forget a task, a reminder is triggered and someone is there to alert you. This ultimately creates an environment of accountability and discipline, which is ultimately helpful in implementing the strategies.
How did your workforce respond when you started your digital vision?
Digitalisation is a culture and mindset; it is a way of thinking that gives you perspective on how you see your customer and your operation. If you succeed internally you can extend your value to others.
The thing about people is that they are quick to understand but slow to adapt. But this just means that the management and leadership must be consistent in the messaging until the workforce gets the message that the organization is committed to the cause. In our case we systematically explained what is in it for them when we roll out the digitisation efforts. For them, its simple – they become smarter, they can contribute greater, and become more engaged in the game. This is what makes them happy and this can also create more value for them in regards to their respective careers. When rolling out new initiatives, it is very important for business owners to understand that there must be clarity in regards to what’s in it for the workforce and also what’s in it for the company. You need to create balance between the advantage for the employees and benefits for the company for a successful transition.
Of course, when we change the capability we have and our productivity levels change, we reduce some of the jobs and some people become redundant. But as we implement the journey of cultural transformation that moves the organisation away from the traditional methods to a digital environment, we ultimately see that the workforce as a whole benefits.
Have you changed your Human Capital strategies to adapt to your new digital vision?
Of course we did; human capital must align and calibrate alongside any change in strategy. For example, the very positions that we look to fill evolve and directly correlate with the newly found digital needs; our recent hires include roles in Business Intelligence application, data mining, data scientists, app builders, and so on.
Our human capital culture has also seen a shift in management. We capture all the intellectual capabilities and intellectual capacity and plug them into our digital environment so that we face no risk when we lose certain team members. Anybody can come or go, and find themselves with easy starting points without being solely reliant on individual knowledge or experience. Our processes, workflows, and complexities of the organization are put together in what is essentially a black box, which allows for continual improvement of our digital environment to be sustainable, integrated, and effective regardless of the changes in team.
If digitalisation is so urgent, why aren’t we seeing more businesses following your example? What is the greatest barrier in your opinion?
The Fourth Industrial Revolution is a major change in our lives and yet, in many ways, its emerging around us without us feeling and seeing it in a tangible sense. This is the challenge that must be overcome; to convince your team, your peers, and even yourself to see the need to adapt.
This is a choice, this is an understanding. For some people, they look at the foundations of their business and think that because they cannot see the applications of the new change day in and day out, it is not something to take seriously. But it is important to take it seriously and examine the capability for change that digitisation can have in every aspect of your workforce. Businesses have a choice; they will either develop a progressive attitude as a result of that introspection or respond with resistance and say “We are happy with the way things are, why do we need to change?” Because they are in a comfortable position and they don’t have the catalyst or even crisis that forces them to change, or because they don’t have a leader who is gifted enough to see the opportunity, the company will lose out on the many positives that can be found when they go down this path.
How do you assess if a company is ready to be digitised?
I believe that every company is ready to digitise right this moment. If you don’t start, you might miss the train. As I mentioned earlier, the problem with digitalisation is that is sneaking up all around you, often growing without you noticing it until it is too late.
Digitalisation not about technical ability or technology alone, but about what businesses need in this day and age to succeed. Business models are changing and creating new value propositions and it is important for business owners to focus on that aspect instead of being intimidated by the technological terms. Leave the technology to the technical people; they help you execute the strategy that you formulate. This is not a single action, but rather this is a journey in which you learn, improve, and adapt to the fast-changing environment. If you simply believe that digitization is an equipment or system for you to just purchase, you are on the wrong path.