“We are living in an age of big data, but most of the existing data is useless,” said Dominic Barton, chairman of McKinsey & Co., during his lecture at a forum hosted by Seoul School of Integrated Sciences & Technologies, or aSSIST, last week.
|McKinsey & Co. chairman Dominic Barton speaks at a forum in Seoul last week. (aSSIST)|
Barton, who took office as chairman of the global consulting firm in 2009, served as the chief of former President Lee Myung-bak’s international advisory council in 2008 and the head of McKinsey’s Seoul office from 2000 to 2004.
The key for companies to survive in what has turned into digital disruption is to harness data and use it for maintenance and to understand customers, he said.
“Smartphones have more power than ever and are as fast as the fastest computers used to be 10 years ago, 100 hours of video are being uploaded on YouTube every minute and 35 percent of photographs taken are being posted on Facebook,” he said. “But how much use are we making of all this data?”
Amid the fast-changing business environment, companies need to recognize the crucial importance of using big data to maximize efficiency across sectors and throughout their value chain, he explained.
“Technology is advancing three to five times faster than management, which is a reality that business chiefs need to face,” he said.
This is why an executive-level official specializing in digital management is necessary, he stressed.
“The concept of chief digital officer, or CDO, was first recognized back in 1962 but has become all the more significant over the recent years,” the chairman said.
“Nowadays, they are needed not only in advanced fields such as information technology but also in conventional business categories such as retail, manufacturing, agriculture, and mining.”
Regardless of the type of business, wealth creation is now more dependent on data and innovation, rather than manpower and productivity, according to the senior consultant.
“Such change of trend will lead to the most historic period ever, but this also means that the resulting volatility will be immense, as the key business values have shifted from tangible to intangible assets,” Barton also said.
The McKinsey chairman also urged companies to expand their innovation engine and to pursue disruptive new opportunities, even at the price of cannibalizing their existing businesses.
“Companies have to build agility into their business process and supply chain in order to adapt to the e-volatile environment,” he said.
“They are also required to devise a new portfolio, reallocating money to emerging markets and diversifying their talent base.”
In this sense, Korean and Chinese companies are displaying a positive example to the rest of the world, he added.
“Most of the visible changes so far this century have taken place in Asia,” he said.
“Korea, especially, has a sense of ambition and a strong will to move forward, no matter what others say.”
The chairman thus referred to Korea’s top steelmaker POSCO, of which he has a photograph hung in his main office.
“Back in the 1960s, the World Bank asserted that war-stricken Korea had no power to build a steel industry,” he said.
“Even if McKinsey were here, we would have said so too, but POSCO made the dream come true, and this is the kind of ambition which I cherish.”
In a world of big opportunities and big risks, however, business leaders now need to take a new leap and move beyond their current frame, he also said.
“The change of the world’s business situation is a positive sign for Korea, which is one of the leading providers of digital technology and infrastructure construction,” Barton said.
Despite its technical initiative, Korea has yet to improve its financial structure and education system in order to gain momentum once again, he said.
“The 21st century will be wonderful, assuming we get through the first 30 years.”
By Bae Hyun-jung (firstname.lastname@example.org)