MICHAEL JORDAAN: Getting it right for a mobile-first world

The march towards a digital society is inexorable, as most acknowledge. What’s perhaps less well recognised is that the primary gateway between the digital or virtual environment and the real world is the mobile device: the smartphone or tablet. These devices are now so widely used that the two worlds often seem indistinguishable, as anyone who makes an unwise tweet soon discovers. 

Even here at the foot of Africa, the old feature phones are on the way out. The figures vary: in 2020 the Independent Communications Authority of SA (Icasa) reported that SA’s smartphone penetration had reached 91.2% in 2019, while other figures are more in the 80% range. Whatever the exact figures, the trend is unmistakable. 

The move to an economy in which the smartphone is the means by which transactions — whether with clients, internally or with business partners — occur has huge implications for business. At the most fundamental level it is an opportunity to create a completely new business model, one that will set blue water between yourself and your competitors. 

One of the great missed opportunities of the past two or three decades has been how the vast majority of businesses responded to the emergence of the internet and the concept of e-commerce. For most it was simply a question of replicating what they had in the real world in the virtual realm. 

A possibly apocryphal story is that when Amazon opened for business its back office was still largely manual, as was its fulfilment. Huge bottlenecks ensued as paper invoices and picking sheets were printed and rushed between offices, and one enduring tech legend has it that the great Jeff Bezos himself turned up to do his bit by packing up books into cardboard boxes. Be that as it may, Bezos and co quickly learnt the lesson, and Amazon became the poster child for a totally new kind of business, reinvented from the ground up. 

Estonia offers a similar example at a national level. On gaining independence from the Soviet Union it set out to catch up with the West by going beyond tweaking the creaking Soviet bureaucracy and infrastructure. Instead it built new technology from scratch to create a new way of running a society. The result? Significant efficiencies and a far more citizen-centred operation where everything takes far less time and is mostly done conveniently online. 

Opportunity

The big point here is that the move to a mobile-first world has to be seen as an opportunity — rather, an imperative — to rethink the business from first principles. With all due modesty, that’s the approach that we followed when creating Bank Zero. We did not set out to do what established banks do better or faster using technology, we tried to reimagine how banking could better do what its customers wanted. 

Looking back, a few principles emerged, which could be useful to other companies who see the imperative and want to seize the opportunity. Julie Andrews wasn’t wrong: one needs to start with first principles. This means putting aside your loyalty to the way you do things, and what your customer offering is, and listening to what your customers want. Every company says it is customer-centric, but in reality what they do is work out how to present what they do in a way that approximates what customers want — not quite the same thing. 

Starting with a blank sheet is easy for a start-up because it has no legacy processes or products; it’s correspondingly difficult for existing companies with complex legacies embedded in their people and systems. But there’s no getting round it; build your mobile-first operation from the ground up as if you have no legacy, and avoid innovation for its own sake — the litmus test is what customers actually want. To find this out is no easy task, but you have to find a way. 

So listening and then deep thinking come first, and then only do you start building the systems. Incumbents are not inevitably at a disadvantage — they have resources and a powerful brand behind them. It’s a race to see who gets there first, the innovative start-up or the behemoth with the courage to rethink. The example of Checkers is one to ponder — its Sixty60 app has converted this former Woolworths fan because it offers me the shopping experience I want, something it has pulled off alongside its existing business. 

Old-style approaches you can jettison include listening to the “experts” (stick to customers), checking out what your competitors are doing, and the splashy market launch and advertising. It’s a rather more frugal process, just a relentless focus on fixing the bugs and getting it right. Word of mouth will do the rest. 

Another big advantage of beginning from scratch is that one can use the most modern technologies, whereas for incumbents the temptation is always to “sweat the assets”. Nothing could be more fatal. 

Getting it right should be another mantra. The new value proposition can’t be incrementally better, it must be better by a large margin. If not, you won’t change behaviour. 

Ice-hockey star Wayne Gretzky summed up the secret of his success thus: “I skate to where the puck is going, not where it’s been.” The future is mobile — are you there yet? 

• Jordaan chairs Bank Zero.