It’s virtually impossible to read anything business related today and not run across a call to arms for digital transformation. While there is still significant debate about what is digital transformation, one common denominator is that it represents a major shift in how a company delivers value to its customers, employees, supply chain partners and other key stakeholders.
Most if not all organizations no longer have the capacity to meet the accelerating demand from their customers, employees, supply chain partners and other key stakeholders for faster, friction free ways to engage and connect. From product development to marketing to sales to customer service and IT, teams with limited resources and budgets are stretched to the breaking point to try and keep up with unprecedented increases in demand.
Regardless of what types of products or services you provide, if your employees are not fully engaged across your end-to-end value chain, it is likely your customers are not either. Now here’s the rub…
The unprecedented assault of multiple waves of digital technology disruption from cloud, social, mobile, anything as a service, data analytics, machine learning and smart devices have enabled companies of any size to penetrate some portion of well-established companies’ value chains. To successfully compete in this new competitive paradigm will require companies to come up with a whole new game plan on how to organize, operate and go-to-market as a digital enterprise.
As I wrote in an earlier blog, historically companies believed that owning and controlling assets was the key to creating sustainable competitive advantage and building high barriers to entry into their markets and industries. However, in the new age of digital disruption, companies no longer have the capital, resources and capacity to own and operate all the assets they need to compete against well-constructed and well-orchestrated business partner ecosystems.
The results of KPMG’s 2016 Global CEO study delivered some very compelling evidence of how important it is for companies to leverage business innovation for their competitive advantage.
-66% of CEO’s believe that their business is at an inflection point and the next three years will be more critical than the last 50 years.
-40% of CEOs expect to be running significantly transformed companies within the next four years.
-70% of CEOs said it’s important to specifically include innovation in their business strategies.
-80% of CEOs are concerned that their existing products and services may not be relevant in 3 to 5 years’ time.
-70% of CEOs believe their organizations’ cultures do not encourage risk-taking and safe-to-fail environments.
The Harvard Business Review conducted a five-year study of corporate growth involving 1,850 companies. The study reached two major conclusions:
The most sustained, profitable growth came from companies that pushed the boundaries of their core business into adjacent space.
Companies consistently and profitably outgrew their competitors by expanding those boundaries in predictable and repeatable ways.
