Talk to anyone working today whether in a startup or a well-established Fortune 500 company, and they will tell you the same thing – “I’m working so hard but there aren’t enough hours in the day for me to do my job.” It’s not just that they are spending more hours working, but it’s also that…
It’s hard to argue that the speed and diversity of disruptive digital technologies doesn’t present a potential existential threat to companies of all sizes across all industries. While many organizations are still struggling to come to grips with this new competitive reality, many other are rushing off in multiple directions with multiple initiatives trying to get ahead of them or fend them off.
Almost every C-level executive I speak with tells me they are so busy doing their business that they have no time to think about their business. Whether it’s the back-to-back to back meeting calendars or the explosion of digital communication tools from e-mail to texting to Twitter, executives at all levels are completely overwhelmed by the demands on their time and their schedules.
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.
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.
In the age of digital disruption, traditional ways of creating sustainable competitive advantage are no longer effective. The adoption of the new suite of digital technologies including social, mobile, cloud, data analytics is the new competitive imperative for success. Simply put, if you don’t significantly improve your organization’s digital acumen your competitive viability is at risk.
Most companies are lagging in adopting digital technologies
This year’s Harvey Nash/KPMG Survey of 4500 technology leaders found that only 18 percent said their company was effectively using digital technologies to advance their business strategy.
The 2017 New Rules for the Digital Age report from Deloitte found that only 5 percent of the companies surveyed said they have strong digital leadership development programs and 65 percent said that had no significant programs to drive digital leadership skills.
The chart below highlights the breadth, scope and impact of these new disruptive digital technologies:
Bridge the digital technology gap
In order to improve your organization’s digital acumen, you have to get very good a leveraging digital technologies’ to:
Identify what you need to learn to become a digital technology savvy organization
Many companies today don’t have any formal process or initiative in place to expand their knowledge and understanding of the competitive impact digital technologies can have on their businesses. As such, they are often caught off-guard by these disruptive changes and find themselves scrambling for survival.
Here are some ideas to consider to avoid this situation:
Build a digital acumen roadmap
Most successful transformational journeys start with a concise well documented roadmap that highlights the desired outcomes and a timeline for critical deliverables. I think the core framing questions for this digital transformation roadmap are:
Assemble a cross-functional digital transformation team
Once you’ve agreed to the digital strategy, you can then put together a dedicated cross-functional team to develop the roadmap and implementation plan. Unlike most planning exercises, this work cannot be done within vertical functional silos but rather must draw upon a diverse set of skills from across the entire organization. A study conducted by MIT and Deloitte found that 70% of digitally mature companies are organized around cross-functional teams versus just 28% for companies in the early stages of digital development.
To be clear, this work is not about improving the last best version of your old business model, it’s about creating the first best version of your new business model.
The good news is that you don’t have to do everything at once. You can and should identify specific parts of your business that present the best opportunities to conduct a series of pilot experiments where you can learn fast and make changes based on actual customer actions.
Here are some questions to start that process:
Clearly a transformative change of this scope and magnitude is not undertaken lightly and requires:
I have had the opportunity to work with several CIOs and their C-Suite colleagues on this issue and seen first-hand the benefits increasing digital acumen can bring to any organization. As such, if you are thinking about tackling these issues within your company, please reach out to me as I would be happy to share the approach we’ve taken and the results we’ve achieved.
As always, I am interested in your comments, feedback and perspectives on the ideas put forth in this blog. Please e-mail them to me at pdmoore@woellc.com.
