Half of the fortune 500 have gone out of business, merged or been acquired since the year 2000 While this statistic is certainly buoyed with casualties from the financial sector post 2008, the drivers of change around digital are real, accelerating unabated, and demand respect and attention.
Continuing with sunny statistics, by 2020 it is believed that 40% of incumbent companies will be displaced by digital disruption. The question is, in the next 4 years, which side of those odds will your business be on? Digital Transformation is on everybody’s list as something to plan for; the laggards risk dissolving into insignificance. As a means to sustained growth, we at Atmosphere believe that leaders must seek innovation as a product of digital transformation.
Defining Digital Transformation
In many ways, Digital Transformation is an evolution of change management, however this time with a broader and more impactful remit beyond that of IT. As digital behaviours have pervaded all walks of personal and work life, so too must Digital Transformation projects aim to positively impact collaboration, innovation, technology, efficiency, and ultimately culture. Beyond all the end user (be it customer or employee) stands to benefit.
In a world of democratised and instant communication, pervasive connectivity, and an increased propensity to share, the rewards for propositions that delight customers are huge, while the action to damage the propositions that don’t deliver as promised is swift and damaging. The spectacular adoption of Pokemon Go is a perfect case study for the potential impact from viral adoption.
This is not shareholder value primacy; ironically it is guaranteeing shareholder value into the future through increased relevance and always, always a focus on customer centricity.
An IT remit this most certainly no longer is.
Innovation as a product of digital transformation
With digital disruption threatening the incumbents, which are typically constructed in ways that restrict or curb creativity and variation from the mean, the response has largely been a land grab through innovation investments; the on campus start-up incubator. While this is a valid approach to capture value and new ideas entering the market, it is short-term and akin to buying a new skateboard to fit in when hanging out at the skate park (don’t forget your helmet and safety gear).
Digital Transformation restates the way that internal talent can expect to engage with the mission of the business, how they interact, the meaningful collisions across existing silo’d talent and corporate knowledge, and the expected cycles related to understanding customer needs and deploying products and services to serve those needs.
Naturally, when an organisation has unlocked new digitally enabled ways of working and understands richer ways of connecting with audiences, a positive externality of Digital Transformation is innovation.
Innovation that comes from within is genuine and lasting, is more likely connected to the purpose of the organisation and supports the retention of corporate knowledge. Best of all, when you are prime for disruption, best that it happens from within; this way at least you can gain advance notice.