Digital Disruption and Leading from the Front
Digital technology [mobility, cloud, big data analytics, connectivity, social media] and innovation (“digital”) are disrupting the business model of companies and how its’ leadership must operate both tactically and strategically. Already, digital has disrupted the value chain of several industries and altered the global competitive landscape. How a company and its’ leadership respond to these challenges is significantly impacting its day-to-day survival and its’ strategic future.
Digital has transformed the way you and I experience daily life, conduct business and earn a living. Digital has also radically altered the way customers’ experience, communicate, use products /services and ultimately purchase. The analysis of massive amounts of customer data (“analytics”) assists companies re-imagine their product /service offerings, assess how their customers are using these offerings, as well as, what they need to engage /retain the customers. However, do the customers desire more than what is being offered?
The remarkable ubiquitous and widespread growth of the Internet of Things (“IoT”) is requiring companies to build smarter, more agile, more secure information technology (“IT”) infrastructures and take necessary action to prevent, and prepare for, the damage to company assets that results from cyber-threats and attacks. In addition, the massive amounts of customer data being collected is compelling companies to decide how much data to keep, where, and for how long. Cyber-security risks include legal and regulatory hazards relating to the theft of customer personal /financial data and customer privacy breaches.
The transformation of digital connectivity into the Internet of Everything (“IoE”) is demanding employees adopt new work habits, learn new skills, and adapt to new operating procedures. Moreover, company leadership is being challenged to devise approaches to surmount competitive challenges, manage exposure to emerging risks, overcome a shortage of qualified talent, and compete profitably in industries where the boundaries are daily being redefined. IoE innovations like bitcoin and block chains that safeguard them, are opening up new forms of trusted data sharing as well as permitting distributed computer systems to agree on decentralised data.
Every company has the potential to ensure their business model can withstand the onslaught of new competition in this disruptive environment. What is required? Management needs to adopt a posture that thinks externally, sustains internal innovation, minimizes exposure from risks, and challenges the status quo to reap the growth and profit opportunities presented.
The foremost message for management is that they should always consider the experience that the customer is desiring; and, be the disruptor of their own products /services before competitors or some other enterprise does it first.
Developing a prudent, agile vision of how to compete, necessities leadership prepare themselves to tackle the disruptive challenges. Begin by acknowledging:
Customer are smarter and constantly growing more knowledgeable.
Barriers to entry are lower allowing competition to be global.
Digital insights and technology are creating cyber security issues and require defences that look both outward and inward.
Regulators and taxing authorities are becoming multi-jurisdictional.
Globalization of the value chain requires very little infrastructure.
Organisational success requires aligning culture and conduct.
Employee need to be appointed to businesses who are obsessed with the customer not the process.
To mitigate the risks, leadership must craft a strategy to nurture an agile organisational culture that dares to push the boundaries, while being cognisant of the disruptors that are shifting their business and marketing strategy [competition, distribution, regulation, customer behaviours]. The underlying norms of the business also must be continually challenged by questioning how customer perceive the value of products /services and how growth /profits are being created. Lastly, discerning the desires of the customer and marketplace necessitates open, honest discussions with front-line employees, customers and external advisors.
Even the best designed plans have to be put into action to succeed. Organisational research has shown that a successful business transformation is steered from, and vigorously guided by top management. Through alignment of organisational culture with the business strategy and keeping the organisational culture aligned to that strategy, the obstacles and risks to a successful outcome are substantially mitigated allowing the business grow and thrive.
Implementation requires company leadership shift their planning style to one that is dynamic, learning, sustaining, and focusing on what the customer /market /environment is revealing. Execution has to illuminate which key trends and advances are most impacting the value delivered to the customers /market; how the supply chain is functioning or not; and, what is the contributing role of external partners and the value they create.
New challenges require new insight:
Are you effectively assessing threats from beyond our industry?
How do you avoid the silo or blinders paradigm?
What business intelligence do you seek and can you afford?
Are you assessing, analysing and determining how much risk the business has in not executing flawlessly or in taking too long to implement?
Do you have the right talent in the company as well as clear lines of accountability and responsibility?
There can be no excuse for delay in strengthening your business model and protecting your business from becoming obsolete. Now, more than ever, your business must determine if you are well positioned for growth and performance.
Ask, do you have the information to ‘connect to dots,’ knowledge to minimize risk exposure, and the wisdom to evade ineffectual check-the-box management. Then, shift your competitive approach to lead from the front!