No Such Thing as Business as Usual in the Age of Digital Transformation

Digital transformation typically begins as low cost POCs (proof of concepts), that evolve into mission critical corporate initiatives as positive results, consumer demands and market trends converge.  Digital transformation becomes mission critical when consumers vote with their money to accept the digital replacements for physical products, services and processes. 

Last month a regional retail book and entertainment chain, Hastings, filed for bankruptcy.  CFO Duane Huesers blamed “a decline in the market for “physical media properties” like music, movies, books, games and media rentals.”  Hastings joins chains like Blockbuster, Borders Group and Tower Records that went out of business as a result of not making the transition to digital fast enough.  The strange part of this story is that Hastings never changed.  Faced with overwhelming evidence, market trend data and their own sales data that showed consumers were moving to Netflix, Amazon and streaming music, they simply could not take the steps to change.

Enterprises must wake-up and transform themselves.  They must jettison the heavy baggage that comes as a result of decades of institutionalized practices and methodologies developed and codified in an analog era - an era operating at a far slower operational tempo designed around the movement of physical objects.  The good news is when enterprises choose to digitally transform, the ROIs (return on investments) are typically compelling.  Nearly 30% of the firms we recenlty surveyed reported an ROI greater than 100%. 

Where do enterprises start with digital transformation?  Modern western militaries have been engaged in digital transformation for several decades now and we can learn a lot from their experiences. Their efforts involved rethinking strategies, tactics, doctrines and changing budget priorities, organizational structures, technologies and more. They recognized the need to change and become faster, agile, efficient and precise by embracing digital to succeed in their missions.  They replaced mass with precision, and a reliance on physical (paper), with connected digital (mobile devices) equipment.  

In the world of real-time precision introduced by mobile devices, IoT and sensors, data takes on a whole new level of importance.  In fact, executives in our survey believe big data and business analytics will have the biggest business impact of all technologies on businesses from years 2020-2025.  The winners in digital transformation will commit to developing in seven key areas at a pace sufficent to provide competitive advantages: 

  1. Becoming a data-centered business
  2. Developing and implementing an OILS (optimized information logistics systems)
  3. Achieving real-time business operational tempos
  4. Implementing intelligent process automation using artificial intelligence and machine learning
  5. Ensuring a shared situational awareness through the use of collaboration platforms
  6. Utilizing real-time contextually relevant data to personalize digital experiences
  7. Redesigning and re-architecting to become a digitally agile business 

Mobile networks and devices are now ubiquitous in most regions of the world.  Low costs mobile phones and service plans proliferate, and these are changing banking, commerce and global communications.  They are even shaping global economies and politics.  All of these activities are generating massive volumes of new data. Information is now available to people anywhere, and at anytime as long as they have connectivity to the Internet.  Information can be searched for, saved in our second brains in the form of cloud storage, and monitored by our third eye, a digital eye that provides perception beyond ordinary sight in the form of alerts, news updates, notifications, tweets, messages etc., 24 hours a day.  There is no such thing as business as usual in the age of digital transformation.

  1. 15 Rules for Winning in Digital Transformation
  2. The End Goal of Digital Transformation
  3. Digital Transformation and the Ignorance Penalty
  4. Surviving the Three Ages of Digital Transformation
  5. From Digital to Hyper-Transformation
  6. Believers, Non-Believers and Digital Transformation
  7. Forces Driving the Digital Transformation Era
  8. Digital Transformation Requires Agility and Energy Measurement
  9. A Doctrine for Digital Transformation is Required
  10. The Advantages of Advantage in Digital Transformation
  11. Digital Transformation and Its Role in Mobility and Competition
  12. Digital Transformation - A Revolution in Precision Through IoT, Analytics and Mobility
  13. Competing in Digital Transformation and Mobility
  14. Ambiguity and Digital Transformation
  15. Digital Transformation and Mobility - Macro-Forces and Timing
  16. Mobile and IoT Technologies are Inside the Curve of Human Time

15 Rules for Winning During the Age of Digital Transformation

Competitors can’t compete, and leaders can’t lead if they don’t know the rules of the game.  Understanding how points are scored, and what is required to win is key to any competition.  In the age of digital transformation these are the key rules to learn:

  1. Data is the modern commercial battlefield
  2. Information dominance is the strategic goal
  3. It takes an “Optimized Information Logistics Systems” (OILS) to compete
  4. Advantages in speed, analytics, operational tempos and information logistics - determine the winners
  5. Real-time operational tempos are required
  6. Businesses that can “analyze data and act and with speed” dominate those which are slower
  7. Advantages lead to more advantages (Ax2).  When you are out front, you see things first and can react faster.
  8. Situational awareness enables innovations and operations at a lower cost and with increased efficiencies
  9. Principal of API Acceleration & Mobility – As demand for mobile apps increases, an even greater demand for new APIs and changes across the business and IT will arise
  10. Mobile apps provide only as much value as the systems behind them
  11. The more data that is collected, analyzed and used, the greater the economic value and innovation opportunities it produces
  12. Data has a shelf life, and the economic value of data diminishes quickly over time
  13. The economic value of information multiplies when combined with context and right time delivery
  14. The size of opponents are less representative of power today, than the quality of their sensor systems, mobile communication links and their ability to use information to their advantage
  15. Ultimately winners will dominate by automating decision-making and executing repetitive work using robotic process automation better and faster than competitors through the implementation of artificial intelligence and machine learning

These rules not only help you understand how to compete and win, but they should also guide enterprises in their development of a digital transformation doctrine. 

In a recent survey we conducted with over 2,000 executives in 18 countries, the majority of all survey participants agreed that developing a clear digital transformation strategy is a top priority.  Digital transformation strategies, however, grow out of, and are shaped and guided by a digital transformation doctrine (DTD).  We define doctrine as a documented way of thinking, a common frame of reference across an organization, which provides an authoritative body of statements on how the business should approach digital transformation.  It provides a common lexicon for use and a framework for developing strategies. The DTD is a necessary first step before digital transformation strategies and tactics can be developed and implemented.

Digital technologies do not just enhance and extend existing processes and models, but they open doors to all kinds of new innovations, opportunities, businesses processes, strategies and even new industries.  An organization’s DTD must be capable of leading them successfully through these massive and accelerating changes.  

An organization’s DTD should influence all of their strategies, how they operate, and the tactics they employee to compete.  In our research, we found most companies recognize digital transformation is happening, but few have a guiding doctrine to lead them on this chaotic journey.  Without a DTD, organizations lack a unified understanding of why they are engaged in digital transformation and the role transformation plays in helping them compete successfully.

Executive teams must define how their organization should think about digital transformation.  The DTD should be obvious in every program, project, campaign, product and service within the company.  A sample of a DTD follows:

The digital transformation of our marketplace is changing the behaviors of our customers and the nature of our competition.  We must anticipate and embrace permanent flux by employing digital technologies and strategies, and by creating a digitally agile business and a digitally transformed enterprise. We will achieve information dominance by investing appropriately to develop and maintain an optimized information logistics system. We will restructure our organizations for business agility, speed and real-time decision-making.  We will develop a culture that encourages collaboration, innovation and creativity.

  1. Digital Transformation and the Ignorance Penalty
  2. Surviving the Three Ages of Digital Transformation
  3. From Digital to Hyper-Transformation
  4. Believers, Non-Believers and Digital Transformation
  5. Forces Driving the Digital Transformation Era
  6. Digital Transformation Requires Agility and Energy Measurement
  7. A Doctrine for Digital Transformation is Required
  8. The Advantages of Advantage in Digital Transformation
  9. Digital Transformation and Its Role in Mobility and Competition
  10. Digital Transformation - A Revolution in Precision Through IoT, Analytics and Mobility
  11. Competing in Digital Transformation and Mobility
  12. Ambiguity and Digital Transformation
  13. Digital Transformation and Mobility - Macro-Forces and Timing
  14. Mobile and IoT Technologies are Inside the Curve of Human Time

 

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I'm In With the Linked-In Crowd

The $26bn acquisition of Linked-In by Microsoft last week is a bit of a digital Rorschach test. To some folks I’ve talked to it’s a visionary master stroke that opens up all sorts of new possibilities in “social selling” and cements the role of email in an increasingly Slacky world. To others, for whom Linked-In is still something of a mystery, it’s a bit of a head-scratcher. And then to some it’s a colossal waste of money. $26bn! For what? A web-site where people put their resume and scratch your back in the hope that you’ll scratch theirs! Man, the sell-side bankers did an outstanding job!!! $26bn for a company on the brink of implosion! http://nyti.ms/25Uawxk. Take a bow, Frank Quattrone.

Personally, I see in the ink-splatter all sorts of upside for Microsoft. Consider this;

Linked-In is the de-facto corporate directory for business nowadays; talking to someone on the phone you don’t know? You’re probably looking at their Linked-In profile as you chat. Even if it’s someone in your own company. Listening to someone talk at a conference? You’re probably checking them out on Linked-In (and Twitter) as they blabber on. Before you head back to SI.com.

  • Linked-In is becoming the de-facto thought leadership platform; why have your own website or blog nowadays? Go where the fish are and put your stuff up on Linked-In. Hey, look! You’re reading this on Linked-In!!!
  • Linked-in is the de-facto way of connecting with people you don’t know but would like to know; sure, you probably still meet folks at the golf club or the Rotary or the gym or the resort bar or the Opera but if you want to get connected with someone nowadays a direct call seems hopelessly crude and old-fashioned. And nobody answers their phone anyway if you call them.
  • Not having a presence on Linked-In marks you out as an eccentric or a dinosaur. Even if you’re not in the market for a new gig, don’t want to buy anything, or don’t want to sell something. And if you’re not in any one of those three categories then what are you doing at work all day?

In short, Linked-In is close to becoming a utility in the 21st century digital economy. When you’ve got $100bn parked in banks around the world collecting 0.5% interest spending some of it (even a quarter of it) to buy your way into the next form of business infrastructure seems Bellicheckian (i.e. a good play). (BTW: if you still don’t care for the deal, tell me, what would you do with all that money???!!!)

And in reality the $26bn isn’t buying today’s Linked-In; it’s buying what Linked-In will become. Three years ago, I wrote this piece outlining how HR processes would look in a world of Code Halos. http://bit.ly/1Myr2VR. Far be it from me to tell you “I told you so”, but I told you so.

Fast forward to mid-2016 and this is how HR, and selling, and working with other people is beginning to change and shift into an always-on, mobile, social, intelligent network based experience. Fast forward to 2020 and this type of experience will be ubiquitous and unremarkable.

Of course for Microsoft the ability to migrate the best elements of Office (no sniggering at the back of the room please) into this, not particularly brave, new world gives the Office franchise a post desktop future and sends a shot across lots of bows; the aforementioned Slack, the new BFFs at Salesforce.com, and the folks down south with a Mountain View. Microsoft will integrate the tools we use to work with the utility we use to connect and collaborate, throw AI based analytics, recommendation engines and best next action platforms into the mix, stir in a little advertising, light the blue touch paper, stand back, and hope the resulting explosion produces commercial propulsion, not reputational disaster.

$26bn to have a shot at being relevant to people who’ve never ever heard of Clippy? http://theatln.tc/1GHTL90. Like.

Like also because it prompted me to go and play this again http://bit.ly/1Fye23P. Really Like.

In a world of weak ties, not club ties, Linked-In is increasingly how the world works. Expect your Microsoft rep to start talking about social graphs and digital assistants and just in time social learning before the quarter’s out.

$26bn? Ok, hardly chump change. But not a chump move.