If you’re not convinced yet that there is a case for change and case for digital transformation, then read on.
Acceleration in digital
A favourite quote is,
“The world will never be this slow again”.
It is clear to everybody that business challenges are accelerating. Countless industries were experiencing massive disruption even before the pandemic struck. You only have to consider how many areas in our personal lives have become increasingly digitally-enabled – the way we shop, bank, consume media and communicate, to name a few – and the same is happening in the business world.
Corporate jeopardy has been accelerating due to increasing economic volatility and digital disruption. You can see evidence of this in the fortunes and valuations of organisation’s in both the S&P 500 and the FTSE 100.
Since 2000 over 40% of the companies have dropped out of the indexes because they’ve underperformed, failed, or been acquired. Startlingly, even before the pandemic, McKinsey predicted that 75% of today’s S&P 500 wouldn’t be here in 2027.
The challenge is: how do you become the one that is driving change? How do you move from being a disrupted company to a disruptive company or an agile, fast follower?
Customer experience (CX) expectations have increased. As people have a good experience in one aspect of their life, they expect a similar frictionless experience everywhere.
The impact of COVID-19 on customer behaviour was immediate and widespread across all industries. Covid further increased the necessity of people using digital to self-serve or resolve their problem quickly.
You only have to consider the online giant Amazon whom were perfectly poised to take advantage of the online world – we were forced to turn to them. They saw a boost in revenue of 35% in the first three quarters of 2020 (Forbes, 2021) and in Q3 of 2020, they also announced an increase in 37% of net sales, hitting $96.1 billion in revenue (Amazon, 2020). In a follow up article, we will share some inside insights into Amazon’s culture of innovation which allows them to trailblaze.
The bar that has been set will continue to rise and other businesses increasingly deliver customer experiences that exploit emerging technologies like AI/ML, IoT, blockchain, autonomous things and AR/VR.
This growing pace of change drives a real sense of urgency for business leaders and makes them wary of making long-term plans and commitments. There has to be a better approach to transformation than a long-term transformation programme.
With risk, there is always opportunity.
Focused digital disruptors are changing the game on very established businesses and brands who thought that scale would protect their competitive advantage.
Some company’s fortunes have plummeted, but others have really soared amid all this change.
With risk, there has been opportunity. So, what can we learn from companies that are responding well to change or even driving it?
Here are some thoughts to consider:
- The world hasn’t really slowed down, even though it may seem to have compared to the last year. In the coming months, we will see many companies believing the danger is over and it’s safe to return to their usual run-the-business mentality. A few, however, have recognised they have developed their change-the-business capabilities and can transform.
- To understand the opportunity and the risk, it is important to talk about how modern digital, agile organisations have new work cultures and have built transformation as a competency.
- These companies have typically organised into small, empowered business and technology teams embedded in the business functions themselves or work cross-functionally to solve problems close to the internal or external customers.
- They are prepared to fail fast and iterate. Fast prototyping is not a new concept, but with the right level of executive alignment and sponsorship, it can be highly successful in my experience.
- Executive sponsorship and alignment are critical to creating the right culture for these teams to solve problems, innovate at a pace, and be recognised.
Transformation as a competence is a combination of culture, people, and ways of working with easy access to technology.
In the next article, let’s cover building that competency and sharing insights on Amazon’s culture and ways of working.
- Investment in Digital Transformation will increase in 2023 - March 1, 2023
- Leading a cultural change to support transformation - November 25, 2022
- Myth busting – innovation is too financially risky - September 13, 2022