Those who do not learn from history are condemned to repeat it. Clichéd as this may sound, this truism has been validated time and again throughout the course of history with chilling ruthlessness. Consider this: the average tenure of S&P 500 companies is less than 20 years, and it is getting shorter -80 percent of the Fortune 500 list from 1970 had been replaced 50 years later. Why?
Among many of the reasons is their inability to learn from history and adapt to the changing times. Kodak’s inability to move away from its photo-film business or Nokia’s miscalculation of its entry into the smartphone business are just two examples of what the game-changing technological shifts can mean for a new-age organisation. And now, one major disruptor is digital, which organisations can choose to ignore at their own peril. Digitalisation is pivoting nearly every business around the world, and in the next 25 years, every nook and corner of the global economy will see an unprecedented impact, India being no exception.
By 2047, India will look much different. Imagine a country that is home to 1.7 billion people with a high demographic dividend, a top-three global economy, a global geopolitical leader with the growing spending power of the Indian consumer. What will also differ is the level of technology adoption by Indian consumers—a 225 percent increase in the number of Internet users, a nearly 100 percent smartphone penetration from today’s roughly 60 percent level. The need for hyper- personalisation for hyper-connected consumers will be like never before. This means organisations that were once product-centric and are now customer-centric will soon need to build digital business models fit for a digital ecosystem spanning all stakeholders, fulfilling an exponential surge in demand along with demand for a different type of fulfilment from the end consumer.
Corporate India of 2047 will be comprised of just two kinds of businesses: those that are digital natives and those that have adopted digital in a big way. And for both, the disruptions will keep coming, so the ability to be agile—to spot the change and pivot quickly—will be crucial. Take Slack for example: this classic digital business that was focused on multiplayer online role-play gaming took heed of the market signals and revolutionised the way that many people communicate at work.
The real challenge now is how the so-called traditional businesses will overcome the unprecedented challenges of the digital wave. For them, adopting digital is a quest for survival. Many are pursuing large-scale efforts to capture the benefits of digital or, in many cases, lead the change. However, about 70 percent of all digital transformations fail to reach their goals.
Our work with a variety of organisations’ digital journeys has uncovered six milestones on the path to using digital and analytics to create a competitive advantage:
Building the “digital organisation”
Traditional organisations have been built like machines: for efficiency, predictability, and steadiness. But the digital age is different: it is evolving in a world that is volatile, uncertain, complex, and ambiguous. Operating in this paradigm means that businesses must be agile enough to understand and even predict their customers’ ever-changing demands. They also need to have adaptive value chains so they can execute on these demands and be ready to experiment. Such organisations are built on three pillars:
Customer-obsessed leadership
An ability to build fast and iteratively to avoid costly failures because of a poor product–market fit
The capacity to scale at pace when success occur,
We call such organisations as “digital organisations”
Creating a whole new company with a “digital organisation” mindset is easier, but how does one do the same in a traditional organisation? Centres of excellence have become the vehicles of choice. Built with the right capabilities and enough “insulation” from the organisation through CEO sponsorship and authority delegations, these mini-organisations have the freedom to experiment, move fast, and fail/ scale. The other option that some global organisations adopt is creating a whole new entity—giving it even the rights to compete with the parent company. (Think of EnelX, the company that Enel created to win in the digital age.)
Holding on to the “business lens”
Many organisations experiment with a lot of proof of concepts (POCs) that involve multiple technologies without understanding the potential value, sometimes also ending up selecting tools that might not actually serve a specific business purpose. Any digital transformation and all elements within it must be value-oriented. In no way is this expected to discourage experimentation, which is an important element for succeeding in digital. Alphabet, Google’s parent company, is constantly experimenting with technologies that are far from its core, such as autonomous vehicles. The lens one should continue to hold is that such experimentation must be aligned with the organisation’s business and long-term strategies.
“Taking action” rather than drafting the perfect strategy
Actions really do speak louder than words. But the opposite seems to characterise failed digital transformations: developing a road map becomes an endless process, or at a more granular level, the business and technical requirements keep changing without any real on-the-ground action. Realising that any strategy built today will be obsolete in two to four years and that any digital initiative will need to be enhanced should create comfort in starting to build with a less-than- perfect strategy. Action will provide the momentum needed to move ahead.
Read More at https://economictimes.indiatimes.com/small-biz/security-tech/technology/digital-transformation-in-an-uncertain-world-6-strategies-to-succeed-and-create-competitive-advantage/articleshow/98467782.cms