Next up in this transformations series is the fourth enabler: next generation experiences. As we are now deep into this transformation series, some of the drivers and tactics are similar across the various enablers, so you will start to see some redundancy across posts. The issues of customer experience, customer-centricity, and customer intimacy are top-of-mind and dominate many executive discussions and conference agendas. According to Forrester, only 3% of companies manage to succeed at delivering an excellent customer experience, but 60% intend to use customer experience as a strategic differentiator. Driven by the rapid commoditization of products and services, the speed at which new market entrants emerge, and the rise of consumerization, experience is now the new battle ground – and sustainable competitive advantage is the prize. But as Forrester concludes in their book Outside-in, customer experience remains the most misunderstood element of corporate strategy today.
Category: Our Emerging Future
All aspects of our emerging future
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A Closer Look at Transformation: Value Ecosystems
The next focus of this transformation series shifts to the emergence of value ecosystems and their role in driving the Enterprise of 2020. As we look at the Apple ecosystem and offerings like the connected car, mobile commerce, energy efficiency, electric cars, eHealthcare, and energy performance contracts, we can see the lines between industries blurring. Some even question the relevance of Industry constructs in the future. As this phenomenon accelerates, more and more companies must identify the relevant ecosystem(s) that enable their growth strategies. These value ecosystems are complex and relationship-oriented, representing future growth opportunities that are increasingly outside a company’s traditional business.
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A Closer Look at Transformation: Edge-Driven Design
Next up in this transformation series is edge-driven design, the second enabler. This key enabler is growing in importance as developed economies are moving away from command and control models and towards edge interaction that is value-based. The design principles of our past where the core (Systems of record) drove design and the edge adapted do not support this shift. This future state requires the edge to drive design from the outside-in and a core that is adaptive. This reversal in design principles supports two future dynamics: 1) Value is increasingly created by an ability to connect capabilities across organizations within an ecosystem of services, and 2) The shift from a transactional paradigm to an experiential one. An edge-driven design addresses both of these dynamics and begins to instill a fast, iterative and responsive culture.
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A Closer Look at Transformation: Digital DNA
This closer look at transformation continues with part five focused on Digital DNA; the sixth forcing function. My perspective on Digital DNA is based on a view of the business environment that is likely to exist in 2020. Enterprise DNA must reflect those characteristics that enable success in the digital world likely to exist in seven years. Business speed in the next decade and the rapid rate of change makes Digital DNA critical to future success. Today, Internet companies like Facebook, Twitter, Amazon, Apple, Google and others have fairly high Digital DNA quotients. Start-ups are born with much more Digital DNA than traditional companies, and the rate and ease at which start-ups are entering the market will continue to create a competitive environment where traditional companies are disadvantaged. Since most companies are traditional companies, the majority will enter business transformation from a challenging legacy position.
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A Closer Look at Transformation: Growth
2014 will see an acceleration and expansion of transformation programs. All the dynamics are in place to create a compelling reason for companies to transform. This 14 part series takes a closer look at transformation and the likely path it takes in the next decade. This is the first piece in the series. Links to the other parts of the series are included at the end of this post.
In my last Post , I focused on three recent thought leadership pieces:
- Middle class job Creation – Geoffrey Moore
- Disruptive Technologies – Mckinsey
- New Machine Age – Andrew McAfee
These pieces continue to describe the transformative period that lies ahead. As we look at this and other thought provoking pieces, our job as leaders is to assess the potential impact to our organizations. Readers of my Blog know that I have focused my own assessment on the enterprise of 2020, or what I have been calling the Digital Enterprise. So I have worked to develop a high level road map based on my own perspective and experiences, ongoing executive dialog, and key pieces of market thought leadership. I will use the next several Blog posts to summarize my thinking. The road map is focused in two key areas: The forcing functions that drive the need to transform and the enablers that require investment to get us there. Forcing functions are those things that force the enterprise to invest in a future state. The forcing functions and a vision to address them are critical, as far too many leaders continue to sit on the sidelines with no impetus to invest in this future enterprise.
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The New Machine Age
I recently participated in a panel discussion at an MIT CIO Symposium and had the pleasure of hearing Andrew McAfee talk about the book he co-authored with Erik Brynjolfsson titled Race against the Machine. Mr. McAfee has talked at length about the digital revolution and its impact on the workforce. He talked about the dawn of a new machine age, where the focus is on idea production versus physical production, and knowledge work versus manual labor. He focused on the most impactful period in human history – the advent of the steam engine that ushered in the first industrial revolution. A lengthy period that followed the first machine age was transformative and disruptive. We are on the verge of something that history may someday view as more transformative and disruptive. A quote from Mr. McAfee summed up his thoughts:
“Digital will make a mockery of everything that came before it”.
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Geoffrey Moore: Middle Class Job Creation in the Digital Era
Geoffrey Moore recently authored a Report focusing on middle class job creation in the Digital Era. These same forces that Mr. Moore describes in the context of job creation are disrupting the very fabric of the traditional company. This is a fascinating look at the state of middle class jobs in developed countries. This diagram from the report effectively summarizes his views on the topic. The grid focuses on the nine basic areas of employment inside an enterprise, across a product and a service business model. The columns are further divided into complex (B2B) and volume (B2C) businesses.
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Digital Enterprise Characteristics
In the past two months, interest in the characteristics of a digital enterprise is accelerating. I believe increasingly, traditional companies understand that viability in the next decade drives the need to evolve. The list of characteristics has been refined through ongoing dialog and now looks like this:
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Digital Enterprise Road Map Series: Part 2 – Experience
In part one of this six part series; I focused on Holistic Strategy – the first step on the digital enterprise journey. In part two, the focus shifts to experience-based differentiation. With the rapid commoditization of products and services, the speed at which new market entrants emerge, and the rise of Consumerization, experience is the new battle ground. When I talk of experience, I mean stakeholder experience. Ultimately, it’s about creating differentiated customer experiences – but to get there, the experience we create for our employees and partners is critical to that end goal.
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The Ultimate Power Duo – The CMO and CIO
The New Jersey CIO Executive Summit produced by Evanta was held on December 5th in Whippany New Jersey. I had the pleasure of moderating the lunchtime keynote – a panel discussion titled “The Ultimate Power Duo – The CMO/CIO Partnership”. Joining me on stage were two CMO-CIO teams:
Hovnanian Enterprises, Inc:
CIO – Nicholas Colisto,
VP Corporate Marketing and Sales – Laura VanVelthoven
Panasonic:
CIO – Gabrielle Wolfson,
VP Marketing – Betty Noonan
Bloggers, Industry analysts, and Surveys are fueling the CMO-CIO partnership discussion and delivering some very bold predictions:
- Fully 60 percent of marketers point to their lack of alignment with the company’s IT department as the biggest obstacle to reaching the consumer
- Gartner says ninety percent of technology spending will be outside of the IT budget by the end of the decade. In contrast, only 20 percent of technology spend was outside of IT as recently as 2000
- In 2013, global technology spending is expected to reach $3.7 trillion, according to Gartner – and IT spending is being spread more widely than ever across the business
- Gartner Research predicts the CMO will spend more on IT than the CIO by 2017
- A recent IBM Survey shows that leading Marketers are extending their role beyond Marketing
Inside the Next Transition 