Transforming for the Digital Age

Digital transformation means different things to different people. As I strive to change mindsets, I am sensitive to these distinct perspectives and the individual filters applied to terms like digital and transformation. In my view, Digital has been more narrow than holistic, while in some organizations ERP implementations are considered transformation. So, does digital transformation represent the narrow use of digital technology to improve some aspect of our organization? Or, is it the wholesale change of a set of structures, institutions and paradigms built for a different era? Although I have mostly abandoned the phrase, when I do use it, I mean the latter.

Let’s call it what it is, starting with the term transformation. To truly transform means to change from one nature, substance, form, or condition into another. I’d maintain that the pace of change has made the archaic nature of our industrial era structures, institutions, and management paradigms very apparent. Therefore, to transform in this sense means to change from the nature, form and substance of our industrial past, to a state that is viable for our digital future. Digital is foundational: the building block for which this future state is built upon. Therefore, for clarity sake, a better way to describe digital transformation is:

TRANSFORMATION FOR THE DIGITAL AGE: a change in the nature, substance, and form of our industrial past, to a future state that allows us to thrive in our emerging digital future.

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Emerging Models for the Future

This future series continues with a look at a Deloitte report titled “The hero’s journey through the landscape of the future”. The report focuses on the organizational journey required to re-position for viability in the future landscape. As the landscape simultaneously fragments and consolidates, the authors see these forces and others changing the nature of relationships among businesses. A very good framework for this re-positioning is presented, along with great descriptions of the big shifts that are driving the need. The report sets the stage by identifying the main drivers of this future business landscape:

  • Pressures on companies
  • Pressures on individuals
  • Eroding barriers: Lowered barriers to entry, commercialization, and learning
  • Fragmentation: Staying niche, nimble, and small is the new goal for many
  • Concentration: Emerging scale-and-scope operators will fuel and benefit fragmentation
  • The need for mobilizers to connect and mobilize the ecosystem

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Re-Ranking the Fortune 100

In a recent post, I discussed a book on exponential organizations co-authored by Salim Ismail, Global Ambassador for Singularity University. In a Video from this week’s Exponential Finance conference, Mr. Ismail showcased their work on an Exponential Quotient that scores companies on organizational factors that determine how well they are positioned to succeed in an exponential world. This exponential quotient results from a diagnostic survey that asks 21 questions (each graded 1-4) about how companies have structured their products, services, and internal framework. At the end of the diagnostic, an Exponential Quotient score is determined.

The folks at Singularity University used this quotient to create The ExO Fortune 100 – a re-ranking of the current Fortune 100. The scoring was ratified by academic researchers at Hult Business School. I’ve re-printed a list from their site that shows some of the elements of the survey and the key attributes of ExOs that are being tested.

External facing questions

  • Does it have a Massive, Transformative Purpose, (or MTP)?
  • How externalized are business functions?
  • How much are on-demand staff and on-demand assets utilized?
  • How well are Community and Crowd leveraged?
  • Are algorithms a core part of the organization?
  • How information based are its products and services?

Internal facing questions

  • How well are interfaces created to manage external scalability?
  • Are OKRs and Lean Metrics used to track performance?
  • How well does the organization encourage risk-taking and experimentation?
  • Does the organization operate top-down, command and control hierarchies, or flat, autonomous, collaborative team structures?
  • How well are social technologies integrated into the organization?

Here is a snapshot of the re-ranked Fortune 100:

ExO Ranking

As I said in my post on exponential organizations, there remains a single constant: it will take a different type of organization – different than the ones most of us grew up with – to survive the coming shift. The attributes or characteristics that create this different type of organization are getting clearer. It’s up to us to create it.

For a full list of the Fortune 100 and their associated ExO rank, please download this Spreadsheet

Exponential and Combinatorial

Futurist Gerd Leonhard continues to talk about exponential progression and its impact on the world. In this recent short video, Gerd uses the Exponential and Combinatorial slide that anchors the organization evolution story. Listen to Gerd’s perspective on this emerging paradigm shift.