Agility is the capacity to detect, assess, and respond to environmental changes in ways that are purposeful, decisive, and grounded in the will to win
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.
In my last post, I described a Sense and Respond model that sits at the heart of several activities, including scenario, opportunity, and risk analysis. As complexity and pace continue to intensify, uncertainty increases. To survive in this Emerging Future, we must embrace a framework for future thinking, and an organization that can adapt as it shifts. In essence, we must see the future, rehearse it, continuously monitor for shifts, and adapt as the shifts occur. A sense and respond model sits at the core of the framework – but represents the biggest cultural challenge.
“The rhythm of technology is changing the rhythm of business, and we’re all going to need to adapt” – Jeff Gothelf and Josh Seiden, Authors of Sense and Respond
Back in 2013, in a post on sense and respond systems, I talked about the drivers that would push organizations towards a sense and respond paradigm. There are no bigger drivers than volatility and uncertainty, and nearly four years since that post, that fact is becoming clearer. In a recent book by Jeff Gothelf and Josh Seiden, they elevate sense and respond to a position that is core to achieving an adaptive enterprise. They see feedback loops and a movement away from command and control as the enabling mechanisms that allow us to thrive in the digital age.
Management expert Gary Hamel summarizes the challenges we face as the structures of the industrial age collide with the digital age:
“Modern management is one of humanity’s most important inventions. But it was developed more than a century ago to maximize standardization, specialization, hierarchy, control, and shareholder interests. While that model delivered an immense contribution to global prosperity, the values driving our most powerful institutions are fundamentally at odds with those of this age – zero-sum thinking, profit-obsession, power, conformance, control, hierarchy, and obedience don’t stand a chance against community, interdependence, freedom, flexibility, transparency, meritocracy, and self-determination. It’s time to radically rethink how we mobilize people and organize resources to productive ends”.
Next up in this transformations series is the sixth enabler: sense and respond systems. These systems are critical to the transformation agenda, as most of the disruptive technologies likely to impact the enterprise in the next decade have data at its core. The resulting data explosion promises to complicate information management for most companies. As the speed of business accelerates and the amount of data flowing through company ecosystems expands, the need to sense stimuli and enable a real time response intensifies. Fortunately, rapid advancements in the price and performance of technology make realizing this sense and respond paradigm achievable and economical for a wide range of use cases – but this is arguably one of the most difficult components of transformation road maps.
This recent Big Data Article from the Mckinsey Global Institute focuses on three key themes – some or all of which will impact every company in the future.
- Big Data will increasingly form the foundation of competitive advantage for years to come.
- Big Data will drive new business models across every industry.
- Decision processes will forever be changed.
A company’s use of Big Data will increasingly be driven by competitive pressures from those that effectively leverage its insight. As these companies mature in their use of data, they will shift from competitive response to competitive advantage. Decisions will improve, driven by an ability to simulate and model various scenarios that enable optimal outcomes.
The really interesting aspect of Big Data – and the analytics that help us derive insight – is the potential impact on complete value chains. This article provides some good examples of this phenomenon at work. In essence, data will drive new business models. Members of a value chain that own data may have an ability to monetize it. Those that have a proven ability to deliver insight from this data can monetize a core competence. Some companies may find themselves driving revenue from a business model that was never envisioned.
Whether it is new business models, better decisions, or enabled actions, the effective use of Big Data requires a level of analytic excellence that few companies have with any level of scale. This Mckinsey article echoes an earlier report that identifies a scarcity of analytic resources as a key obstacle to Big Data success. As I talk to companies about their digital strategies, I continue to focus on Big Data as the centerpiece of the strategy.
Customer support is evolving to handle an ever-growing number of channels. Social media interaction is playing an expanding role in how companies provide support to their customers. I believe this Press Release from Attensity gives us a view into the future call center. As the press release points out, social media is quickly becoming a key component of customer care strategies.