Destroy, then build, for true business transformation
With so many new, cheap digital tools, why aren’t we seeing more disruptive innovation?
The essence of market economies involves destroying the old and celebrating the new. Joseph Schumpeter, a 20th-century Austrian economist, called it “creative destruction”, and described it was the only route to innovation and sustained growth. This has seen CDs scrapped for music streaming, Blockbusters for Netflix, Blackberry’s demise and iPhone’s rise and Uber upturning taxi services.
Right now, digital solutions are cheaper and more democratised than at any point in human history. From manufacturing to finance, retail to healthcare, tranches of the global economy are adopting them, making it easier for businesses to adapt.
It means you can take bad habits and scrappy data from old analogue firms and make them more digital- and data-led. You can reconcile old data silos and deploy AI to make sense of legacy systems. Because you have an established customer base often little or no creative destruction occurs.
“Building digital capabilities is easier than ever. But getting enterprise-wide adoption of digital remains incredibly difficult – change is difficult. Businesses find it tough to evolve old paradigms when there isn’t an existential threat forcing them to do so,” explains Jet Lali, chief digital officer at State Street Global Advisors.
The challenge of business model innovation after the adoption of digital technology can be exacerbated by a focus on profitability
The Age of Intelligent Automation
Artificial Intelligence & Robotic Process Automation
Intelligent automation brings together two advanced technologies: artificial intelligence and robotic process automation. When fully realised, intelligent automation can increase organisational efficiency and productivity, reduce costs and optimise back-office operations. Automation is no longer just for warehouses and manufacturing plants.
Destination upwards: how to get to the next level
Having the right people and the right culture is crucial if companies want a digital transformation strategy that continues to keep up with the pace of technology
A common misconception is that much as the data dots in different areas of a business need to be joined up, employees across all functions – including facilities, finance, HR, IT and operations – need to be aligned with the vision and goals of the digital transformation strategy.
“It should not and does not rest on the shoulders of a single team. It’s an organisational change that can impact every area of business, which is why digital transformation projects need to consider people, processes, and systems in their thinking,” says Will Smith, senior strategist at Equator.
An employee culture that embraces change is more likely to be prepared to quickly pivot business operations. “Companies will undoubtedly encounter challenges along their digital transformation project, which can change the course of projects,” says Smith. “It’s essential that teams have degrees of flexibility to allow projects to realise the core vision and target state.”
What is required, is a long-term commitment from business leaders to have in place the support systems and tools that employees will need to sufficiently drive this continuous, virtuous circle of improvement and innovation.
Does a digital transformation have a final destination?
Digital transformation can’t be delivered overnight, over a few weeks or even over a few months.
By the time companies reach their initial destination, new technology will likely have come along or another part of the business will need digitalising to prevent it from standing still or, worse, falling behind.
“The final stages of digital transformation projects are often a mirage because they don’t really exist,” says Will Smith, senior strategist at Equator. Once companies have reached their initial destination “it’ll be time to review and define a new vision for tomorrow”, he comments.
This is why getting the right people on board and having the right company culture in place are so important.
Creating digital threads of data that flow through every department and function can help.
Access to good data, which is also reliable, makes it possible to monitor trends, spot opportunities and invest in the right technologies. Once the benefits of digital transformation to a business are ingrained into company culture, digital transformation should continue to evolve.
Read the full report
Covering insights and case studies across all aspects of Digital Transformation including agility, leadership, automation, skills and strategy, the Raconteur Report is essential reading for anyone keen to understand how to make the most of the digital transformation.
As a dedicated Digital Transformation Consultancy, we are best placed to answer any further questions you might have about digital strategy, transformation roadmaps and implementing data-driven agility. Please get in touch if you’d like to discuss any of these things further.