"The only constant in life is change."
This is a quote we've all grown up listening to, and yet we don't always manage to respond to it positively or proactively. We are who we are as a race, thanks to this constant change and our transformation in response. The inability to change, progress, or grow can result in stagnation. If we were to sit with our hands crossed and do nothing about it, change has the capability of rendering us redundant.
"When the rate of change on the outside exceeds the rate of change on the inside, the end is near."
These words of wisdom of Jack Welch became the reality of more than 52% of the Fortune 500 companies that ceased to exist due to digital disruption since 2000.
Even before a pandemic, organization leaders ranked digital disruption as their top business priority for 2020. And as we enter 2021, COVID-19 has escalated digital initiatives into digital imperatives, creating an urgent need to rethink strategy, leadership capabilities, and culture.
So, what is Digital? Is it a social media presence? Or mobile technology?
Digital is not a thing. It is a foundational change in how an organization delivers value to its customers.
It is a way of using technology to achieve three objectives:
- Create exceptional customer experiences
- Make internal processes agile
- Unlock new business value
To understand precisely What is Digital? How is it disrupting every industry? And how can you leverage technology to create exceptional customer experiences, make internal processes agile and unlock new business value? Watch this video where Rajiv Jayaraman, Founder & CEO, KNOLSKAPE, explains these concepts and more
How is Digital transforming our reality?
Technology is blurring the boundaries between physical and digital, between organizations, between the Now and the Next quite rapidly. So much so that we see entire industries being disrupted within months rather than years. And it is this phenomenon that Rajiv Jayaraman refers to as the Digital BLUR in his book, Clearing the Digital BLUR™.
BLUR stands for:
Boundaryless Organization – today organizations operate more like organisms in boundaryless ecosystems.
Limitless Digitization - everything is beginning to have a parallel existence in the cloud.
Unbounded innovation – as customer experience becomes more important, industry boundaries become less meaningful.
Relentless Iteration – as time gets crunched. Now, new and next start to happen all at the same time.
To respond to the Digital BLUR™ phenomenon, organizations must completely rewire their strategies, how these strategies get executed, the leadership competencies, and the organization's culture.
Why do you need to respond?
Business leaders are well aware that Digital transformation not only impacts industry structures and strategic positioning, but it affects all levels of an organization (every task, activity, process) and even its extended supply chain. They must ensure that they leverage this change to unlock productivity gains and significant competitive advantage while delivering exceptional customer experience. And with this in mind, a lot of digital transformation initiatives are being led and funded.
However, these digital transformation initiatives have not been easy to realize. According to the McKinsey research on digital transformation efforts, only 30% of Digital Transformations are successful.
Why do Digital transformation initiatives fail?
We must try to understand the reason behind the failure of these initiatives.
These initiatives are certainly not bad ideas. The problem is that they are badly championed.
Let's take the example of Ford motor company. In an attempt for digital transformation, they created a new segment called Ford Smart Mobility in 2014. The goal was to build digitally-enabled cars with enhanced mobility. The issues arose when the company did not integrate the new segment into the rest of FORD. Not only was it headquartered far from the rest of the company, but it was also seen as a separate entity with no cohesion to other business units. As Ford pumped vast amounts of money into its new venture, it faced quality concerns in other areas of the company. Ford's stock price dropped considerably, and their CEO stepped down a few years later.
To drive a transformation of this magnitude, digital transformation needs to be integrated into the company's DNA. You need to garner the alignment and commitment of all your stakeholders. You must take a three-pronged approach involving Strategy, Culture, and Capability:
The existing strategy must be replaced by a new one that is more closely aligned to a Digital ecosystem's opportunities and challenges. Seek answers to these critical questions:
- What does this new direction mean for us as an organization? Where is this taking us?
- What are our long-term prospects if we switch?
- These answers will help you discover possibilities that can be unlocked by being Digital.
Transformations ask for shifts, and shifts need a buy-in of your people, their alignment, and commitment. Culturally, stakeholders at all levels will need to change how they think and operate to discover more possibilities that can be unlocked by being Digital. And this is only possible when you:
- Create an Awareness of the need for change
- Generate a Desire to support the change
- Share the Knowledge of how to change
- Develop an Ability to demonstrate skills & behaviors
- Invest in Reinforcement to make change stick.
As digital reshapes strategy, its execution requires enabling people and updating processes and technology to build new-age capabilities so that they can turn these possibilities into reality.
As a leader, you need to make significant progress on all three to be able to convince your stakeholders and propel them on the path of transformation.
In our upcoming writeups, we will cover Strategy, Culture, and Capability transformation in depth. Do look out for them!
KNOLSKAPE is one of the fastest-growing experiential learning tech companies in the world. KNOLSKAPE accelerates employee growth and Development using an award-winning portfolio of simulations and in-depth talent analytics. KNOLSKAPE is a 110+ strong team with ofﬁces in Singapore, India, Malaysia, and USA serving a rapidly growing global client base across industries such as banking and ﬁnance, consulting, IT, FMCG, retail, manufacturing, infrastructure, pharmaceuticals, engineering, auto, government and academia. KNOLSKAPE is a global Top 20 gamiﬁcation company, recipient of Brandon Hall awards, and has been recognized as a company to watch for in the Talent Management Space, by Frost & Sullivan, and as a disruptor in the learning space, by Bersin by Deloitte.