Posted July 10, 2018 by Abhishek Pandey @ 3:58 am
Digital transformation is forcing the hand of businesses everywhere. Adapt or die seems to be most modern companies’ mantra in today’s cutthroat world. If they aren’t proactive at responding to changing technologies, social behaviors and the ingenious marketing campaigns of the competition, they’ll end up in the recycling bin.
The Changing Game
Technology has always been the great enabler. Just look at the Industrial Revolution. Nowadays advancements are leapfrogging at accelerating speed because modern technology is powered by software. Digital technology leveled the playing field. Now competition comes from unexpected places. Upstart companies with bold business models move fast, ship often and design for customers first. And they’re gaining market from the big boys.
Impact on Customer Economy
People behave differently too and are doing new things because of digital technology. They use digital products and services in unexpected ways. With powerful capabilities, they now communicate with each other and with the companies that serve their needs and interests. They chat privately with friends, send messages to public groups, and reach strangers around the world. They share their opinions in online reviews, tweets, Facebook posts and YouTube videos. They’re discerning and not afraid to wield their choice. They seek products and services that add value to their lives, and they want them from companies they believe are fair, genuinely care, and demonstrate social and environmental responsibility.
Digital Revolution Equals Customer Revolution
There’s no way to predict how the digital revolution will play out. Every industry will be disrupted, probably sooner than we think. Adapting to this reality is the most urgent challenge facing business leaders today—how to sense the oncoming change and emerging opportunity then respond to it rapidly and effectively?
The companies thriving amidst the volatility and uncertainty don’t move at an annual pace. They’ve adapted to harness continuous change. They sense instantly, respond in real time, and innovate continuously at startup speed. Every day they try out new things in the market, observe people’s behavior, measure the effect and adjust quickly. In return, customers get to experience new offerings as they evolve, and vote with their wallets. These companies are having an ongoing conversation with customers, employees, partners, and stakeholders that are rich with information about creating customer value. They don’t have strict plans. Instead, they’re learning their way forward.
Contrast this with incumbents who must protect their core business for as long as possible. Who, for a while, manage to make enhancements through localized digitization efforts but, despite facing the continuous threat of disruption, inevitably succumb to the pressure to deliver higher share prices in the short term. Financial engineering wins out over refreshed customer value creation. These established companies rarely get the chance to sustain a longer-term effort to create fertile ground for future growth engines. Unlike Amazon with its ambidextrous strategy rooted firmly in its organizational culture, they can’t execute today’s business while also cultivating the business models for tomorrow that will disrupt their market and even their own business.
Grand Challenges And The Greater Good
Disruption is all the rage. When its impact is positive for society as a whole, disruption is a good thing. Rather than looking for markets to disrupt, we must look for the human endeavors we can empower with digital technology. This is a greater good than just getting one up on the competition.
Today’s grand challenges and wicked problems need more than clever code. They need a different approach. One that embraces change and enables continuous experimentation. One that’s inclusive and sees entrepreneurs, design thinkers and creative technologists collaborating with industry experts and customers, cancer clinicians or climate scientists, to reimagine what’s possible and do the remarkable.
It’s difficult to predict what the market needs yet projects are still planned as if we know exactly what’s going to work. Projects are managed by specifying the outputs or deliverables, which are nearly always features. This stops us adapting to what’s being learned. Businesses must shift from delivering the outputs they think are needed to realizing the business outcomes they want. They must declare those outcomes in a way they can be measured, and give teams the freedom to try different approaches, experiment, and learn how to get there given constraints like time and cost.
Mobile-first apps with their gesture-driven customer experiences, industrialized digital platforms, and the API economy are ushering in complexities that require us to collaborate like never before. Digital ventures need agile teams that are more cross-functional than ever before. One dedicated team of designers, developers and digital workers of all kinds; entrepreneurs, business stakeholders, domain experts. Businesses must encourage them to bring all their courage, curiosity and creativity to the table, and have continuous conversations with users and customers to understand unexpressed and unmet needs and determine the market demand.
To be able to sense and respond, people must be learning all the time. To understand customer behaviors and the data they generate everyone must develop the new universal skills of customer listening, empathy, assessment, and dialog. Learning needs a culture of openness and humility that supports curiosity, welcomes other ideas, and respects the skills, strengths, and humanity of fellow collaborators. It must give permission to fail, embrace the willingness in people to admit they don’t know the answer, and celebrate their eagerness to go find it.
Agile practices enable product teams to make small changes in an ongoing way, continuously sensing the performance from customers and responding with successive adjustments, be they new features, business rules, pricing, marketing language, support policies, or anything else that contributes to business success. The core principles underlying agile methods have fundamentally changed planning to leverage continuous learning—listen rather than predict, make a credible guess, get feedback in nearly real time, then adjust the plan. Similarly, Innovation Accounting and Beyond Budgeting have changed how to budget. It’s no longer affordable to make commitments a year in advance when every day there are new things being learned. This changes how digital products and services are marketed and sold.