Machine to machine capabilities with AI. Near-real-time data processing. Voice control and face recognition. Hyper transformation of ecosystems. New business models.
Now, when the year 2017 is nearly at the end, these are the milestones that forerunner companies see at the business development horizon.
For many traditional companies, who have this year executed only the very first experiments towards an agile and digital organization, these things are more science fiction than real reality.
The end is near if the world around us is changing faster than we are
Today every top manager has personally recognized the speed of change and evidenced that the competition in the digital world is tighter than in brick-and-mortal.
The business rules have flipped upside down. Favouring new agile and digital born players, causing true problems to legacy companies defencing current market share and focusing only on operational efficiency.
Based on Forrester , 60% of executives believe they are behind in their digital transformation
How to win with the winners?
Even the traditional industry boundaries have collapsed, the Dow Jones Industrial Average has gone through the 24,000 mark for the first time.
Somehow few organizations have managed to exploit digitalization better than others.
We have investigated closely 10 successful large scale digital business transformations and common thing for all of them is a razor-sharp vision set by the top management.
One of the success stories is Wärtsilä, which created one of the first industrial Amazon.com kind B2B web stores.
Today Wärtsilä can predict spare part subscriptions even before their customers makes the actual order
As a another indirect result of the business transformation Wärtsilä enabled to close a massive €900 million maintenance service contract with Carnival Corporation.
Second example we studied was Nokia, which transformed itself from Walking Dead into one of the world’s leading network infrastructure and technology players.
Nokia’s top management did a couple of bold moves: selling of Maps & Mobile Phones and merged NSN & Alcatel-Lucent
Heavy business portfolio reorganization worked out, because Nokia’s leadership board managed to define digital strategy answering basic questions:
- Where do we play?
- How do we play?
- How we are going to win?
- What is the result?
Digital strategy puts digitalization in the core of the business
Afterwards this kind of strategic move look obvious, but in the begin or mid air of the digital journey it can be difficult to see the correct path.
Businesses have entered a period of constant transformation and now is the time of the year when many of us plan the year 2018 and rewrites digital strategy for the years beyond.
Below are my tips how leaders can shelter from digital disruptions and build key capabilities for adaptive and responsive organization:
1. Digital agenda should begin with people. Skills, attitudes and mindset needed during the digital journey are totally different that many organizations currently have. At the end business is still from people to people, where technology is only enabler for new kind of interaction.
2. Data driven agile culture is the key to positive customer experience. Top management must have unfiltered data directly from the current and potential customers. If the analysed information is understood correctly, it gives a clear picture of what customers’ value and what they are willing to pay.
3. Business innovations pop up from systematic work. Digital business transformation is all about innovations and innovative ways to use technology. Companies need to frame a model that quickly and cost-effectively facilitates idea funnel to new digital services and products.
Please comment how you see the future and share your own tips!
Good luck and Happy New Year 2018!