Speaking at MaRS Verge recently, I was struck by the lasting significance of a story told by fellow panelist Alfredo Tan, a marketing director at Facebook. He reminded us how an employee at a well-known camera manufacturer had invented the digital camera in 1975, only for the patent to be kept quiet to preserve the company’s market share in film. That company did go on to make a lot of money off the digital camera patent, but it expired in 2007. Tellingly, the company filed for bankruptcy in 2012, having embraced digital far too late.
The story serves as a warning for every company that doesn’t have digital innovation front of mind, or that is persisting to resist and fight against the digitization of our entire economy. It will be those companies that cease to exist.
At the other end of the scale, the businesses leading the charge in digital adoption are now capturing 77% of industry profits. Their market valuation is skyrocketing and their value creation to shareholders is growing exponentially. Clearly, the risk is in not embracing the digital economy rather than moving to invest in it now.
With that in mind, why has new IDC Canada research told us that only 17% of Canadian businesses have plans to embrace the digital economy? This is perhaps not so shocking given that big Canadian companies tend to be conservative, but it is very telling in terms of the magnitude of the issue at hand. So in the hope of inspiring digital adoption in more Canadian businesses, I want to touch on the five inter-related areas of focus that make innovation and embracing the digital economy actionable:
- Revolutionizing the core. The systems that run businesses today are often latent. They tell us what has happened, not what will happen. With today’s technology it’s possible for the core to run in real time – to be ‘alive’ – allowing an organization to go beyond running more efficiently to reinventing how it runs.
- Igniting the workforce. In 2016 every business should have a plan to digitally maximize its best asset – its people. At MaRS Verge, 3M chief design officer Eric Quint said: “‘Create value for people, by valuing people.” This encapsulates the benefit of not creating foregone conclusions, but instead putting problems to teams for greater potential innovation. Also, bear in mind the power of a collision of ideas – interdisciplinary practices will be even more vital in the digital future of work.
- Inverting the relationship with the customer. It is possible today, through the live core I mentioned above, for an organization to connect and collaborate with customers in real time, predicting their needs, not responding to them.
- Collaborating beyond the walls of the enterprise. Doing this can bring game-changing efficiencies. Imagine a world where a supplier informs the supply chain, or even where competing organizations can connect to procure the same goods using the benefit of scale.
- Digitizing assets of the business. Physical assets and digital assets need not be two different things. As an example, a construction company’s physical assets – trucks, cranes, and lifts – actually predicate its ability to deliver projects. Converting these physical assets to digital assets means downtime can be avoided and projects can be delivered on time and on budget.
These five points are of course only the tip of a very large iceberg when it comes to building and acting on a digital innovation strategy. In the spirit of MaRS Verge, I’ll leave you for now with a comment from MaRS director Charles Finley: “The quality of our future will be designed by our ability to innovate and lead change, rather than simply respond to it.”
For more insight on implementing a digital innovation strategy, see Innovation Patterns And The Digital Business CIO.