Many technologists and historians speculate that the next 20 to 40 years could represent the most transformative time in human history. Although time will tell whether this is truly the case, businesses must find ways to succeed despite constant disruption, growing complexity, the convergence of technology, and an accelerating pace of digital transformation that can be hard to keep up.
Does your business have what it takes to make it, take it, and do what your business is designed to do? Unfortunately, you do not have the time to wait and see.
In “The Next Paradigm Shift and Your Digital DNA,” from Digital World, a special edition series of Coffee Break with Game-Changers presented by SAP Radio, I joined Frank Diana of TCS Global Consulting and futurist Thornton May to discuss the changes, threats, and opportunities presented by this increasingly digital world.
You cannot solve problems with the same thinking that created them
Frank Diana kicked off our conversation with this thought-provoking statement: “Most leaders are still driven by status-quo thinking. They are beholden to institutions of the past whether they are education, government, healthcare, or others. Over time, they became the foundation of how businesses run. Our past truths are not going to serve us well in the future.”
Currently, we are seeing a convergence of forces: advances in science, a new general-purpose technology platform, the exponential progression of technology and innovation, the digital phenomenon, and the ability to rapidly combine building blocks (combinatorial) to create value. Although technology has progressed exponentially, we are also clearly seeing the exponential rise of innovation. Those two forces have combined with societal change to create the uncertainty, speed, and change dynamic in the current environment.
The acceleration and convergence of the digital platform with a growing list of innovation accelerators are spawning a mounting number of disruptive scenarios such as the connected car, smart home, or maker movement, and mass customization. Collectively, they are massively disruptive, even if they reach only 10% of their potential.
Diana advised, “New needs emerge much quicker than they ever did. Even the prosumer can 3D print exactly what they want, when they want it. Leaders must start thinking about the impact of these scenarios, sooner rather than later, to begin to understand opportunities, risks, and potential responses.”
Innovation occurs when scientific and social conditions are ripe – not when lightning strikes
According to Thornton May, we are currently living in a digital hole, and we need to stop digging. “Approximately 90% of the global population is not ready for a digital world. The idea of industrial innovation must be abandoned and previous notions must change to embrace this new digital revolution. The day of the single inventor is over; we all must work together to get ready for digital,” he stated.
If you study history, you’ll see that humankind has experienced 600 years of transformation. Although their current situation is not unique, most executives surprisingly feel like this is their first transformation. This is a good time for leaders to step back and reflect on history, learn from it, and possibly make new mistakes or breakthroughs. May warned, “In times of transformation, never, ever believe you are in a mature industry. There are no mature industries, only mature managers who unthinkingly accept someone else’s definition of what is possible.”
According to May, less than 10% of enterprises have truly commissioned a real, new IT strategy. This takes time, probably no less than six months. Real IT strategy is both a top-down and bottom-up process that requires a moment to step back and think about the future. Most of the exercises currently being touted as “IT strategies” are, unfortunately, nothing more than tweaking or updating in-place annual budgets.
“The leaders who emerge from transformational times successfully tend to be what business school professors call situational heroes – ordinary people anointed by their peers in recognition of their behavior. It is not the change that matters. It is how you behave related to the change that drives outcomes,” May observed.
My turn: Technological change has never really been about the technology
Technology is now the easy part – the hard part is knowing what to do with it. One of the biggest things organizations are struggling with is that the possibilities seem so endless that they do not know where to get started.
It’s obvious that we are experiencing big technology changes. Gartner calls social, cloud, analytics, and mobile the “nexus of forces,” Forrester calls it “the Third Platform.” I tend to prefer the acronym, “SCAM.” However, of course, it’s not a scam – it’s a massive opportunity to do business in new ways.
The easiest and most immediate opportunities are in four areas: getting closer to customers; empowering and inspiring employees; optimizing resource use in real time; and taking full advantage of the new digital economy. Doing these things right means cutting across traditional organizational silos. Companies that can simplify their technology platforms to enable more flexibility, will have a massive advantage for the next wave of innovation. However, managing the required process and cultural changes is harder and more important than the technology implementation. The biggest barrier to innovation is usually the complexity of existing technologies and processes.
The next wave is the big one. So far, we’ve only talked about using the new technologies that are available today. What’s new is that the acceleration of technology change is threatening to destabilize the typical innovation cycle itself.
As the technology gets more and more powerful, people start to become more and more important. The key is shifting your corporate DNA to see and understand change early and supporting organizational and technical flexibility to respond.
To hear our full panel discussion, listen to the podcast “The Next Paradigm Shift and Your Digital DNA,” from Digital World, a special edition series of Coffee Break with Game-Changers presented by SAP Radio.