Digital disruption starts with disrupting your business model

Recently I was posed the question “how can we shape organisations to be successful in an environment of digital disruption?”

The convergence of technologies, such as cloud, social, mobile and information (the Nexus of Forces) …. are driving the Digital Industrial Revolution (Gartner).    The convergence of these technologies has formed what Fred Wilson has described as the Golden Triangle:

“The three current big megatrends in the web/tech sector are mobile, social, and real-time.”

However, technology is just one part of the digital disruption equation.  You can forget about digital disruption if you don’t disrupt your existing (traditional) business models.

Over the years oragnisations have updated their technology roadmaps and invested in new technologies to support their business strategies.  Yet organisations have retained their legacy processes and policies and have not adapted new ways of working to compete effectively.   Most organisations are built to sustain their existing business models which are not geared towards creating digital experiences for customers. Existing governance structures are often too slow, too siloed, stifles innovation, adds bureaucracy and all too inconsistent.

Increasingly organisations are embracing new paradigms and principles in the way they work in the era of digital.  Many of these incidentally come from Agile and its related areas such Lean, Kanban, Design Thinking, Systems Thinking, and Lean Startup. Take for example the U.S. Digital Services Playbook:

1. Understand what people need
2. Address the whole experience, from start to finish
3. Make it simple and intuitive
4. Build the service using agile and iterative practices
5. Structure budgets and contracts to support delivery
6. Assign one leader and hold that person accountable
7. Bring in experienced teams
8. Choose a modern technology stack
9. Deploy in a flexible hosting environment
10. Automate testing and deployments
11. Manage security and privacy through reusable processes
12. Use data to drive decisions
13. Default to open

and the UK Government Digital Services Design Principles:

1. Start with (user) needs
2. Do less
3. Design with data
4. Do the hard work to make it simple
5. Iterate. Then iterate again.
6. Build for inclusion
7. Understand context
8. Build digital services, not websites
9. Be consistent, not uniform
10. Make things open: it makes things better

Adoption of an Agile models, Lean Principles, a lean way to create a business model and a way to continuously innovate is vital if you want to compete effectively.  These (modern) delivery models and principles no longer play a supporting role, but are center stage – it is becoming essential to the success of businesses in the age of digital disruption.

None of the principles and policies by the U.S. Digital Services and UK Government Digital Services is about technology.  They are more about how work and business is to be done.  The companies that will be successful in the disruptive digital era will be those who look beyond technology solutions but also disrupt their traditional organisation and governance structures and invest in new business models.

The digital disruption is forcing businesses to change how business is done. This requires a business transformation that uses technology to create digital experiences for customers AND equally adapt or introduces new processes and systems[1] to successfully compete.  Through evolution of work design, organisations need to adapt and change processes and policies (and we are not just talking changes in IT only).  This will be BIG – it means changing one way of being to another.  A butterfly is nothing like a caterpillar.

 

 

Footnotes:

[1] W. Edward Deming defines a system as a network of interdependent components that work together to try to accomplish the aim of the system.  In this case the system is not an IT system, but the organisation as a system.