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Digital transformation is both a threat and an opportunity: under its influence, some companies go bankrupt and others become world-famous (like Booking or Google). We will look at an action plan that can take a company from a vulnerable position to a new opportunity, step by step.
Step 1. Change your personal perception
The first step in development is to realize what is happening. You must take a closer look at the world around you to see trends and patterns that are changing your business. We know from our experience with clients that this change is more like personal development than strategic analysis.
This is a very important point. Transformation is something that everyone should accept, realize and feel. It cannot be fenced off by procedures or delegated to an IT manager. You need to immerse yourself in it! This is a new way of thinking. You have to tell yourself, “In the future, I cannot be a manager without realizing this.”
Analyze your environment regularly. What is happening in the world? What do we see in the markets of other countries? What are our competitors doing? Who are the new players?
In addition, executives can test how easy and convenient it is (or really not) to become a client of the company. After all, this is precisely the way new players enter the market.
After that, start looking closely.
Step 2. Find Partnerships
After personal immersion in the problem, you must inspire and mobilize your entire organization. The goal is to develop the company taking into account new trends in the market, with the knowledge that the earth is burning underfoot and it is necessary to rush to search for new opportunities. First of all, it is a question of the correct assessment of the environment, which cannot be done without attracting the management team, employees, and business owners to our side.
The leadership of the company must be the ones who challenge and ask the right questions that move the company forward. The main task of the management team is to understand the world around the company, including potential threats and opportunities. As a result of their work, you need to make sure that the company’s management regularly asks itself the following questions:
· Where can the revolution in our industry come from and in what form?
· How sustainable is the current business model? You need to stress test it in case of a potential coup.
· How resilient is the entire system against a potential reversal: your company, supply chain, and customer relationships?
· What is your response strategy? Will you be the one to initiate the transformation of the industry, or will you quickly follow the leaders? How successful are you at implementing the latest innovations and responding to current threats?
· What is the tone of the organization? Where is the greatest resistance found? What competencies are needed and where can I get them?
You should regularly collect this information and initiate discussion about it. It is about finding a common language to discuss transformation. It is important to understand who in the team can take the initiative and understand where it is most in demand. Who can lead this breakthrough? Who can inspire? How to properly assign these roles?
Step 3. Work the strategy and plan
The next step is to adapt the business to the changes around it. You can start by looking at where you are at risk of facing the most stress. Work with your business model, for example, in the form of its visual model, and analyze its most vulnerable elements. This will be a good starting point for developing transformation scenarios.
The hardest part is looking at your organization from the outside. There may be an internal interest in avoiding this kind of scrutiny. Managers will be able to convince each other that the business model is sustainable and you are not in danger and believe in a special relationship with your customers that will protect against any threats. However, history teaches the opposite. A sober look from the outside is very important in this step. For a more objective view, it is a good idea to invite outside consultants. You will know exactly the possible sources of threats and can begin to develop response strategies and scenarios.
Step 4. Deceive your company’s security
The next step is to mobilize the company’s ability to change quickly and be flexible. Every company is immune to change. Like a person, a company goes through a curve of change that starts with denial, turns into depression and loss of faith. Much later, acceptance takes place to take advantage of the opportunities that open up. Accordingly, if you have to transform the company, changing the leadership style will be the main challenge. It is important to determine whether new initiatives will emerge internally or externally. Will the entire company change at once, or will there be many compact initiatives around it?
It is worth considering new business models and innovations as a kind of conveyor (as pharmaceutical companies do when developing new products) – a set of constant steps that must be taken to bring a product to market. This is how accelerated innovations are implemented: they “grope” and test new things in order to quickly make a decision about the viability of each idea. This approach will save you a lot of time working out in detail what will really move the company forward.
Step 5. Go for it!
During the implementation phase, the most important innovation is speed. We need to forget about the classic “good-looking” engineering approach, where the “ideal” product is developed, tested, and refined again before we show it to the client. You have neither the time nor the resources to do this. “Get it wrong quickly!” should become your motto and this will probably be the biggest culture shock for your company. You must learn to do everything quickly and easily so as not to waste all resources in one direction.
McDonald’s is a respected and established company that has been able to accelerate innovation. Trying out a new dish begins with a simple photo in a couple of restaurants. Then the reaction of customers to the photo is assessed. Customers order a burger that doesn’t actually exist yet. The staff responds that this product is in development, thanks for your interest, and offers one of the burgers on the menu for free.
With three months in a testing lab with a focus group trying to gauge customer interest in a new product, this is an incredible breakthrough. All you need is a photographer.
Then the burger begins to be sold in several pre-selected restaurants. It is still not included in the company’s complex supply chain, it is simply prepared by a few chefs in the kitchen. In the test restaurant, you can immediately assess the perception of the novelty. Only after the proven success will the product be fully developed and included in the logistics flow. It’s fast and cheap to develop. If the idea turns out to be bad, it will become clear very quickly!