Building a Digital Business for the Future

Building a Digital Business for the Future

Maven Wave recently participated in the 2016 AGENDA conference, hosted by IDG Enterprise in Amelia Island, FL. AGENDA is a business leadership conference focused on transforming the enterprise for the digital world. The conference is attended by digital leaders from all over the country who are leading transformation efforts in their organizations; C-level executives, VPs, and Directors from Marketing, Operations, Finance, Technology, and Operations.

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The conference helped to solidify the evolution of industry trends that we have been advising our clients on for some time and confirmed that the digital transformation is impacting everyone. In today’s world, if you don’t disrupt your industry with digital technology, you’re going to be disrupted. Below you’ll find our top takeaways and insights from AGENDA.

Bureaucracy is a $3 Trillion Problem

The conference kicked off with an inspirational keynote from Gary Hamel, professor at the London Business School, who was named “the world’s leading expert of business strategy” by Fortune magazine. According to Hamel, for a business to succeed in the digital world, bureaucracy must die. Most people work in organizations that fit a traditional corporate structure; authority trickles down from the top, senior leaders set the strategy, and individuals are rewarded for following the rules.

Traditional bureaucratic structures are no longer good enough and leaves the organization with a lot of unnecessary cost, due to the number of people and the amount of time spent on supporting it. Hamel estimates that bureaucracy is costing the US economy $3 trillion. He believes organizations can spend half of what they currently are, without missing a step, due to time wasted support bureaucratic processes. A top-down structure ignores what’s really happening within the organization and hinders innovation, engagement, and future growth.

Most Organizations are Facing Similar Challenges

Now that we established that bureaucracy is a barrier to success in today’s digital world, why is it so difficult for organizations to change? We agree that the old ways of running a business are no longer good enough, but transformation isn’t easy. Most companies are facing very similar ailments that are hindering them from embracing digital:

  • They are struggling to react to changing realities. The world is changing and often times, leaders can’t adapt fast enough to keep up. In a bureaucratic organization, leadership may be too caught up in the management of the day-to-day to be aware of rapidly changing technology trends. An example of this lack of awareness is when tech giant Intel failed to capitalize on the explosive market growth for mobile devices. Today, just 3% of Intel’s total revenue comes from the “Mobile & Communications” business unit.
  • Rewards are not fueled by innovation. Business leaders are not held accountable and are not compensated for encouraging innovation among their teams. There are few incentives for challenging the status quo and employees are rewarded for following the rules, not for innovating.
  • Organizations are inhuman. Globally, only 13% of employees are highly engaged with their organizations. Companies need employees who have the drive, passion, and imagination to propel their organizations forward. Without this passion, innovation is difficult to achieve.

There is an Increasing Digital Divide

While many organizations can relate to these challenges, there are a few who have fully embraced digital. These “Digital Disruptors” are aggressively using emerging technologies to create a business that thrives at digital transformation. They are growing exponentially and have a roadmap that is designed to disrupt their industries. Just 8% of companies can be considered disruptors and visionaries of digital transformation.

Meanwhile, organizations that are just starting to test the waters by moving certain applications to the cloud or collecting big data are considered “Digital Explorers.” Explorers are looking for opportunities to digitally transform, but are just getting their feet wet. Those that have taken the transformation a step further by eliminating legacy systems or deriving actionable insights from data are “Digital Players.” These companies have established repeatable processes and are starting to embrace the transformation. 65% of all organizations fall into the “Digital Explorer” and “Digital Player” categories, indicating there is still a huge opportunity for companies to fully embrace and take advantage of digital (IDC Maturity Model). Companies are often stuck in these early stages of digital maturity if they don’t have the right people with the right skills, if they are stuck on legacy systems, or if the culture does not support innovation.

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IDC Digital Transformation Maturity Model Benchmark, March 2015

Actionable Roadmap for Becoming a Digital Disruptor

Throughout the keynotes, panels, and breakout sessions at AGENDA, a few key themes surfaced for leaders to develop a roadmap that will move their organizations further along the digital maturity path.

  1. IT needs to innovate with the business to integrate digital capabilities throughout the enterprise. IT and the business cannot operate in silos when it comes to digital transformation. The CIO and the CEO must be completely aligned and working towards the same goal. Start by working together to focus digital transformation efforts on the parts of the business that need to drive innovation and are most adaptable to change. It’s important to determine the appropriate amount of change the organization can handle, and react accordingly.
  2. Leaders should be social architects that help employees realize their potential. Organizations are less capable than the employees inside them. There are many ways to encourage employees to fully utilize their talents, depending on the culture and what the organization is comfortable with. Some companies have found success by simply providing unstructured time for ideation during regular working hours. Others leverage internal IT platforms to engage employees and get them talking about new ideas. Some forward-thinking organizations have even crowdsourced innovation by hosting an internal hackathon in which employees self organize around ideas and actually bring them to life. Whatever ideation method works best for an organization, it’s just important to get employees thinking and creating to their full potential.
  3. Collaboration is the catalyst for digital transformation. If you analyze companies like Google, Uber, Airbnb, and Netflix, who are all true digital disruptors, you’ll find that collaboration is the catalyst for both transformation and innovation. To enable effective collaboration, companies must provide tools that allow employees the catalyst by which they can work together, in real-time, from anywhere around the world. Putting connected digital technology in place enables patterns of organic collaboration. When the right people work together without boundaries, amazing things can happen.
  4. Deliver consumer-focused digital experiences. The ability to attract and grow loyalty with customers by creating interactive digital experiences is the true ROI of digital transformation. As an example, one of the keynote speakers was Dennis Maloney, Chief Digital Officer from Domino’s. He spoke about how the company has transformed over the past 5 years into a “technology company that just happens to sell pizza” by enabling their customers to order pizza via text message, Twitter, using a pizza emoji, or even from the car (using Ford’s SYNC Applink System). Their ability to create amazing and interactive experiences with digital technology has resulted in more than half of their $4 billion in sales coming from digital sales channels. Customers have come to expect seamless digital experiences from the companies that they do business with.

The move to digital can feel overwhelming with so many new technologies, new skill sets required, and changing consumer demands. The roadmap for digital transformation of the enterprise will take much more focus than just the themes discussed at AGENDA. Maven Wave can provide the guidance, technology expertise, and change management needed to successfully transform the enterprise for the digital world. Contact us for more information.

About the Author:

Jessica Wesley
Jessica Wesley serves as Director of Marketing for Maven Wave. Ms. Wesley brings a broad range of advertising, marketing, and social media experience. Wesley began her career at Euro RSCG as an Account Executive working on the Sprint account. In connection with receiving her masters degree in Integrated Marketing Communications from Northwestern University, Ms. Wesley designed a social media marketing strategy for Motorola Solutions. Immediately prior to Maven Wave, Wesley spent 2 years at Morningstar where she was a Corporate Marketing Manager.