By Cesar Castro, Managing Partner at Escalate Group
Remember Compaq? MCI Worldcom? TWA? They were once household names, but not anymore. In the mobile industry, I closely experienced the rise and the fall of mobile pioneers and giants such as Nokia, Motorola, Ericsson and Blackberry.
We have all heard that businesses are more volatile and uncertain today and the truth is that the current speed of transformation requires agility on how we manage our business and ourselves. Big changes across industries are driven by external factors such as cheaper computing power, the emergence of platforms, the rise of mobility and the cloud, the social business and the explosion of big data and advance analytics.
Digital business transformation is one of the hot topics today, complete industries such as music and newspapers have been disrupted and more recently successful “Unicorns” such as Quirky (Make Invention accessible), GitHub (Social Coding), AirBnB (Belong Anywhere) and Uber (Everyone’s Private Driver) are disrupting with new platforms while creating new business models using the sharing economy to drop the cost of demand and the cost of supply while bringing revolutionary innovation to our lives. We are surrounded by people and companies developing new products and apps that improve our daily lives with evolutionary innovation models. Amazon, Apple, Microsoft, Netflix are good examples of companies that innovate outside-in making bold choices. It is very exciting living in these times. Peter Diamandis[1] is totally right when he affirms that we are living in a novel era of extraordinary abundance. We are in the golden age of Information Technology.
Innovation will only accelerate the creation of opportunities for everyone. Internet has democratized the information and the breakthroughs will happen around the world both in developed countries and particularly in emerging markets where the opportunity gap of the Digital Transformation is even bigger. We are moving from physical products to digital products, from physical distribution to distribution over Internet. In the future you are a digital business or a dead business, or in Andreessen’s[2] words “Software will eat the world, in all sectors. Companies need to adapt or they will become extinct. In the future every company will become a software company.”
The digital transformation journey starts when we engage with the digital consumer and create value in the networked world. In Saffo’s[3] terms, it is “the transition from the producer economy to a creator economy”. Many companies are already well advanced engaging with their digital consumers and some are even one step ahead digitalizing their business and operating processes while integrating technologies to transform themselves. Gartner[4] sees a world moving toward business models based on services and impact, where the cloud is the key for business to gain scalability and competitiveness. I am seeing a huge momentum in Enterprise platforms across different industries in Latin America, choosing your cloud partner is as critical as choosing your new default platform so please don’t make these decisions lightly.
Internet is evolving into a new 3rd phase that is divided in three stages: 1.The Internet of money driven by technologies such as bitcoin/blockchain that are already disrupting the banking industry; 2.The energy Internet where solar technology and Sensors/ IoT (Internet of Things) will play a very significant role; and 3. The logistics Internet driven by platforms, AI (Artificial Intelligence) and technologies such as 3D printing. A totally new phase of Digital transformation is in front of us, some denote it as the industrial Internet, and Rifkin[5] refers to it as a new economy paradigm in his book “The Third Industrial Revolution”. Soon, much faster than the rapid adoption of smartphones, we will have billions/trillions of sensors connected to the Internet that will, in many cases, communicate among them without human interaction.
The first step of any successful transformation is self-awareness, so it is important to ask ourselves where we are standing on our Digital transformation journey. Here are a few relevant questions for reflection:
- Am I using engaging marketing to maximize the interactions with my consumers while reducing their friction with my products/services?
- How advanced am I in the process of digitalizing my operating and business processes?
- What percentage of my revenues are under threat from digital disruption?
- As a business leader, am I willing to co-drive the digital transformation?
- How am I preparing for the industrial Internet?
According to IDC[6] predictions, by the end of 2017, one in three CEOs of the Top 3,000 Companies in Latin America will have Digital Transformation at the center of their corporate strategy. Leadership plays an important role in the highly volatile and uncertain world we all have to operate, a world that requires deep business transformations while we keep driving the execution and performance of our short-term goals. Leaders that become the catalytic agent of change at their businesses cultivating the right environment, driving the culture and way of working for change to happen will lead their companies to emerge as the winners of the 3.0 Internet era.
There are many frameworks available in order to facilitate the creation of new business models where digital meets physical and to help companies become digital, consulting firms and IT providers can help you as well. For example the ExO (Exponential Organizations) Community, founded by Salim Ismail[7], recommend and help businesses to focus on creating Massive Transformation Purposes (MTP), examine ExOs in your industry (and adjacencies), learn through experiments and implement innovation and creativity into the traditional organizational structure.
Perhaps you have heard the stat that 40 percent of today’s Fortune 500 companies will no longer exist in 10 years. So the key question is: Are you taking the right steps to tackle the opportunity gap of your Digital Transformation journey?
I hope these lines motivate you to post your comments below, so we can all learn from each other experiences!
[1]Peter Diamandis, International pioneer in the fields of innovation, incentive competitions and commercial space
[2] Mark Andreessen, Founder of Netscape, renowned Venture Capitalist
[3] Paul Saffo, Consulting Professor in the School of Engineering at Stanford University
[4]Gartner, Inc. is a research and advisory firm providing information technology related insight
[5]Jeremy Rifkin is an American economic and social theorist, writer, public speaker, political advisor, and activist
[6] IDC, American market research, analysis and advisory firm, specializes in information technology.
[7] Salim Ismail is a Canadian angel investor, speaker, advisor, entrepreneur and strategist. He is author of the Amazon bestseller Exponential Organizations