I recently spoke with a select group of Cox Communications’ customers. The audience consisted of CXOs in gaming, healthcare, education, and the public sector. I was impressed with the dedication and commitment they showed to urgently solving the very difficult challenges of thriving in a world of digital disruption. Here are the top three insights I would like to share from this event.
- Digital Disruption Runs Wide and Deep
The CXOs in attendance were from a wide variety of industries. They were all very aware that disruption is here, yet the extent of how it was impacting their industries and companies varied. This is in line with the research members of my team have done with the Global Center for Digital Business Transformation.
Digital disruption is like a “vortex,” a rotational force that draws everything nearby to its center. In the digital vortex (below), the center is where everything that can be digitized – offerings, business models, value chains – is digitized. Industries closest to the center of the vortex face the most substantial competition and disruption, while those around the edges feel less immediate impact. Over the past two years, there has been a high level of industry convergence, and that is a major source of the disruption we are seeing.
DBT Center’s 2017 Digital Vortex Industry Ranking (Orange: dramatic disruption, Blue: significant disruption, Green: modest disruption)
- Cisco’s Digitization: Start with Customer Value Creation
Many CXOs were intrigued with Cisco’s transformation approach and saw it as a way they could digitize their own companies. At Cisco, we focus on “twin imperatives” of digital transformation. First, we are innovating our business model. This means how we make money and especially how we create value for customers in new ways. The second imperative is creating greater agility in Cisco’s operating model, which includes our how our people, processes, and technology work together in order to capitalize on new business models. Focusing on how to create new value for customers is the right point of departure for your transformation journey. For more information about Cisco’s own transformation, please read my previous blog.
- Digitization Requires Timely Application of Technology and Talent
Given the speed and power of digital disruption, it is tempting to simply apply new technologies to old ways of doing business. Rightfully so, the CXOs all recognized that simply automating existing processes and practices would just exacerbate the issues of revamping their business and operating models. Instead, companies should first do what is needed to reinvent how they work and deliver customer value. Only then should they automate their redesigned businesses with new technologies.
This discussion also brought up the issue of finding the right talent. Surviving in a world of disruption means operating at speeds faster than ever before. While many companies are willing to transform, they are often hampered by the lack of the right talent to do so. It is important to remember that digital transformation requires an “all hands on deck” approach where every organization, especially HR, must understand and be fully committed to achieving the company’s digitization goals.
How do these insights align with your transformation experiences? Is there an opportunity for your company to reinvent and digitize your business and operating models? I’d love to hear your thoughts.