{"id":12466,"date":"2015-07-15T14:04:37","date_gmt":"2015-07-15T13:04:37","guid":{"rendered":"http:\/\/timoelliott.com\/blog\/?p=7393"},"modified":"2015-07-15T14:04:37","modified_gmt":"2015-07-15T13:04:37","slug":"how-to-survive-digital-transformation","status":"publish","type":"post","link":"https:\/\/timoelliott.com\/blog\/2015\/07\/how-to-survive-digital-transformation.html","title":{"rendered":"How To Survive Digital Transformation"},"content":{"rendered":"<p><a href=\"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2015\/07\/game-changer-radio-on-air.jpg?ssl=1\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-7395\" src=\"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2015\/07\/game-changer-radio-on-air.jpg?resize=608%2C456&#038;ssl=1\" alt=\"\" width=\"608\" height=\"456\" \/><\/a><\/p>\n<p><em>MIT researchers say the invention of the steam engine began the most transformative social development in the last 3000 years. Fast-forward to today\u2019s paradigm shift \u2013 the convergence of technologies fueled by innovation accelerators like renewable energy, robotics, cognitive computing, and the Internet of Things. <strong>Is your organization prepared to thrive?<\/strong><\/em><\/p>\n<p>That&#8217;s the question that was discussed\u00a0in a recent\u00a0episode of\u00a0Game Changers radio: <a href=\"http:\/\/www.voiceamerica.com\/episode\/83782\/the-next-paradigm-shift-and-your-digital-dna\" target=\"_blank\">The Next Paradigm Shift and Your Digital DNA<\/a>, hosted by <a href=\"http:\/\/www.thorntonamay.com\/\">Bonnie D. Graham<\/a>, and featuring\u00a0Futurist\u00a0<a href=\"http:\/\/www.thorntonamay.com\/\">Thornton May<\/a>,\u00a0\u00a0<a href=\"https:\/\/www.linkedin.com\/in\/fdiana\">Frank Diana<\/a> of TCS Consulting and me,\u00a0<a href=\"http:\/\/timoelliottt.com\">Timo Elliott<\/a>, SAP Innovation Evangelist.<\/p>\n<p><video src=\"http:\/\/cdn.voiceamerica.com\/business\/011537\/sapdigital030315.mp3\" poster=\"http:\/\/www.voiceamerica.com\/\/content\/images\/host_images\/011537\/SAPDigital-player-wide.jpg\" preload=\"none\" controls=\"controls\" width=\"574\" height=\"320\"><\/video><\/p>\n<p>[<a href=\"http:\/\/cdn.voiceamerica.com\/business\/011537\/sapdigital030315.mp3\" download=\"\">Download MP3<\/a>] [<a href=\"https:\/\/itunes.apple.com\/us\/podcast\/digital-world-game-changers\/id966714798?mt=2\">itunes<\/a>] [<a href=\"http:\/\/www.voiceamerica.com\/account\/addepisodetolibrary\/83782\">Bookmark Episode<\/a>]<\/p>\n<p>We had a fascinating discussion about what companies need to do in order to innovate and survive digital disruption. The panelists&#8217; preprepared show notes give a good overview of the topics discussed:<\/p>\n<p><strong>Frank Diana<\/strong><\/p>\n<blockquote><p>\u201cWe cannot solve our problems with the same thinking we used when we created them.&#8221; (Albert Einstein)<\/p><\/blockquote>\n<p class=\"p2\"><span class=\"s1\">Perspective<\/span><\/p>\n<ul>\n<li class=\"p2\"><span class=\"s1\">\u00a0The next 20-40 years will ultimately be viewed as the most transformative period in history.<\/span><\/li>\n<li class=\"p2\">It will be ushered in by a convergence of forces: advances in science, a new general purpose technology platform, the exponential progression of technology and innovation, the digital phenomenon, and the ability to rapidly combine building blocks (combinatorial) to create value.<\/li>\n<\/ul>\n<p class=\"p2\"><span class=\"s1\">Forces at Work<\/span><\/p>\n<ul>\n<li class=\"p2\">Exponential technology progression has been driven by Moore&#8217;s Law, but clearly we&#8217;re seeing the exponential rise of innovation as well.<\/li>\n<li class=\"p2\">Those two forces have combined with societal change to create the uncertainty, speed and change dynamic in the current environment. Humans and institutions move linearly, and as such are poorly structured for future viability in an exponential world.<\/li>\n<li class=\"p2\">\u00a0The characteristics required to survive in an exponential world are not part of the DNA of most institutions.<\/li>\n<\/ul>\n<p class=\"p2\"><span class=\"s1\">Innovation Accelerators<\/span><\/p>\n<ul>\n<li class=\"p2\">The acceleration and convergence of the digital platform with a growing list of innovation accelerators spawns a mounting number of disruptive scenarios that collectively, even if they each play out 10%, are massively disruptive.<\/li>\n<li class=\"p2\">Leaders must start thinking about the impact of these scenarios, sooner rather than later, to begin to understand opportunities, risks, and potential responses.<\/li>\n<li class=\"p2\">The key skills for future leaders are scenario, ecosystem, and exponential thinking, seeing around corners, iterative strategy, foresight, and rapid experimentation.<\/li>\n<\/ul>\n<p class=\"p2\"><span class=\"s1\">Disruptive Scenarios<\/span><\/p>\n<ul>\n<li class=\"p2\">When you look at disruptive scenarios like the connected car, the Smart Home, or Connected Healthcare, it is clear that we are shifting from a vertically oriented, value chain world, to a horizontal ecosystem world.<\/li>\n<li class=\"p2\">Firm-centric thinking is a major obstacle for companies that must shift to an ecosystem thinking paradigm.<\/li>\n<li class=\"p2\">However, thinking in the context of value creation and capture across an ecosystem of stakeholders (ecosystem model) is challenging, and fundamentally different than the current firm-level (business model) perspective.<\/li>\n<\/ul>\n<p class=\"p2\"><span class=\"s1\">Future of Work<\/span><\/p>\n<ul>\n<li class=\"p2\">Famous economist Jeremy Rifkin believes we are moving closer to a Zero Marginal Cost society, where our current notion of work changes dramatically.<\/li>\n<li class=\"p2\">Andrew McAfee in his work on the \u201cThe Second Machine Age\u201d believes we are heading towards a world where people will no longer need to work. Even knowledge work, once believed to be something that only humans could do, will be automated in the future.<\/li>\n<li class=\"p2\">Many like McAfee believe a Government-provided living wage is on the horizon.<\/li>\n<\/ul>\n<p class=\"p2\"><span class=\"s1\">Digital Platform<\/span><\/p>\n<ul>\n<li class=\"p2\">The digital platform (social, mobile big data, Cloud) represents the third platform (mainframe and client-server being the first two).<\/li>\n<li class=\"p2\">On its own, this platform is massively disruptive. When combined with innovation accelerators like renewable energy, 3D printing, cognitive computing, the Internet of Things, robotics, and others, this third platform becomes a general purpose technology platform that ushers in the most transformative period in history.<\/li>\n<li class=\"p2\">General purpose technology platforms must have three components: energy (renewable), communications (internet), transport and logistics (IoT, 3D printing, autonomous vehicles, etc.).<\/li>\n<li class=\"p2\">\u00a0The last two general purpose technology platforms were: Industrial revolution One: energy (steam engine), communication (printing press), Transport (railroad); Industrial Revolution Two: energy (oil), communication (telephone), transport (car, highway).<\/li>\n<\/ul>\n<p class=\"p2\"><span class=\"s1\">Law of Disruption<\/span><\/p>\n<ul>\n<li class=\"p2\">The law of disruption states that while technology progresses exponentially, businesses change incrementally.<\/li>\n<li class=\"p2\">This creates a gap for killer apps that the market rushes to fill.<\/li>\n<li class=\"p2\">This gap is getting wider, and the opportunity for low cost new competitors and market entrants is growing. Incremental business change is no longer sufficient.<\/li>\n<\/ul>\n<p class=\"p2\"><strong><span class=\"s1\">Thornton May<\/span><\/strong><\/p>\n<blockquote>\n<p class=\"p2\">\u201cWhen it\u2019s steam engine time, people will invent steam engines\u2026.major innovations occur not when an inventor is struck by a bolt from the blue, but when the scientific and social conditions are ripe.\u201d (New Scientist)<\/p>\n<\/blockquote>\n<ul>\n<li class=\"p2\">Humans have been living in a \u201cTransformative Time\u201d for the past 600 years.<\/li>\n<li class=\"p2\">What is surprising to this futurist is that even with 600 years of \u201ctransforming\u201d under our belts, most executives feel like this is their first transformation.\u00a0This is a good time for leaders to start transferring lessons learned in past transformations to the current circumstance.<\/li>\n<li class=\"p2\">In times of transformation, never, ever believe you are in a mature industry.\u00a0There are no mature industries, only mature managers who unthinkingly accept someone else\u2019s definition of what is possible.<\/li>\n<li class=\"p2\">\u00a0In many modern organizations the concepts of \u201cleadership\u201d and \u201cmanagement\u201d have been conflated.\u00a0\u201cLeadership\u201d and \u201cmanagement\u201d ARE NOT synonyms.\u00a0\u201cManagement\u201d is all about getting \u201cthere\u201d.\u00a0\u201cLeadership\u201d is all about figuring out where &#8220;there&#8221; is.\u00a0Transformational leadership means that today\u2019s \u201cthere\u201d is going to be fundamentally different than tomorrow\u2019s \u201cthere.\u201d<\/li>\n<li class=\"p2\">Leaders effect transformational change\/survive transformational epochs by creating a new vocabulary to talk about \/think through a totally new reality.\u00a090% of the Global 2000 is adopting a business as usual posture.\u00a0They of course don\u2019t say this. But this is how they behave.<\/li>\n<li class=\"p2\">LESS THAN 10% of enterprises have actually commissioned a real, new IT strategy \u2013 where they have gone off site; have gotten their people together and crafted a REAL IT strategy.\u00a0Real IT strategy making takes time &#8211; probably no less than six months.\u00a0Real IT strategy is both a top-down and bottoms-up process.\u00a0Real IT strategy requires stepping back and really thinking about what the world of the future will look like.\u00a0Most of the exercises currently being touted as \u201cIT Strategies\u201d are, quite frankly, nothing more than tweaking or updating in-place annual budgets.\u00a0\u00a0\u201cAnnual budget\u201d and \u201cIT Strategy\u201d have conflated.\u00a0\u201cBudgeting\u201d and \u201cstrategy making\u201d are not synonyms.<\/li>\n<li class=\"p2\"><span class=\"s1\">\u00a0Things are converging\/combining.\u00a0<\/span>George Gilder, another digital revolutionary, observed that \u201cthe computer industry is converging with the television industry in the same sense that the automobile converged with the horse, the TV converged with the nickelodeon, the word-processing program converged with the typewriter, the CAD program converged with the drafting board, and digital desktop publishing converged with the linotype machine and the letterpress.\u201d<\/li>\n<li class=\"p2\"><span class=\"s1\">Groupthink:\u00a0<\/span>\u201cMost people in an industry are blind in the same way. They are all paying attention to the same things, and not paying attention to the same things.\u201d\u00a0At the start of any transformation there will be a lot of competitors. For example, In 1837, upon the suggestion of their father-in-law, William Procter and James Gamble joined forces in a partnership.\u00a0The candle and soap industry they entered that year was highly competitive, with\u00a018 direct competitors in the Cincinnati market alone and many more across the country.<\/li>\n<li class=\"p2\"><span class=\"s1\">The leaders who emerge from transformational times successfully tend to be what business school professors call \u2018situational\u2019 heroes: o<\/span>rdinary people anointed by their peers in recognition of their behavior.<\/li>\n<li class=\"p2\">It is not the change that matters. It is how you behave related to the change that drives outcomes.<\/li>\n<\/ul>\n<p class=\"p2\"><strong><span class=\"s1\">Timo Elliott<\/span><\/strong><\/p>\n<blockquote>\n<p class=\"p2\">\u201cFirst time in history, the world\u2019s leading experts on accelerating technology are consistently finding themselves too conservative in their predictions&#8230;\u201d(Steven Kotler)<\/p>\n<\/blockquote>\n<ul>\n<li class=\"p2\"><span class=\"s1\">\u00a0Technology change has never really been about the technology, and that\u2019s truer than ever.\u00a0<\/span><span class=\"s1\">The technology is now the easy part.\u00a0<\/span><span class=\"s1\">The hard part is actually knowing what to do with it.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">One of the biggest things organizations are struggling with is that the possibilities seem so endless that they don\u2019t know where to get started.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">It\u2019s obvious to everybody that there have been big technology changes.\u00a0<\/span><span class=\"s1\">Gartner calls Social, Cloud, Analytics, and Mobile the \u201cnexus of forces\u201d, Forrester calls it \u201cthe Third Platform\u201d.\u00a0<\/span><span class=\"s1\">I tend to prefer the acronym, \u201cSCAM\u201d \u2014 but of course, it\u2019s not a scam \u2014 it\u2019s a massive opportunity to do business in new ways.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">The easiest\u00a0and most immediate opportunities are in four areas:\u00a0<\/span><span class=\"s1\">getting closer to customers;\u00a0<\/span><span class=\"s1\">empowering and inspiring employees;\u00a0<\/span><span class=\"s1\">optimizing resource use in real time; and\u00a0<\/span><span class=\"s1\">taking full advantage of the new networked economy.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">Doing these things right means cutting across traditional organizational silos.\u00a0<\/span><span class=\"s1\">Managing the required process and cultural changes is harder and more important than the technology implementation.\u00a0<\/span><span class=\"s1\">The biggest barrier to innovation is usually the complexity of existing technologies and processes.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">Companies that can simplify their technology platforms, to enable more flexibility, will have a massive advantage for the next wave of innovation.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">The next wave is the big one.\u00a0<\/span><span class=\"s1\">So far, we\u2019ve only talked about using the new technologies that are available today.\u00a0<\/span><span class=\"s1\">What\u2019s really new is that the acceleration of technology change is threatening to destabilize the \u201cnormal\u201d innovation cycle itself.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">There\u2019s increasing evidence that we are now in the \u201csecond half of the chessboard\u201d, to use Ray Kurzweil\u2019s phrase.\u00a0<\/span><span class=\"s1\">By Persian legend, the King offered a reward to the inventor of chess.\u00a0<\/span><span class=\"s1\">He asked for a single grain of rice on the first square of the chessboard, two on the second, four on the third, eight on the fourth, and so on. The King thought he was getting a bargain, and agreed.\u00a0<\/span><span class=\"s1\">But through the wonders of exponential growth, the actual amount of rice you\u2019d need would be about 1,000x the annual global production of rice today, a pile larger than Mount Everest.\u00a0<\/span><span class=\"s1\">What does this story mean to us? It means that we now see more real technology change in a single year than we used to in an entire decade \u2014 and we need new ways to deal with that change.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">As the technology gets more and more powerful, people start to become more and more important.\u00a0<\/span><span class=\"s1\">A good analogy is with special effects on film.\u00a0<\/span><span class=\"s1\">It used to be incredibly hard and expensive, so it was only available to the best directors.\u00a0<\/span><span class=\"s1\">Now anybody with a PC is able to do spectacular special effects &#8211; but that doesn\u2019t make them Steven Spielberg.<\/span><\/li>\n<li class=\"p2\"><span class=\"s1\">Above all, it\u2019s not about having long term plans about the future.\u00a0<\/span><span class=\"s1\">Everything is changing so rapidly that what you really need in your corporate DNA are the genes that allow you to see and understand change early, and the organizational and technical flexibility to respond.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Listen to futurists discuss how today&#8217;s organizations can survive digital transformation. <\/p>\n","protected":false},"author":2,"featured_media":12813,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[7],"tags":[382,398,512,517,618,1082],"class_list":["post-12466","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interviews","tag-digital","tag-disruption","tag-futurist","tag-game-changer","tag-innovation","tag-transformation"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2015\/07\/game-changer-radio-on-air-2.jpg?fit=608%2C456&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p3X9RF-3f4","_links":{"self":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts\/12466","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/comments?post=12466"}],"version-history":[{"count":0,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts\/12466\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/media\/12813"}],"wp:attachment":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/media?parent=12466"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/categories?post=12466"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/tags?post=12466"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}