Digital business is being invented on the fly. Unfortunately there’s no pre-cut pattern for 21st-century business. In an environment without precedent, the unique competitive differentiator for enterprises will be unknown, and difficult to predict or even reliably test.
Technology has created the digital business and social worlds that billions of humans today joyously, awesomely, and at times fearfully, exploit and explore. Digital business is happening and generating far more value than expected; that much is apparent. Yet, how digital business will unfold and reveal its societal and business impact over the rest of this century remains less clear.
As you navigate your way through unknown territory, you must be armed with powerful adaptive capabilities that harness disruptive technologies and concepts to pre-empt, surprise, outpace or outmanoeuvre rivals.
Powerful "digital dragons" — companies that embrace digital disruption and use it to enter, take over and dominate markets they often didn't even play in before — are rising today. There's no safe place for the competitive enterprise. To deny, obfuscate, hide or retreat may result in disaster.
2015 saw GE launch its first new business unit in 75 years – GE Digital. Despite its scale, complexity and inevitable legacy issues, the company embarked on a bold journey toward becoming a deeply digital business. Now, it’s become a poster-child for digital transformation.
GE’s reformation strategy includes shedding major existing financial services and consumer products businesses to focus on industrial machines. Those machines will be sensor-enabled and internet-connected to generate a new set of software and analytics optimisation capabilities. This provides customers with insights that help them manage assets and operations more efficiently.
The armed and potent digital leader
Digital dragons like GE will continue to emerge from the edge of known markets and sectors: quick, silent and stealthy, yet metaphorically "breathing fire" to ignite red-hot competitive tension.
To compete with or become a digital dragon, follow three steps to arm your enterprise with qualities that will sustain it through volatile and extraordinary business cycles.
1. Flex your enterprise risk appetite
Be a bold dragon by flexing and stretching risk appetite, and being ready to initiate, avoid or deflect improbable scenarios. Competition in the digital market is global, unpredictable and adaptive, so you must learn to tolerate uncertainty. Never underestimate the potential for surprise.
Digital dragons thrive by being able to create or spot disruptive potential and act faster than incumbents or competitors. Slow moving, unprepared "digital dinosaurs" will become extinct. This isn’t because of a lack of strength, but because they’ve lost the ability to adapt.
2. Inject cognitive diversity
Inject diversity by building a talent portfolio or regular or irregular competencies. Exceptional enterprises need inspired vision executed by extraordinary talent. Whether you’re a digital leader in a novel, nascent business, or a CIO in an established aspirational enterprise, a diverse and flexible talent pool is your vital source of catalytic agents for change.
Just like many mythical dragons are amalgams of other animals, each animal adds a specific strength or capability to the dragon figure. True digital dragons combine different talent and diverse perspectives into something that is much more than the sum of their parts.
3. Create a ‘digital dragon incubator’
Successful digital leaders develop their own digital dragons by assembling prodigious "dragon incubators" with the capacity to create a competitive edge. Digital dragons get their courage and strength by having highly curious, entrepreneurial and situationally aware leaders and exceptionally adaptive capabilities.
As a leader in an enterprise that aspires to digital business success, organisational and personal metamorphosis must become your natural state. Let yourself be inspired by digital giants, like Alibaba or Amazon, for possible clues to successful practices, but don't try to replicate them. Instead, find your own unique mix of vision, values and behaviours to encourage in your environment.
Jenny Beresford is a research director with Gartner's CIO Advisory team. She will speak about CIO futures at Gartner Symposium/ITxpo in Australia, 30 October-2 November 2017. Previously, she has served as a CIO in global enterprises, held VP and GM roles in consulting and technology firms, worked as a hands-on enterprise agile coach, an innovation lead and a digital transformation director.
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