- Is your business prepared for continuous digital transformation?
- Is the business innovative enough to embrace the change that digital disruption brings?
- Is your business model equipped to be successful with new digital propositions?
- Does the business have the right people in the right places to deal with digital transformation quickly? Do you even know what the right people look like?
These are just some of the questions that business leaders raised during our recent interviews as part of our “The Digital Wave”* European research project. During our research, we spoke with over 100 leaders of businesses across Europe about their experiences of digital transformation. The questions above highlight just a few of the common challenges that they now find themselves facing.
Keeping up with the pace of change can be overwhelming
Digital disruption is prompting many businesses to re-imagine the way that they do business, the propositions they offer and the customer connectivity they require. For traditional/analogue businesses, keeping up with the pace of the change is often overwhelming. Competitive edge is lost quickly with such a fast pace of change and customer demands are moving at a rapid speed. For some, their market places are becoming obsolete, forcing them to create new propositions and business models.
It appears that no sector or market is safe from the influences of digital changes, from retail to healthcare, digital disruption should be a consideration for all business leaders. Despite this urgency, it appears that few businesses are making the, often bold, moves required to adapt their current proposition (less than 16%**).
New markets + new propositions require new operating models
The disappearance of markets, means that businesses are needing to adapt their propositions, and therefore business models quickly. For example, a book publishing organisation in the UK recognised that their market was disappearing due to e-books and online journals. They were growing effectively thanks to successful acquisitions, however, their digital strategy which aimed to move them into adjacent markets called for extensive business transformation. They found that not only did they need to change their business model to incorporate e-books and distribution but they also needed to consider the cultural ramification of such a change. OE Cam aided the consideration of the people aspects associated with the transformation, for example, changing the mindset of their leaders and employees in buying, selling, technology and people management perspectives. With digitalisation projects, as with all business transformation, the need to deal with capability and culture early is paramount for success.
With digitalisation projects, as with all business transformation, the need to deal with capability and culture early is paramount for success.
Creating business models for successful digitalisation
OE Cam’s experience in dealing with business transformation and recent research identifies many considerations for building successful business models for digital transformation, for example:
- Review of capabilities within your key roles – are they appropriate for the new market or proposition? As digital transformation increases, the capabilities, knowledge and skills are likely to change focus both behaviourally and technically.
- The structure of the business may need to take account of the change in decision-making process and more collaborative working styles. Autonomy and control have a newly defined balance with autonomy being made possible by the structure. For example reduction of hierarchy to a project/agile structure allowing collaboration and easy knowledge sharing.
- The mindsets of leaders will need to shift to enable a pace of change which reflects that enabled by digital transformation. As our research report outlines (Pg. 24) it is important to synchronise the inner and outer clocks, ensure openness to new experiences and facilitate socialisation beyond internal stakeholders to those outside of the organisation.
* “The Digital Wave: Surfing through digital chaos for successful transformation“. European research report from OE Cam and SPACE Consulting (2017). SPACE Consulting Europe is a strategic alliance of leading European management consulting firms. We help organisations work more effectively to deliver their strategy by improving their behavioural, cultural, structural and economic dimensions. SPACE operates in nine offices across Europe, with more than 250 consultants, for both public and private organisations.