It seems this is the era of the digitally savvy entrepreneur. With the dizzy array of choices, combined with technology prowess and ‘plugging’ these into ‘seen’ customer needs, they are setting about disrupting existing businesses and establishing new ones, on an ever-increasing global scale.
So what and how is the incumbent meant to react if it is an existing market? What should they do when they realize the traditional markets where they have safely operated for years has suddenly been overtaken by a new market creation, one that has gone outside old borders in industry and product.
Markets that are in the hands of the technically savvy entrepreneur are to be sliced, diced and recombined, are providing totally disruptive approaches to existing business models. If they get the factors right, hit the needs of customers in their design, understanding, agility in responding to learning and adapting, ability to be fast to market and capable of scaling up really fast, then they transform spaces, leaving the established players desperately struggling to find answers and catch up.
The whole world of business is changing radically.
The existing organizations are failing due to their lack of agility, flexibility and ability to adapt; they always want to manage through existing systems, structures and designs. They constantly want to just simply optimize the existing and not radically redesign these. Mastering the technology, thinking in radically different ways and harnessing to this customer need is just not built into the DNA of most existing businesses. They can’t let go, they hang on to what they have got and not capable of radically redesigning, in time, to offset this digitally savvy usurper.
Within all the failures to change there still remains inside our existing organizations there is the inability to let go, to open up and share. Control still dominates. There is still this relative reluctance to form broader collaborations that will provide new ways of managing through this technology led revolution.
The Ownership mind-set still prevails, that of managing the assets, real estate, resources, value chain ‘as ours’ still dominates most board members thinking. Eventually this reluctance to not let go of large swaths of their possessions will be the death of the organization.
Changes that need to be faced in many situations need to be radical and most existing board members are ill- equipped to understand this, as they have not gained through their own experiences the skills to manage in highly fluid, entrepreneurial ways. Their careers has been built in their era of rising through the organization ranks. Growth was found through expansion, through being efficient and effective, in leveraging ‘owned’ assets, not in seeking radical reinvention.
The business world as it seems to be radically changing is exposing this weakness within established organizations. Growth has slowed significantly, it is coming from exploring risk far more, with the world the entrepreneur enters and accepts is part and parcel of the ‘play to win’ entrenched within their mentality. The established corporate executive is poorly equipped to compete in this technology age, where lean, agile and flexible are required to explore risk and new visions, increasingly critical to build and operate under.
This not only is the age of the digital savvy entrepreneur but it needs to the age where connectivity and collaboration will determine new business models that provide growth and scaling in ways not seen before and this is where the large, existing companies should be in the ascendancy here. It is where the analytic and physical meet and combine.
Managing in different ways in large organizations
Existing companies need a different game plan. A more open one built on collaborating, on leveraging, on tapping into low-cost capital presently available and pushing really hard for radically different business model design.
The closest I have as an example is GE , do really see this video, at least the 1st 15 minutes where Jeff Immelt sets about explaining the changes and how GE is currently undergoing a radical redesign. GE is radically designing its approaches around all these different links to explain their positioning on 1. digital, 2. the industrial internet of things, 3. the connected cities, 4. software and 5. an ecosystem of different partners and connected into 6. the industries they work with, all participating in this radical redesign of business and finding different solutions. In their words for instance “GE is transforming itself to become the world’s premier digital industrial company, executing critical outcomes for our customers”
External collaborations built on emerging platforms of shared need are becoming vital to change the dynamics of existing industry or service to extract growth. Addressing the needs of a global customer, demanding not just a certain uniqueness in their solutions but a recognition that their partners really work on improving the business in more connected ways where innovation, technology combine with traditional effectiveness and efficiency needs. This is requiring this partnership of global organizations to come together and provide solutions where all involved have ‘skin in the game’ and outcomes that can be measured in real growth and savings.
Large organizations all collaborating and leveraging their assets can respond effectively to savvy entrepreneurs.
This collaborative imperative need acquiring the ability to manage platforms, operate in different ecosystems simultaneously to form a significant part of forming the competitive response position to counter the young usurper, the technology savvy entrepreneur, who lacks scale, resources, existing established partnerships all vested in finding solutions and access to vital capital.
The customer is making this the “digital business era based on their needs”, where constant redesigning and orchestrating the parts will keep ‘things’ fresh and relevant. It will be consistently offering new sets of combinations and leveraging a network of diverse capabilities that businesses will grow and these come through the exploitation and exploration of technologies and diverse partnerships.
New combinations can led to real competitive advantage
It will be how and where a business or entities of business come together and see where ‘people, things and their business offering’ can come together for mutual value based on the unique combinations that serve identified customer needs with all the different technologies available and the innovative way these are combined as the value offering.
There will be a constant evolving evaluation of the assets both internal and externally that make up this digital world (people, the business and things) that will take this out beyond the control of one company. This will evolve into a system of connected ecosystems working at a constantly evolving speed to gain identification and partnership adoption. Innovation will certainly be one significant part of this, so it will not get any easier; it will be faster, more demanding and a heck of a lot more risky. Managing within collaborative platforms the innovations that are needed to ‘work and deliver’ will be complex and demanding.
Innovation is hugely caught up in this transformational change.
To be an innovator, you are always restless but the present structures and frameworks that innovation operates within have been often highly constraining and heavily reliant on existing operations. Innovation as a system has often conflicted within the approaches taken by our present organizations.
There is an urgent quest in finding different approaches to allow the human side to shape, interpret and extract the value not just in what they want to see but through different lenses. It will be through the effective leveraging of all the different technologies that will fuel the innovation activity but in these new platforms of collaboration and ecosystems required to deliver game changing or game reversing innovation offerings to counter the usurper.
What needs changing is the innovation process to accommodate these changes that are occurring all around us. We will need to transform much within our systems but more importantly to orientate our skills to receive, translate and diffuse new knowledge, in significantly different ways.
The balance in innovation activity is changing
Whole new business propositions are emerging, where technology drives the change and many established organizations we know today are powerless to stop as they are unable to adapt fast enough to transform their business model, it is far to ‘vested’
They will need to adjust radically to a new collaborative model that leverages the assets they have and combine these with partners that can deliver global solutions that can scale, require large investments and resources, something the entrepreneur struggles with and is less capable to build, unless they have such a radical set of solutions heavily protected by IP and technology prowess. Time and resources to scale can be a wicked inhibitor unless you really have a unique offering, unable to be replicated.
The need is to transform into radically different form of entity that have intelligence, innovation, customer understanding of their real needs, deep connections, global reach in technology and capability to meet market needs, delivering to each customer’s specific needs.
Managing digital knowledge that adds value and growth
Digital technology is about to become the precursor for all the changes we have put off for years within our organizations. We need to radically improve our abilities to engage, relate and discover new innovation opportunities at a completely different level of faster performance.
Technology is presently moving way-ahead of the systems our organizations have presently in place, it is failing to extract the value and insights that others are beginning to clearly see and capitalize on through the connection of technologies and market insights.
Unless larger organizations fail to see the significant changes occurring then we will see the disruption of existing organizations will simply accelerate.
Today’s established organization needs to be fundamentally redesigned.
We are in a new age, the technology age and much needs to be challenged. This is no different from the arrival of the industrial age, it changes society dramatically.
We are dealing with a completely different set of mindsets, skills, procedures, governance, processes and responsibilities. To gain from the digital evolution taking place we need a robust, comprehensive and radical overhaul of much of what is going on within our organizations or they will not survive the current revolution occurring all around us.
It requires radical thinking in new design, leveraging technology and collaborations. I watch GE and how it is radically redesigning itself, it is significant “full on, full load” . Presently it is the top of GE that is engaged in the huge change required, driving this down the organization, yet it is the organization underneath that is presently struggling to come to terms with this and the ongoing approach to business. The level of change might be underestimated within GE but these next two to three years will determine this. Many other organizations must be watching with fascination and real interest but should be citing this as an example t learn from..
I believe that many existing larger organizations will need to follow in their own ways this example of GE, by placing really big bets on connecting technology so it ‘runs through everything’ to not only stay in existence but to discover new growth paths built on technology, innovating prowess and established business that can be reassigned (realigned) to meet changing market and customer needs.
The revolution of business as we know it today is undergoing radical redesign in front of our eyes, are you watching from a safe distance, in the back seat in for the ride or in the front, driving this radically re-designed model in the real-time conditions that all pioneers face to prove it is the model of the future.