Fostering Digital Transformation in 2021
Throughout history, after a global crisis, a new era of thinking begins. As we look to the future, an abundance of potential worlds opens up in front of us. Some are exciting, some are scary, and all of them are largely unexplored.
What leaders will do this year will define the rest of the century.
I had the pleasure to share my thoughts during an interview with Speakers Spotlight agency in Toronto.
You work closely with leaders across many industries as their trusted digital transformation strategist. Tell us a little bit about what that means to you.
Digital transformation is no longer a “nice to have” but a “must have” to future-proof business. Digital transformation requires rethinking how work gets done, who does it, and how consumers engage and experience it all.
The focus is on building the foundation for resilience and agility, that will continuously evolve to adapt to a constantly changing reality.
In many ways this means creating new potential areas for your business. Even beyond a new product or service, it can be an entire market. A great example is Amazon coming out of E-commerce retail, then they went into logistics, then they went into Amazon web services. That was the biggest transformation for Amazon over the last decade with amazing profits. Everybody at the beginning thought that they were crazy for venturing out of their safe space (E-commerce). But Amazon had the long-term perspective to build these new initiatives and it’s not just a coincidence that they have a real culture of innovation.
There’s a lot of things we can, and should, criticize about Amazon, but one thing is clear. They are world class at innovation and they’re world class at systematically creating these kinds of transformations.
Why entrepreneurship is so important now, not just in the start-up world but also for corporations?
I like to split the world inside a company into two areas. One is exploit, this is managing your existing business, and then explore, which is really the world of ideas and the foundation of the future of your business.
These two worlds are very different. When we exploit our business, we are essentially managing the existing, improving the business you already have. That’s a linear process where uncertainty is not so high because we know the customers, we know the business model, etc.
The problem is when you disrupt it, you kind of end up in a place where you need to explore new opportunities, where uncertainty is very high. If we learned anything from 2020 it’s that it’s not enough to just manage the existing anymore, because when you get disrupted, you better have something new coming up.
So, we need to embrace a culture of experimentation; where we continue to run our existing (robust) business, while at the same time continually applying an entrepreneurial mindset to explore new ideas and set the foundation of our future.
And we need to disrupt the myth in entrepreneurship and innovation that it’s all about the right idea. Because in reality you need to invest in several ideas (projects), to get one that will succeed.
Is there a way to create a disruption proof company?
Absolutely and that’s your ability to become world class at exploration. Just like most companies invest in managing their business and in operational excellence, you also build up a world class exploration capability.
We often see that when things are going well, leaders don’t feel that they need to take the time to think strategically, and when they are in trouble, they don’t have the time for it! The crucial thing here is to remember that having an explore and exploit strategy is key for running your business today AND in the future.
My favorite example is Ping An, a Chinese company that was initially a finance and insurance conglomerate. The founder, Peter Ma, said, “We’re going to die. Technology companies are going to kill us. Our business model is dead.” So, they decided to strategically invest in becoming a technology company. 10% of their profits, 1% of the revenue. He also hired a co-CEO, Jessica Tan, who was responsible for exploration excellence. So, investing in the future.
If you don’t give innovation (exploration) power, you don’t put it at the same level of execution, you will never build a resilient company. So resilient companies are those that invest as much in exploration as they do in execution and that is still very rare.
This interview was originally published on Speaker’s Spotlight blog.