The digital tornado is affecting all organizations and industries

Iris Maier

Iris Maier

October 5, 2018

Today's world is changing radically as a result of digitalization. We have to adapt to new circumstances faster and faster - our environment is changing at breakneck speed. Our organizations must learn to quickly formulate hypotheses and verify them in the market using rapid prototypes. This is known as the MVP, the Minimum Viable Product. Everyone - not just the manufacturing industry, but also all service providers (public and private) - must face up to the new challenges and tackle them themselves. In short, they must learn to become fast, flexible and agile. Where to tackle and start? How should this be done? What foundations, some of them new, need to be laid in order to change the transformation of our "businesses" under our own steam and, in some cases, to reshape them? What concrete experiences are there? Which tools, frameworks and templates can help us to proceed effectively and efficiently? Established companies in particular are facing an exciting challenge.

The digital tornado captures all

Change (disruption) has long since begun. What distinguishes an innovation from a disruption? It's quite simple: Disruption as "The Innovator's Dilemma".

Clayton Christensen: Theory of Disruption (1997)

Regardless of how established and successful a company is, sooner or later it will be threatened by a revolution that threatens its very existence. This observation is based on the Theory of disruption which was developed by Harvard graduate Clayton Christensen in 1997. Christensen nevertheless describes this disruptive process as necessary for the market to continue to function and develop. I can confirm this with my experience, particularly in the ICT sector. As co-author of the book "mCommerce" (published by Addison-Wesley in 2001), my colleagues and I were already describing and anticipating the major business and change potential in eCommerce and, much later, mCommerce.

Disruption poses a particular threat to large companies whose original business basis was radical innovation. The companies affected are primarily based in the technology sector and, according to Christensen, are inevitably subject to the disruptive process: It is almost impossible for these companies to fundamentally overturn their business model. The situation is different for start-ups: they have comparatively high profit prospects while having little to lose. According to Christensen, they are the only ones who can take this risk.

Proactive design - that's my motto. And yours?

Christensen is right about some things, but not everything. Fortunately! - Many large companies are trying (some desperately) to plant a start-up mentality and accompanying processes into their large ventures. Some with great success, others with less success.

In fact, we can only marvel at the developments around us:

  • The largest cab company in the world does not own cabs (Uber)
  • Largest accommodation provider does not own a property (Airbnb)
  • Large telephone companies do not have a telco infrastructure (Skype, WeChat)
  • The world's most valuable retailer has no inventory (Alibaba)
  • The most popular media do not create any content themselves (Facebook, YouTube)
  • The fastest growing banks have no current money (SocietyOne)
  • The world's biggest movie house has no cinemas (Netflix)
  • The largest software manufacturers do not write the apps (Apple, Google)

Here is a brief insight into the world of VUCA - it's well worth it:

(Source: YouTube)

Results of the "Digital Transformation 2018" study

Another exciting insight into the current situation of companies is provided by the study "Digital transformation 2018" by etventure in collaboration with GfK. Almost 2,000 large companies were surveyed for this representative study - the results clearly show the current perception in Germany.

The following answers were given to the question: "In your opinion, what are the biggest hurdles to digital transformation in your company?"

Study, digital transformation 2018, biggest hurdles in digital transformation, survey, responses from decision-makers, digitalization, business challenges, digitalization challenges, market disruption, securing future viability, proactively supporting your own company, TCI, Transformation Consulting International GmbH
The biggest hurdles to digital transformation from the perspective of decision-makers in companies. (Image: © Study "Digital Transformation 2018", p. 12)

As a result, companies are well advised to face up to the digital transformation today and learn to think and act in an agile manner in order to remain competitive.

To the point and proactively further...

We are living in a time of rapid change. Digitalization is progressing inexorably. The world is volatile, uncertain, complex and ambiguous (VUCA world - Volatility, Uncertainty, Complexity, Ambiguity). What was applicable as a solution template yesterday no longer has to work today. Decisions have to be made without being able to fall back on historical data. Competition has become more international as a result of globalization. The dominance of the industrialized nations is over, that is crystal clear and unambiguous. All continents have now appeared on the playing field.

Due to the technological, social and political changes of the last 40 years, we have unimagined opportunities to change, realign and reinvent ourselves (as individuals), our work and our business models as well as our society. There is no simple "business as usual" - organizations and people are challenged to become faster, more flexible and more agile.

The robustness of our business models has long since disappeared. Even our "giant tankers" in the automotive industry have recognized this. The magic word "mobility" is the order of the day - with many additional, new and different business models and products. Who would have thought this possible? Not me, to be honest.

These organizations place and have always placed value on reliable execution. It has become clear to all of us, and it feels as if it has been handed to us on a silver platter: our economic and social environment is changing - we are increasingly living in a VUCA world. Recently, the pace of innovation has increased radically and is increasingly leading to disruptive situations that challenge our own business model.

Impulses for your proactive implementation

... to simply be able to react more quickly to changes, together with motivated employees. So take the following three points and think about a personal to-do for your working environment. The next four weeks are for implementation:

1. customer centricity

Involvement of customers through intensive cooperation.

2. agile+lean - agile working: First small steps...

Take project/department goals that nobody really has time for, but which are important. Make a Kanban board (simply on the wall or door), per task card (what needs to be done/ who already has experience or has worked with it); select the most important ones in the To-Do section - time horizon 3 months; the employees now take a card independently and voluntarily, take the lead and solve the task with the "experienced" or additional employees - the card then moves to "In progress"; at some point it is finished, the result is briefly presented to everyone in the stand-up meeting and goes into the "Done - Done" column. Important: The cards remain visible in an area where everyone always passes by! The positive effect fizzles out too quickly electronically.

You will see: Everyone is proud of it and has fun. Really brilliant.

3. digitalization - influence on strategic and operational work

Ask yourself the question: What have I been noticing for a long time where we are working with process optimization and Digitization create direct or indirect added value for the customer? Then draw up a project proposal, tip your result into the company suggestion scheme, put it on the agenda at the next department meeting for a 360° view, or... Get involved where you are! It's fun, helps you personally, your team or department and your entire company.

Further ideas for proactively supporting your company

The next points for your to-dos in your personal working environment are in the next article:

  • New organizational mechanisms
  • Transformation to a "learning organization"
  • New management principles - keyword "servant leader"
  • Rethinking communication
  • Participation of employees and servant leaders.

So stay tuned!

Dealing with the digital tornado correctly

I invite you to stay on the ball and tackle your personal to-dos. Or would you rather join the conclusion of the etventure study "Digital Transformation 2018" and stand still? The conclusion of the 2018 study was:

Many company managers (and employees, author's note) are not yet aware of the scope of digitalization. Everyone is talking about digital transformation, but companies are still finding it difficult to actually implement it. [...] there is a lack of courage and creativity to break out of old ways of thinking and working, to rethink things from scratch and to take radically innovative paths. But this is precisely what is needed to be successful in the digital transformation in the long term.

In the next few blog posts, I would like to explain what this means in plain language and which principles, methods and frameworks can be behind it in order to support you in your change.

The article was written by Iris Maier and Marcel Weber ( 2018) was created.

(Cover image: © SFIO CRACHO | fotolia.com)

About the author

Iris Maier

Iris Maier

As an agile coach, trainer and expert in lifelong learning and hybrid project management, Iris Maier supports her clients in change and transition projects. With her extensive experience (IT and leadership), she brings a wealth of best practice experience to every project.

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