Rewriting the Transformational Playbook
The world around us is rapidly changing, and forging a new reality for businesses and consumers alike. Led by a technological shift unlike anytime in modern history, industries are facing new technological and economic forces that will define how they compete and survive in the new digital age. In this decade alone, we’ve witnessed the rise and fall of large, recognizable businesses due to a common theme that determines the fate of many industries — disruption.
From the steam engine, to the automobile, to the internet-connected mobile device, technology has always served as the disruptive force that can advance society and industry, but also undo longstanding businesses. Companies that have understood and adapted in the face of disruption, are often the organizations we see peppered throughout the Fortune 500. Those who failed to respond to disruption are often those confined to the history books.
Against this backdrop, there is a way to defend against disruption that comes paired with opportunity. By embracing the new technologies that will forge our future, businesses can overcome disruption and position themselves to play leading roles in the digital economy. At its core, we are describing digital transformation – the investment in and adoption of modernized infrastructure, automated platforms, and transformed workforce models that position businesses to innovate and outpace would-be competition.
Unlike historical IT trends that pressured IT decision makers to better serve the business, today’s disruptive forces are putting pressure on the entire organization. While IT is asked to provide a stronger, more seamlessly productive experience, the business seeks methods to bring products and services to market with greater speed and agility. These objectives are no longer exclusive from the other. Today, the entire business must accept the challenge as one broad business initiative. By grabbing the reins together in partnership, IT and the business can advance company growth.
The prioritization of digital transformation is not new, and its urgency will only escalate in the future. It’s a fundamental conversation I engage in every day with customers, including those who have begun their transformational journey or are at a crisis point and in need of the strategic guidance to break their paralysis. That is our Dell EMC Services Consulting mission: to help customers that may be gripped with technical uncertainty, or seek the strategies to modernize their processes, to achieve their optimal business outcomes. In the end, business leaders know they will need to catch the next wave of progress or risk being pulled under by disruptive undertow.
Industry data reinforces the dilemma. According to the recently released ESG 2017 IT Transformation Maturity Curve study commissioned by Dell EMC, 71 percent of global IT managers acknowledge transforming IT is critical to winning in the future, while just five percent of respondents have achieved transformation. Given the scale and speed of change around us, these statistics are worrisome but not insurmountable.
Transformation requires the courage to shake up traditional business models and break out of legacy behaviors with calculated risk-taking. Otherwise, you may find your business at a disadvantage. From the moment Henry Ford built his first automobile, history has taught us that it takes courage to change. By accepting these transformational challenges and moving as one unified front toward a modernized future, organizations will defend against disruption.
In a fascinating book written by Geoffrey A. Moore titled “Zone to Win,” Moore — one of the masters of management strategy and an author of no fewer than seven books focused on business transformation — captures the reason why many organizations are still failing with business transformation. Despite their common understanding, businesses face a crisis of prioritization.
Moore echoes the issues which I come across time and time again with those I speak to: how to achieve what needs to be done with the resources which are available. It’s a question of quantity and quality; as well as politics and power.
Those who are successful at transformation understand this is a collaborative proposition, but the vast majority still follow their current playbooks – and they no longer work. Instead Moore prescribes what he calls the ‘zone management’ playbook – whereby the enterprise is divided into four zones. These being:
- Performance zone – The engine room for operating established franchises on proven business models. The focus is on material revenue performance derived from established businesses that are sustaining the status quo.
- Productivity zone – Is home to any function that does not have any direct accountability for revenue — i.e. marketing, central engineering, HR, IT, legal and finance.
- Incubation zone – Is the need to develop fast-growing offers in emerging categories. Put simply, its goal is to get the company in the right position to catch the next wave.
- Transformation zone – Is where disruptive ideas are scaled up to become serious business offerings.
All of these must interoperate to enable an established enterprise to either disrupt its market with modernized approaches to business while maintaining its established lines; or defend itself against an up and coming player doing the disrupting.
In the coming weeks, my colleagues and I will be discussing each of these zones and how to put them into cohesive action. If you’ve read ‘Zone to Win’ or are working on your own transformational journey, where do you stand on disruption? I’d like to hear from you.