By now, every company in the world is on the lookout for the digital disruption that will threaten their existence. In study after study, executives believe that technology has either already disrupted their industry, is in the process of disrupting it or will disrupt it in the near future.
As a result, every organization is taking steps to prepare for or mitigate unforeseen disruptions. Yet in almost every industry, the disruption trend continues unabated.
Driven by a desire to get ahead of this trend, IT organizations are moving rapidly to adopt technologies and methodologies that will help them adapt, innovate and operate at greater organizational velocity. The widespread interest in and adoption of DevOps, microservices, containers, cloud, SD-WAN, low-code/no-code platforms and many other rapidly developing approaches are all evidence of these efforts.
As has often been the case in IT’s business-challenged past, however, the IT organization is once again focused too heavily on the technology and not enough on the business drivers that should be guiding decisions.
As a result, IT organizations are building strategic capabilities but creating digital blind spots in the process.
The Danger of Action
We have written extensively that digital transformation is about a wide range of trends that are fundamentally altering the landscape in which organizations operate. Digital disruptors are using modern technologies to empower fundamental changes to the customer journey, the customer experience, organizational models, engagement strategies, and nearly every other aspect of the business operating model.
These fundamental shifts demand the sort of strategic capabilities that IT organizations are now adopting. The mere adoption of these technologies and approaches, however, does nothing to either directly protect organizations from disruption or to enable them to take on the role of industry disruptor.
While organizations should be adopting these approaches, there is a subtle danger in doing so.
IT organizations are resource constrained and under unrelenting pressure to continually do more with less. In spite of this, progressive IT organizations have eked out budget allotments, reallocated precious technical resources and re-organized teams all to respond to the demand for these new capabilities.
The risk is that these actions leave IT organizations vulnerable to blind spots, as they take comfort in the fact that they are responding to the disruption risk – even though the response is incomplete.
With their limited resources focused on technology strategies, they fail to develop the additional capabilities necessary to identify risks and opportunities from a business perspective – creating blind spots that will ultimately leave the organization vulnerable to an unforeseen disruption.
Shifting to a Business Focus
The drumbeat call for organizations to execute digital transformation is the response to digital disruption – but the term itself is a source of confusion. While digital technologies are clearly powering these disruptive trends, it is not, in fact, about transforming technologies – it is about the fundamental transformation of business and operating models.
After all, digital transformation is in reality business transformation.
This fact is why the focus on more agile, collaborative, and fast technologies and approaches is important, but insufficient – and potentially even damaging – if done without business context.
When speaking to IT leaders who are in the midst of adopting one of these technologies or approaches, I often ask the business driver for doing so. In most cases, I either get blank stares or a boilerplate answer about agility, adaptability, and modernization. Rarely does someone explain how their efforts relate directly to creating some form of competitive, differentiating and disruptive business value for their organization.
Part of the problem, of course, is that IT cannot develop the connection between disruptive business value and the underlying supportive technologies and approaches in isolation. Organizations can only create the necessary business context when IT and their business partners develop these strategies in concert – something that, despite all of the talk of digital transformation, rarely happens.
Strategies to Illuminate Blind Spots
In many cases, non-IT organizational leaders are still in the midst of shifting to a ‘digital mindset.’ While they understand the risks and impacts of digital disruption, they lack the technical context to effectively chart the course forward.
This mindset gap presents an opportunity for IT leaders to step in and lead the organization’s digital transformation efforts. But to do so effectively and avoid digital blind spots, IT leaders should adopt three permanent strategies to move their transformational efforts forward within a business context.
Strategy #1: Organize and lead a series of ‘digital transformation conclaves.’
These ongoing working groups, whatever you may call them, should bring together cross-functional teams that include business, operations and IT leaders with the goal of identifying emerging risks and opportunities in a specific customer-facing business process or in a specific part of the customer lifecycle.
These groups should focus on the customer-facing elements of the organization and examine every aspect of the customer journey and the customer experience to identify shifting customer desires and new engagement modalities. The focus should not be on ‘improving’ anything, but rather to examine and explore where there are either opportunities to disrupt or risks of disruption.
Strategy #2: Tear down operational models and ‘start over.’
A CIO I interviewed recently conducted a week-long retreat in which the IT executive team came together with the goal of rebuilding the IT organization from scratch.
The CIO told the executive team that they would have jobs at the end of the process, but that otherwise they were to rebuild the IT organization, driven by business needs and demands, as if they were a brand-new organization.
The result was a wildly different structure, highly attuned to helping the organization become a disruptive force. IT leaders can help their organizations use this process across the enterprise and repeat it periodically on an on-going basis.
Strategy #3: Find Your ‘Kodak Moments’
Kodak is now infamous for the fact that they developed the first digital camera, but failed to realize its importance or disruptive potential. While many people think that disruption occurs because large organizations fail to innovate, that’s rarely the problem.
Like Kodak, many companies create a stream of new innovations. What they often lack, however, is the ability to either understand their disruptive potential or to overcome organizational inertia to give them life.
IT leaders should help establish and lead an ongoing process that seeks to scour every corner of the enterprise to identify innovations and product developments that may lead to disruptive risks or opportunities. IT’s unique understanding of emerging technologies, combined with an understanding of their organization’s fundamental business drivers, put them in an excellent position to lead this process.
None of these strategies – or any strategy – will eliminate all blind spots and risks. They will, however, begin reshaping the organizational culture into a continuously adaptive state that is always looking for disruption risk and opportunity.
Moreover, these strategies will help organizations respond even if they are unable to identify the disruption risk. Adopting these strategies on a continual basis will have the effect of keeping the organization always bouncing on the balls of its feet – ready to bob and weave to handle any unforeseen event.
Founder & Institute Fellow
Charles Araujo is a technology analyst and internationally recognized authority on the Digital Enterprise and Leadership in the Digital Era who advises technology companies and enterprise leaders on how to navigate the transition from the Industrial Age to the Digital Era. Having spent over thirty years in the technology industry, he has been researching Digital Transformation long before it became the uber-buzzword of today, and is now focused on helping Digital Era Leaders prepare themselves and their organizations as the macro trends of the primacy of the customer and the primacy of the algorithm collide, ushering us into what he calls The New Human Age.
Principal Analyst with Intellyx, founder of The Institute for Digital Transformation, author of three books, and most recently the co-founder (with his wife) of The MAPS Institute, he is a sought-after keynote speaker and has been quoted or published in CIO, Time, InformationWeek, CIO Insight, NetworkWorld, Computerworld, USA Today, and Forbes.