In one of their recent articles on business transformation the researchers at Prophet have called them by name: 60-80% of digital transformation projects are doomed to failure from the start. Not only do they miss to set clear goals, but they are badly set up from the outset.
The problems are comprehensive and range from shortness of breath (as soon as the first problems arise, a full stop is applied), silo thinking of divisions to blind flight (no clear and/or coordinated goals). In a world where the speed of digital change presents us with new challenges and serious changes every day, most projects are a waste of valuable resources such as money, work and – above all – time.
In recent years new business models, applications and information have created the fastest innovation cycles in history. The change of traditional companies and business models has become pivotal for the survival of our society.
VW boss Herbert Driess summed up the situation excellently in a storming speech to his team:
“We need a shared understanding of the radical nature of change. In the magnitude of our task. … and in the short time frame.”
The storm has just begun. The change in our economy (business models, applications, data & information) must be fundamental and exceptionally fast to compete in the future markets if we want to avoid a collective Nokia moment in Europe. We must step on the gas. We have to tackle things. Take on new markets and options with courage. However most traditional businesses observe them with fascination, inactivity or in worst case ineffectual activism.
The actions in the market
Two major actions can be seen in this regard in the business community:
First, an external focus on change – such as external Innovation Labs, Company Builders, Incubators, etc. The problem is that this way the change and innovation power hardly reaches the traditional business at all. The organisation remains in a kind of observation role and the impact for the bigger business is often negligible. For the time being we see how the Innovation Labs are becoming the next targets of the red pen and head quarters are trying to solve the task in more condensed versions. New ideas will be sought by internal scouts or new projects will be implemented by strategic functions – coming with the whole ballest of the organisation, slowing change down while the new markets are running away at a gallop.
On the other hand, some put an internal focus on change. Many have tried to give their employees the founder gene. Intrapreneurship programs, the training of new skills such as Design Thinking, the introduction of new processes such as Scrum or working with OKRs shall provide the necessary boost. But this does not seem to be the right way to ignite innovation power for the core business, too. Learning new skills and the use of modern processes are important drivers, but their effectiveness is limited. The structure, hierarchies and embedded culture of the organization simply counteract this.
These new approaches usually feel like a passing fad and the solutions developed here are on the back burner because they simply don’t want to ignite any real power. Frustrated board members increasingly refuse to release initiatives.
Without the access to the digital and cultural change outside the haze of our corporations we will not be able to keep up with the change.
A plea for Shared Transformation
We must understand that the new companies of the last 20 years have completely different assumptions about value creation than the established companies in our society. To compete with them effectively, it is necessary to drastically rethink value propositions, products, services and customer experiences – almost on a daily level. This contrasts with the natural demand of organisations for scaling and building effectiveness and efficiency. It requires a completely different knowledge and culture – 24/7.
The required skills and thinking exist in the many creators and thought leaders of the new businesses and technologies. We just need to build bridges to these people and find ways, how to apply and wove their expertise into the DNA of businesses.
In order to successfully and quickly bring innovation and transformation we need to share the responsibility for the change among the old and new economy. We need to involve external movers and shakers, including those who cannot be harnessed to a corporate cart and are independent of a business relationship with them. We need to access their genius. We need permanent bridges to them to enable a new way of exchanging ideas and approaches. We need a marketplace of knowledge where business can invite the necessary complementary expertise to their companies at any time.
We need a shared transformation between corporations and the movers and shakers in our society.
How does it work?
- Every traditional business should have its’ own (curated) business think tank composed of thought leaders from the new fields of business, science, technology and arts – and from their own organisation.
- The experts need to be pre-qualified based on their expertise and communicative skills.
- You design a collective intelligence based on the specific needs on a project by project level.
I have been working on this model over the last ten years and implemented it successfully for big corporate organisations. The results?
A significant increase in the success rate of our projects – reaching 72% instead of the average 20-40% in the market.
And we have been able to speed up our projects by 10-20%. If you like to find out more, you should watch our presentation covering the details around how we set up the process here.
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