Adopt digital transformation to Test’ philosophy to quickly abandon, pivot, or continue…
To give and deepen our discussion on digital disruption (see our last post on the notion of Future Surfing), let’s look at how you can leverage digital technologies and mind-sets to make start up business opportunities within highly complex environments.
We’re surviving in a so-called “VUCA world”: characterised by Volatility, Uncertainty, Complexity and Ambiguity. Across almost all industries, we’re seeing product lifecycles shortening, technology change accelerating, and customers demanding ever-greater value from businesses.
In studying decision-making in VUCA environments, British organisational theorist Professor Ralph Stacey notes that with longer product cycles and little technological change, it’s possible to be rational and measured with their investments. We now have enough time to construct comprehensive business cases, and run proof-of-concept and proof-of-value programmes, once we develop standardised services in fairly static markets. We could “prove” the project before we begin.
However in VUCA environments, where product cycles are short and technological change is fast, having a traditional way of decision-making actually turns into a liability – potentially costing time, money and lost opportunity. Variables replace constants as our decision-making factors.
Within this complex environment, decision-makers require to use Invest to check.
Invest to check can be a dynamic approach… Focus on some well-founded assumptions, but remember that however confident you could be, they’re still only assumptions. Invest the littlest viable quantity of resources (financial, human capital, intellectual etc) in building real-world prototypes and services that can reliably test these assumptions. Here you’re looking to make variables “constant” (at least for a time).
Let’s assume, as an example, that the customers i would love you to quote competitor prices when presenting quotes for them. Don’t immediately dismiss this as irrational or despite best-practice. Test the idea: develop a prototype experience and give it to 50 of one’s most loyal customers. Ask for their feedback… Could it be as useful because they believed it would be? Can it increase trust and loyalty within the brand? Does it improve the customer experience? Would they be willing to buy such a service?
It’s necessary to ask the best questions, to stress-test your assumptions and decide whether they’re valid.
From this point, there are three options: to abandon the merchandise or feature, to pivot it (re-cast it as something slightly various and test again), in order to continue with further incremental investments and cycles of user feedback.
Rapid response is ‘not necessarily’. In precisely what your company does, we have to draw a clear, crisp among two approaches:
Future-Proofing… fast-following your competition by looking into making sure you’re aware and ready for industry change, positioned to quickly conform to new demands, but not indeed being the catalyst for change.
Future-Surfing… even as introduced inside our last blog, this can be about actively using the find it hard to your competitors and inventing entirely new approaches to solve customer pain points.
Interestingly, in McKinsey’s ‘The case for digital reinvention’ report, the analyst firm showed that fast-followers (future-proofers”) saw the average 5.3% revenue uplift when compared to the competition. The real disruptors (“future surfers”), however, enjoyed a 12.3% revenue improvement.
But the real goal is to merge both strategies in your organisation, using each one of these where it makes one of the most sense. For instance, you could apply future-surfing for the core aspects of differentiation, and future-proofing for those more commoditised places that you’re not planning to tell apart yourself. Adopting both strategies, and executing them well, `could generate revenue uplifts of up to 18.6%, based on McKinsey.
For details about business transformation visit the best internet page.