• February 16, 2016

Defeat the Change Monster to Enable Enterprise Transformation

The accelerating pace of technological change is setting up a pivotal confrontation. It’s the battle between the inevitable force of technology disruption and the immovable object of the inability to change. Patrick Forth of the Boston Consulting Group calls this rigidity the “change monster.” And it can wreak havoc within even the strongest enterprises facing digital transformation.

We are in the midst of one of the most revolutionary technological shifts in history. Consider these elements: In 2014, workload in the cloud surpassed that performed in traditional IT environments. That workload ratio will be two-thirds cloud to one-third traditional IT in 2017. Currently, more than 3 billion people are connected to the internet. That number will soar to 4 billion by 2017. We’re connected as consumers; we’re connected as businesses.

Mobile Connections

These changes are driven by the manner and extent to which we connect. Internet connections via mobile devices now exceed those of standalone PCs. Mobile connections drive usage exponentially. For example, the cumulative number of apps downloaded from the Apple Store from July 2008 to June 2015 currently stands at 100 billion. In 2014, more than 1.8 billion photos were uploaded to the internet each day. And the Internet of Things will stir the connections from hundreds of billions of sensors into this digital mix.

This rapidly expanding digital ecosystem is triggering waves of disruptive change in industries from publishing to taxi and hotel services. The very rate at which disruption takes place is increasing. The digital ecosystem is accelerating the clock speed of change from linear to exponential.

The Wall Street Journal documents this advancing speed of innovation and adoption by noting that the telephone took 75 years to reach 50 million users. By comparison, the television hit that benchmark in 13 years. Facebook reached 50 million users in 3.5 years, while the mobile game Angry Birds amassed this user base in just 35 days.

Crippling Impacts of Change 

These rapid shifts often paralyze large organizations facing the need for full enterprise transformation. Fully 70 percent of transformation programs in traditional organizations fail. Why? Leaders make decisions based on experience, especially past successes. But many of today’s leaders have no experience with digital disruption and enterprise transformation. These leaders are also driven by frameworks formed through unconscious learning, or the process of absorbing patterns through experience rather than conscious deliberate intent. These patterns are extremely difficult to unlearn and often drive risk aversion.

How can the enterprise cope? Forth suggests three steps.

  1. Leaders need to challenge the mindsets established by unconscious learning. Hire digital natives, and bring them into the decision-making process.
  2. Make massive changes in the skillsets of employees throughout the enterprise by embracing digital, mobile, data, and analytics. Launch disruptive initiatives apart from the main business and its culture.
  3. Drive competitive edge by saturating the organization in the change-management process.

The digital disruption-change monster conflict is having additional impacts. It is changing the very nature of competition. Competitive advantage now centers around the speed and effectiveness by which organizations can transform. Success will come to those enterprises that are adaptive, nimble, and efficient.

Like this story? For more on enterprise transformation, check out “Is the Road Runner Rate of Change Turning the Enterprise Into Wile E. Coyote?”