What is Digital Disruption? And why is it causing CEO's to rethink how they make decisions?

Why is the term Digital Disruption (DD) plastered all over the media, being debated in boardrooms, and now a top priority for CEO's across the largest enterprises on the planet? (like, JP Morgan, Barclays, Walmart, Tesco, AXA, Standard Life and so many more). Well, it could be because DD has the potential to create ground-shaking breakthroughs at warp speed - that (we now know) will forever change the way we live our lives, purchase things, make decisions, both in our personal and professional worlds (hello - @Tesla, @Google, @Monzo, @GrowthEnabler).

DD is happening now. Ask those who have suffered its wrath. (we call them 'Dwindlers' - Toys R Us, Woolworths, Nokia). And those that have been quick to adapt and shape-shift when needed ( we call them 'Darwins' - GE, JP Morgan, Natwest, Barclays, Microsoft). And those that are way ahead of the curve and pioneering seismic shifts in the world (we call them 'Disruptors' - Google, Tesla, Apple, Uber, Amazon, Alibaba, Tencent, Softbank).

DD has already made a significant impact on our lives. We are now unknowingly immersed in, or even addicted to our new digital existence. We live, work and thrive in a digital society where our smart phones, social networks, instant online shopping, same day drone deliveries, contactless payments, near-instant access to shared taxis, ability to meet, chat and video call anyone, anytime, anywhere has made us role model digital citizens. Moreover, the flexibility of movement and unfettered access to WIFI are non-negotiables for most. This ‘digital existence’ is the new normal - both in our personal and work lives. And it's here to stay. (How digital fit are you in your work life? Are you replaceable with AI?.. provocative but deliberate)

What is the real difference between digital disruption and digital transformation?

Digital Disruption has two incarnations. 1. It is what happens to a traditional enterprise if it does not change, adapt or shape-shift (Blockbuster, Mothercare, Blackberry) - it is outside-in. 2. It can also be driven from within the core (inside out) as an enterprise seeks to adapt, change and aspires to thrive by transforming itself.

Digital Transformation (DT) happens when the executive board and leadership team of an enterprise decide to re-invent themselves into a digital business. New monetisation models. New operating models. New leaders. New culture and new business economics. New future. Key business and support functions, people, processes, technology systems, governance and the overarching operating models goes through massive change. It is hard, painful and can be costly - if not executed and led optimally. DD + DT is about leveraging cool cutting-edge technologies such as AI, IoT, Robotics, cloud-based platforms and repurposing data-assets to create exceptional business, customer and shareholder value (over the short, medium and long term). The best way to appreciate the importance and context of DD + DT is to look at the past, present and future pathway's of the tech titans (GAFTAAM). Google, Amazon, Facebook, Tencent, Apple, Alibaba, Microsoft). As these gigantic companies continue to own the new currency of growth - DATA - they will dominate existing markets, create new markets and disrupt at will. (Sinister perhaps.. but authentic at its core). Over 64% of CEO’s believe the tech titans, the likes of Amazon, Google, Facebook, Alibaba and others will enter their industries within the next five years.

For CEO's - DD is seen as the fastest route to growth and innovation. Given this, global enterprises are investing big sums of money in building new customer value propositions, inventing new digital products (using data, API's, AI tools and cool UI/UX capabilities) transforming their business economics and models, and re-thinking their entire operating model, talent sourcing, venture investing and partner ecosystems. Unlike most trends, fads, hot topics, DD is not likely to go away anytime soon. The Tech Titans have made sure of that.. as they continue to hoard insane amounts of cash (on their balance sheets) and disrupt traditional industries at will. As such, global enterprises are re-purposing their budgets, re-training their top talent, and re-directing their leaders use digital as a springboard to grow new revenue units, create amazing customer experiences and enter new markets.

We saw this coming (did you?). In hope we live.

It was only 4 years back - in 2015 - that we founded GrowthEnabler (an AI driven data and digital solution sourcing platform) anticipating the tsunami of change and competitive stress that was going to compel global1000 CEO's to step out of their comfort zones and reinvent and recalibrate from the core. Back then, we pitched again and again (relentlessly) to global enterprises alerting them of the threats, opportunities, and major decisions shifts coming their way. A majority ignored us! And only a few 'got it'. Thankfully, today (thanks to DD becoming mainstream and high on the peak on inflated expectations) every Global Enterprise, Tech Services Provider, Management Consulting firm, Government Agency and Academic Institution has a Digital agenda and trying their best to adapt and adopt to survive and thrive in the 21st century digital business world (from dwindler to darwin and then disruptor status).

The Digital Nirvana? Answer: Speed!

It's all about SPEED. Doing things faster than ever before. Anticipating the 'unknowns'. Making big decisions using real-time data and trusting ones intuition.

A Divisional #CEO of a large Insurance Giant recently asked me; what's the one thing we can do to drive Digital?

My answer: Unblock things. Remove anything (or anyone) who is causing decision inertia and delays in your business. Automate to gain speed using RPA and similar tools, and use AI to source insights. Punish politics and silos.

I am a big proponent of using frameworks, models, toolbox's and playbook's to reduce complexity and decision uncertainty and have seen the world's best CEO's and world leaders do the same. One such decision model developed by #GrowthEnabler is the Partner, Procure, Invest approach (PPI). The model enables #CIO #CEO #CDO #CMO and Venture teams to source, curate and segment digital companies and solutions aligned to their 'growth stage', time-horizon and business function and priority relevance. In other words, partner teams can source emerging / partner ready companies, procurement teams can source market ready fast scaling and mature companies, and so on. GrowthEnabler and being used by FTSE and Fortune clients).

Business leaders are actively seeking to partner with, procure from, and invest in new innovative digital solutions and platforms that use clever technologies like Artificial Intelligence, IoT and Robotics. The business imperative is clear, and urgency is high. Digital business is the new normal and will impact every function and role in the enterprise. It starts with the workplace, and then spreads to other parts of the business. Attracting, retaining and cultivating talent has never been tougher, and the new digital workplace is the way forward. Moreover, the return on investment logic on digital is sound. The evidence stems from the fact that the top 10 tech titans today account for over $7tn in market cap and have billions of dollars of free cash available to invest in growth. Apple alone has $250bn of cash on its balance sheet dispersed across multiple geographies. It does not stop there. The Venture capital market is running at warp speed. New age investors like Softbank have access to $150bn+ as part of their revered Vision fund, and haved backed early stage disruptors in AI, Robotics and Augmented Reality – across key sectors, including Retail, Media and Finance. Tech titans have an obvious unfair market advantage and have a ‘kryptonite effect’ on the super-large enterprises; a by-product of being a ‘born digital’ company.

In summary, the importance and urgency of DD and Digital Transformation (DT) - its twin name - has increased over time. Enterprises who invest in DD + DT will leap frog from dwindler to disruptor status in their chosen industry and niche. The early wins typically come from cost optimisation initiatives using AI, Data Analytics and Automation tools. This is followed by shifts in business culture and business model innovation - led by the CEO and board.

In support of this, research confirms that 50% of CEO’s view digital transformation delivering cost re-engineering and supplier diversification benefits over the next 3 years. There is mounting pressure on traditional enterprise level CEO’s and their leadership teams to deliver consistent topline growth, expand in new growth markets, engage customers using digital innovation, build new digital products, and also attract the best digital talent - and achieve all of this while digitally transforming their entire organisation. This is a real challenge for most and hence understanding who is best suited to ‘adopt digital’ is essential.

What are the pitfalls and what should you avoid?

The most common pitfalls in Digital Disruption can include lack of leadership support from day one or a lack of investment in digital talent and leaders (external and internal) to drive the mission. Other common pitfalls can also include mis-aligned time horizon between board and leadership team, to generate business impact and no group wide Digital Strategy to guide functional digital initiatives.

Finally. many traditional enterprises can have a lack of budget and funding in digital Partnership, Procurement or Investment capabilities (resources and funds). Single function vs cross functional leadership and planning low adoption from traditional industries is also a common pitfall whereby IT / Tech has been less prevalent.

How do enterprises establish a 'digital first' culture and how can you spot a good tech solution, partner or investment before your competitors?

Digital first culture can only happen when the 5 core building blocks are stacked up:

• Leadership buy-in a digital mindset 
• Digital talent hiring 
• Governance and KPI’s
• Big Digital Investment budgets 
• A culture of innovation where experimentation is rewarded 

Spotting high potential digital start-ups investment opportunities requires active tracking, analysis and research of top start-up disruptors at emerging, scaling and mature stages. Using AI, machine learning tools and predictive analytics and recommendation engines, enterprises can make informed decisions to engage with new partners, procure solutions from alternative vendors, and invest in high potential innovators for long-term value. 

About the Author

Af Malhotra is the co-founder of GrowthEnabler ; an AI driven platform that is radically changing the way corporations’ partner with, procure from, and invest in the global digital ecosystem. Having started his career in 1999 with Lord Sugar’s iconic brand, Viglen, Af went on to join the Japanese IT Services giant Fujitsu (TSE). He then spent several years in leadership roles with the US research and advisory firm, Gartner (NYSE), which led him to co-found GrowthEnabler. Af is an active tech investor in AI, IoT and SAAS start-ups. He is a regular keynote speaker, moderator and advisor to CEO's from the worlds top enterprises. Af (and GrowthEnabler) is betting big on #digitaldiversity being the most critical priority for global enterprises. Af is also the chairman of Tech London Advocates India; supports charitable causes, including the Princes Trust, Everywomen and featured on the BBC and global news channels. Af's recent interview on the BBC on #Brexit and Tech Innovation and trade created public interest.

https://growthenabler.com/