What lies ahead in the digital revolution? Organizations are at a crossroads. In the digital future, says ThoughtWorks President and Chief Commercial Officer Craig Gorsline, they will need to deliberately transform and embed digital deep into their DNA.
If you want to stay ahead, be aware of what’s bubbling underneath the surface of current trends. Futurist Don Tapscott says that this is an age of networked intelligence, where data and algorithms talk to each other—and to their users. Yet organizations aren’t fully capitalizing on key assets: their customers. These “prosumers” (producers and consumers) build and decentralize product development, taking the idea of a “sharing” economy one step forward.
the digital economy
Bitcoin has shown that currencies themselves can be created and mined through decentralized blockchain technology. Don Tapscott believes that as digital transformations remold the world into new structures with blockchain technology, virtual reality, and the Internet of Things, a new relationship—and new power dynamics—between people, data, and products will also arise.
Blockchain technology has the potential to radically decentralize power from institutions—especially those in banking. “If traditional banks don’t change, they will be replaced,” says Keith Mestrich. As the CEO of Amalgamated Bank, he envisions a system of finance that is more accessible and responsive in every way. At Amalgamated, he’s working on providing transformational services to the unbanked and balancing how their users adapt to digital banking products.
Keith isn’t your usual bank CEO—he’s one with a 25-year background in the labor movement. He believes banks have an important role to play in advancing digital economies to the underserved, but they often stifled feel stifled by bureaucratic regulations. How can banks innovate in this kind of environment?
However, digital innovation and regulatory compliance do not have to be at odds. In fact, Keith believes that they can come together, as regulators play an important part in this ecosystem. He pointedly mentions that most fintech startups have no intention of gaining experience in regulations and compliance. Things might change once they encounter a bear market and other macroeconomic shifts in the world economy.
digital business barriers
Companies don’t understand what digital business means, says Glenn Morgan, Head of Digital Business Transformation at International Airlines Group (IAG). Digital business isn’t only another channel; it’s not the web or mobile. The real challenge is about using technology to disrupt business models, because technology is the business.
Many companies have digital business units, but that keeps innovation siloed. The rest of the organization has no idea of what it means. To bring digital into the heart of the business, every employee needs to have a digital mindset to embrace the new models and challenge established business processes. There is no playbook for this revolution—Glenn points out that there isn’t a single corporate that knows how to do this.
Emre Eckmecki, President of Dogan Online in Turkey, agrees. Organizations must integrate digital into all aspects of the business, just as digital is integrating online and offline experiences, networks and much more. Break down barriers between IT and business, urges Emre. The two need to work together in cross-functional teams for innovation to happen.
at every customer touchpoint
Paula Levy, Chief Strategy Officer of Demand Worldwide, says that while consumers have high expectations, they also want to engage with brands and help them succeed. One way to make this happen: deploy IT teams into the field to create the customer experience. By having teams understand customer needs, they can innovate and build connections and experiences customers want.
Stewart Holmes of Barclaycard is already seeing digital transformation take place at his company, a bank with a 325-year history. Barclaycard looked for new opportunities within the existing ecosystems of payments and consumer credit, which historically have been disconnected from each other. Today, Barclaycard sees over 80% of customer interactions digital-only—these ecosystems are being disrupted by digital and mobile.
Stewart believes in connecting disparate parts of the banking ecosystem together to create an interconnected whole for new opportunities and products. This thinking has led to solutions led by design data, business ideas driven by lean, and development teams guided by agile practices. One result: the creation of Pingit, the #1 mobile payments processor in the UK.
ecosystems of value
The acceleration of technology change is rapidly creating supply chain efficiencies and market opportunities. Adrian Cockcroft of Battery Ventures sees Silicon Valley’s enthusiasm and investment in container technology as one example. Just as the standardization of shipping containers after World War II removed break bulk cargo from the logistics supply chain and fueled globalization, software containers are facilitating and monetizing the enterprise move to the cloud.
Some disruptions are so big, incremental innovation will not work, says Dan McClure of ThoughtWorks. For big innovation, you must understand all supply chain participants and processes, and orchestrate them into an ecosystem of value, where all parts work together. Otherwise, true maximized results will not be realized.
ParadigmShift guests received a sneak peek of the new Silicon Valley start-up Innit, publically announced 3 days later. Joshua Sigel, VP of Business Development at Innit, envisions a future where your food talks to your stove, refrigerator, and smartphone. The rise of the Internet of Food has ramifications far beyond what is possible today, allowing the digital interactions of food itself to provide value.
These trends require allies and innovative thinkers who are willing to upend established practices, but most companies still struggle to attract the best talent. One repeated theme: “hire the right people, then get out of their way.” But how?
Ben Casnocha, co-author of The Alliance, is radically rethinking the relationship between employers and employees. Instead of top-down direction, successful organizations form mutually beneficial alliances with employees. Employers should find opportunities for transformative assignments that impact the organization and grow individuals professionally and personally for workforce continuity. Embarking on this model allows organizations to future-proof against disruption—and ensures your best people will be willing to stay.
Rachel Laycock, Head of Technology at ThoughtWorks, North America, has practical advice on how to empower technologists to do their best work. They want autonomy, mastery, and purpose in their work. But landmines lie in their way: organizational silos, bureaucracy, and the dreaded “it’s always been done in this way.” Executive sponsorship is critical for success, but you must also engage middle management to ensure transformative efforts do not stall.
Platforms of Execution
Adrian Cockcroft drew on his wide-ranging career at Netflix and eBay Research Labs to discuss managing and building systems of engagement. Building out digital transformation requires not only scale, but speed as well. He recommends taking a systems thinning approach, where the whole company has a vertical process and doesn’t try to lock things down. It seems chaotic, but once you understand the feedback loops and mechanisms involved, then it becomes much simpler.
Ryan Murray, Applied Engineering Lab Director at ThoughtWorks, says organizations can narrow the innovation gap by building platforms for execution. This platform is more than developing technology capabilities, it also involves developing a culture of lean experimentation for your organization. If you want to disrupt the disruptors, create levers of change for business leaders and technologists alike.
We look forward to seeing you next year in Miami.
If you haven’t attended a previous ParadigmShift, express your interest below for the 2016 conference in Miami, September 25-27, 2016.