What is a bionic? Bionic mans having normal bionic capability or performance enhanced by electronic devices. he rapid development of technology has resulted in bionic companies capable of improved customer experiences, productive operations and increased innovations.
Companies are adopting Artificial Intelligence and machine learning. These augment customer relationships and business processes and move towards total automation in future.
The primary constraint is finding the right fit for the company to unleash the power of technology. Business leaders need to get two questions right - what does a bionic look like and what path to take to convert a traditional company to bionic company.
The so-called digital natives - Google, Amazon, Alibaba, Netflix, Tesla offer a sense of direction. The company fo the future will be something like this. At the core is the purpose of the business and the reason it is in business. There are four distinct characteristics of a bionic company. There are three possible outcomes about how these companies do their business.
Purpose and humanity
Whatever be the level of automation, humans will be the centre of business. Technology in fact should unleash the power of human creativity. Purpose and strategy become more important as we integrate with more technologies enabling them to align rapidly moving autonomous teams. Bionic companies will establish links outcomes with the work that teams are delivering. (Why agile teams work?).
As employees shift from operating processes to designing them, companies need to focus on reskilling them and keep them motivated during the transition. Getting fresh talent will depend upon whether companies deliver on the purpose and strategy to create employee engagement.
Outcomes
Three types of outcomes will shape bionic companies.
- Personalised customer experiences.
- Bionic operations
- New offers, services and business models.
Personalised customer experiences.
Digital technologies are transforming how B2C and B2B companies relate to customers. Most obvious changes are in customer channels with the use of internet, e-commerce and mobile devices powered by analytics. Customers today expect companies to understand them and know their preferences. They look for seamless, 24/7 service across physical and digital channels.
Search engines have transformed marketing and transparency across social media requires that companies be authentic and engage with their customers. Increased connectivity, voice recognition, augmented reality will lead to changes in the preferred mode of communications.
More importantly, business models are transforming as companies move to build on customer relationships. Businesses are building a database of every customer who could want their product. Pursuing a relationship model with the customer, shifts such fundamentals as pricing, lifetime value, product strategy and profit model.
Bionic Operations
Majority of operations are done by human beings but shortly, we can expect most business processes to be augmented by machines using AI algorithms. Machines can do most things that humans do though they are most suited to do one single thing well instead of multi-function things. They can do it faster, more efficiently, sense, remember, take decisions(using AI) and take action.
Machines today are capable of learning and once they pass the human capabilities they can improve the learning and experience curves and give the companies the first-mover advantage. However, they do not perform so well in uncertain and dynamic situations and companies have to decide where and how to utilise them.
Many new jobs would be created for people to design and improve them over time. Over time there will be a fundamental change in work, from processes operated by employees to processes designed by employees. This will require redesigning legacy business process to enable humans and machines to work together.
It is important to understand that this requires a fundamental change in the way of working. processes will be developed by multidisciplinary teams empowered to find the nest solution.
New offers, services and business models
Continuous innovation will be the hallmark of a company in the future. Combining data, technology and talent will enable companies to develop an ongoing stream of products. Companies can be expected to transform their capabilities from
- centrally driven R&D to many empowered, innovative, product building teams.
- from a top-down direction of ideas to a directed portfolio of experimentation where one can scale rapidly, winning propositions.
- deliberately paced sequencing of new offerings to a more rapid pace of change.
Successful companies will not hesitate to go outside of their traditional markets or offerings. they will leverage their corporate assets an arm their new ventures with formidable advantages.
Technology enablers
The technology used in future will be different from what today's technology in two different ways
Data & AI
- The main source of bionic companies is data. As companies move to a system where the decisions are taken jointly by humans and AI they will have to build up their ability to collect, manage and use data from multiple sources for advanced analytics. This means that they should be able to create data on every aspect of customer experience.
- store data from all sources in a ready to use condition.
- embed data science skills in the organisation
- track outcomes to train algorithms.
- build ongoing innovation into machine AI operations.
Modular technology
Companies must make two shifts about technology.
- move from a mix of legacy technology to next-generation technology stack.
- from technology systems a stack to execute basic processes to a modular, technology platform enabling rapid innovation and customisation of key processes.
It may be necessary to go through an intermediate stage of moving to digital native modular technology
Fully digital companies have common fully decoupled next-generation technology platforms that allow fully standardised operating processes across their businesses.
The cost of transforming technology stack and functions can be substantial. However, companies would find it beneficial to move towards a modular, flexible data-driven approach.
Human enablers.
As companies organise around teams and learn to work in new agile ways, talent will become more important
Digital talent
In the new setup, human talent will be more valuable. It will be deployed in designing, auditing and innovating processes. Employees should have the necessary design and technical skills and be flexible, adaptable, learn quickly.
Companies will have people focussing first on pain points, frictions o customer and work with technical engineers to find a solution. Data scientists would be critical to delivering new data features and outcomes.
Many employees today do not have the skills required for a bionic company and hence reskilling becomes a very critical necessity. The focus would be first on reskilling current employees and recruit fresh talent to plug the gaps. and for new needs.
Dynamic platform organisations
Significant changes would be necessary for organisational structure, new ways of working and leadership.
Companies are today designed around well-defined business units, profit centres. The processes are customised by organisational units and differences across business units often outnumber commonalities. In a bionic organisation, processes will have more standardised elements. They would have a common customer-facing process, frontline support, operations and back end processes. Processes will be owned by agile teams and they will support frontline and operations teams and customers.
Bionic companies also will have to work in new ways. The team will leverage agile methodologies. The new system of processes to deploy teams, plan expenditures, manage strategies will be required to harmonise new structures and ways of working.
Leadership would require a drastic transformation. First are those who lead by doing taking on product owner roles in agile teams. Second have leaders who are accountable Finally, senior executives must adapt to setting goals, translating that into work to be done, deploying teams, removing roadblocks, and step back to allow speed.
Technology is no longer an obstacle to customer engagements, growth, efficiency and value creation. Most companies face barriers in their legacy operating models. CEOs need o start with a vision of the future as they design a new way of operating. Start by taking a few big cases at the heart of the business. Pursue all capabilities to make the change. When everyone can see the benefits the road to adopting it for all the processes within the company becomes clear an necessary.
By Rich Hutchinson, Lionel Aré, Justin Rose, and Allison Bailey
BCG 2019/11
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