We are in an age where digital technology is fundamental to growth and competitiveness. Companies rely primarily on digital platforms and digital technology is disrupting a broad range of industries. Companies who have not implemented the digital backbone are accelerating their investments in digital, especially with the outbreak of the epidemic and its consequences. Adopting digital technology is only a means and it is necessary to be clear on the objectives, the goals to improve our chances of success.
Competitive advantage.
In the earlier decade, a business strategy based on advantage derived from superior position and scale delivered results. It was appropriate in a relatively stable and predictable business environment.
Today the rapid adoption of digital technologies has fundamentally changed the nature of competition. Competitive advantage is more temporary, planning is more organisational learning, companies are compelled to collaborate across industries. The scale of operations is limited more by social acceptance and external factors have become integral to strategy.
The strategy thus has become more biological than mechanical. Hence companies must adopt the biological conception of strategy and organisation.
Perception, action and sociality
We must be aware that our worldview is not complete or objective. Technology can help us to enhance our senses and capabilities. We can act socially to understand and influence the worldview of others.
We have the power to shape our collective world views. But we don't use it skillfully and intentionally. The value of this capability will increase as the business strategy becomes more biological.
Implications for digital transformation
Technology can make companies more capable of the new business environment. It can also shape how we sense and act on information. We can digitally transform the company's perception, its ability to the collective action sustainably.
- Extend the senses: Technology can process data rapidly, expand reach beyond the traditional boundaries. Many companies have built digital ecosystems combining the data from suppliers, customers and other sources. New devices like IoT increase the ability to collect data from new sources.
- Creat connected digital learning loops: With advancements in Ai, companies can now learn and act at a rapid pace. For this, the data sources must be integrated with AI systems enabling the algorithms to work without human intervention.
- Focus on respective areas of strength: Ai algorithms can recognise data patterns very quickly and humans can focus on leveraging their cognitive abilities.
- Facilitate communication: For new ideas to spread across the organisation, technology can provide easy solutions for the rapid dissemination and adoption throughout the organisation.
- Facilitate cooperation: Rapid spread of information does not guarantee its adoption by everyone. It involves a collective change in behaviours and beliefs. Digital platforms can help scale and accelerate collective adoption.
- Diagnosing system heath and overcoming social limits: Businesses should focus on integrated learning loops, human cognition, digital technology to solve not only individual problems bus also contribute to global challenges facing us today.
One area that is exclusive to human thought is - the purpose of business. Only humans can decide on this and apply technology for its growth.
The power of biological organisations.
This fits broadly with the agenda to embrace uncertainty and thrive amid complexity. This may be uncomfortable to many leaders trained to maximise short term efficiency and not the social contribution. Leaders can tap into the new biological model by asking the following questions on
- efforts to expand the power of the organisation.
- efforts to enhance learning capabilities.
- efforts to create autonomous digital learning systems.
- roles of humans and algorithms, and its segmentation.
- human cognition focus on imagination and empathy.
- efforts to tap into external ecosystems.
- efforts to capitalise of emerging opportunities.
- reconceive organisation as a hybrid of technology and people.
- using technology to increase the sustainability of systems.
- Articulated social purpose.
Companies that adopt the broader biological concept of technology and strategy are more likely to survive and thrive in future.
The Why of Digital Transformation
By Martin Reeves and Kevin Whitaker
BCGHi 2020/10
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