Whilst there is definitely a fair degree of hype, the thinking is now, ‘how do we achieve results in a digital world?’ rather than ‘should we bother?’ – with 47% of global decision-makers believing their current business model will be obsolete by as soon as 2020, according to a recent study by Harvard Business Review.
Not everyone can have a disruptive model and industry incumbents often have other large advantages such as huge distribution networks and world-renowned brands. Research by McKinsey across industries has demonstrated that whilst disruptive strategies are the most effective response to intense digitization, ‘superfast-follower strategy’ coupled with excellent digital execution are the next best thing.
Note it does have to be ‘super-fast’ – McKinsey found that the fastest followers enjoyed 12.3% revenue growth over a three-year period, which was nearly double that of companies who played it safe with average reactions to digital competition (see figure 1 below).
Figure 1: Impact of industry digitization on incumbent’s 3-year revenue growth
Once incumbents do get their digital act together they can be very dangerous – with McKinsey finding that incumbents moving boldly command on average a 20% share of markets being digitized, compared to only 5% for digital natives ‘on the prowl’.
Digital mindset vs digital victim
Even for a CEO there’s 25% of their role that could be automated using current technology, such as analysing reports. Those that work doing predictable physical roles could see up to 81% of their current work done by machines.
It’s natural to feel ‘ahh this is all happening too quickly, and I don’t know where to start, or what this means for me and my role’. Yet the advent of digital work should be a positive thing for most of us. For many, technology will automate the more routine parts of our jobs and augment the more cerebral parts, leading to what will hopefully be more interesting work.
Indeed, employees in companies who are successfully undergoing a company-wide digital transformation are three times more likely to feel engaged than those who aren’t, according to the recent study with 3,000 executives in 17 regions around the world by SAP and Oxford Economics. So let’s make sure we and our teams land on the positive side of the digital divide, rather than getting left behind. Digital isn’t just a new department – it’s something everyone needs to be involved in.
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