Digital Transformation should be top of every CEO’s agenda. Indeed, most organisations dedicate plenty of space to their Digital initiatives on their websites and annual reports. However, these initiatives rarely go beyond an ambition to cut cost by optimising processes and reducing staffing levels. Companies that dare not go beyond tinkering will go extinct. CEOs must drive disruptive evolution through Digital Transformation.
The scale at which the Digital economy is changing the world is huge, and its impact will be disruptive: well beyond simple process optimisation. All industries will be distorted, their boundaries confused and rearranged. All of them. For instance:
- Health: Soon, all medical interactions will be augmented and mediated by technology. Healthcare records will be digitised and updated in real time, and AI will be used to monitor all aspects of health – from compliance with medicine intake regimes to monitoring their effects to predicting the onset of illness as pioneered by Howz.
- Travel: Already, airport check-in and baggage drop-off have been largely automated. Users print their boarding passes at home or carry them on their phones, and airport kiosks print bag tags for those carrying luggage. Basic AI systems optimise every aspect of air travel, from the dynamic pricing of seats on planes to load factors, crewing and real-time seat allocation maximising sales of premium rows. Other travel providers are following suit, from car hire companies looking to remove friction at pick-up and drop-off to a whole host of shared-economy travel apps
Digital transformation is about sweeping change. It changes everything about how products and services are designed, manufactured, sold, delivered, and serviced—and it forces CEOs to rethink how companies execute, with new business processes, management practices, and information systems, as well as everything about the nature of customer relationships.Thomas Siebel, founder, Siebel Systems
Some CEOs keenly think about where the opportunities and threats are, and they’re consulting and hiring the best talent to help develop their Digital Strategy and execute the Digital Transformation. But most don’t. They don’t think disruption is headed their way. They don’t believe their organisation is in substantial and imminent danger. They think the seismic changes that have rocked other sectors with the introduction of businesses such as AirBNB, Uber or Amazon will somehow not come to shock their own verticals. Or they think any changes will be small, gradual and in the far future.
CEOs should be obsessing with this, rallying the entire company in pursuit of Digital Transformation to ensure the survival of the enterprise, dismantling and rebuilding their company from the ground up. In geological terms, CEOs should think of now as an extinction event: most companies that fail to transform themselves will disappear as organisations will emerge or evolve to take their place. Those who survive will be transformed beyond recognition, evolved into a whole new collation of products, services, ways of working and business models.
If you are a CEO, it is up to you to make sure your organisation makes it through to the other end. Are you ready for battle?