Why speed is key in digital transformation

Gradually or suddenly

Digital disruption is going on for more than two decades now. We all understand how many industries are affected by the disruptive force of new technologies and business models. Yet a lot of industries & companies are still in denial when it comes to their own business: ‘it can’t affect us’ or ‘this won’t happen in the next 5 years ‘.

You might think that disruption hits you suddenly when you don’t expect it. Fact is that while you might not see the effects immediately, the disruptive change is happening before you realize it. Change always starts at the edges and move towards the center.

Remember that Netflix was already investigating the idea of streaming in the early 2000’s. Because of slow internet speed it took them until 2007 to launch what Netflix is best known for: their streaming services.  By 2010 they started expanding internationally and by 2013 they started to create their own content. Now they dominate the streaming market.

Speed is key

To cope with disruption in your industry, speed is key to successfully transform:

Speed in understanding

When new players are dominating your market, and you’re trying to figure out how it happened, you’re too late. If you can spot the early signs of disruption, you have time to react. Your organisation should anticipate on the future by investigating frequently how innovation can impact your business.

Speed in taking action

To innovate in the old days, you had to have an idea/business plan, pitch it to an investor or board, raise money, hire people, build and evaluate. Today start-ups build an idea, raise money and figure out a plan or business model as they go.  Wikipedia wasn’t built by someone who said ‘I am going to make the most popular encyclopaedia in the world ‘.  Lots of great innovation happened just by doing without any approval.

Speed in building

Building successful products is about making decisions on what users want. Continuous and rapid iteration allows you to learn quickly, adjust and improve. Amazon CEO, Jeff Bezos, shares why moving quickly is so important in his 2016 letter to shareholders:

 “If you’re good at correcting course, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”

(If you want to know everything about Amazon, you should read our Amazon Case here)

Speed in decision making

Legacy is paralyzing most incumbents. Successful companies in transformation have a less centralized decision-making structure.  Start-ups or bigger tech companies with an agile culture and organization are able to make fast decisions. The UK challenger bank Monzo built a core banking platform from scratch with 27 resources in less than a year. Incumbents aren’t able to manage this.

Speed to market

Disruptors don’t follow the traditional path of customer adaption described by management guru Everett Rogers. In his model, new products gradually gain popularity within different groups: innovators, early adaptors, early majority, late majority and laggards. Disruptors are perfecting their product with trial users before unleashing it to the vast majority of the market. 

Speed of competition

While the competition is always looking for new ways to gain market share in new or existing markets, you should have a framework or process to do the same. If you choose to be a first mover, it comes down to making speed in gaining market share. If you’re a second mover, it will come down to be the first to innovate and create better value for your customers.

Conclusion

So, to wrap it up: disruption doesn’t happen suddenly but rather gradually. While most innovation develops progressively, your organisation can’t afford to wait. Spotting innovation fast and act upon quickly will be key to stay relevant.

Or as the novelist Ernest Hemingway has one of his characters ask another ‘How did you go bankrupt? ‘Two ways’, was the response “gradually and then suddenly”.

About Duval Union Consulting

We are new-style management consultants focusing on transforming and growing organizations in a digital-first world with offices in Europe and the Middle East. New-style? Co-created business strategy, custom-made transformation trajectories and actual experienced business advisors are only some of our differentiators and why clients love to work with us. We design the future of your business together.

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Article by Aitor Somers.