Never in the history of mankind has the velocity of business been increasing at such a rapid pace. This is largely driven by the rise of digital business models enabled by an exponential growth in technology. There is a plethora of information describing that we are in the Fourth Industrial Revolution — and soon to be entering the fifth.
What if we are actually in the midst of moving out of the industrial revolution and entering the next stage in our development? We just don’t know what to call it yet! I’m sure when mankind started moving from the agricultural age to the industrial age, they didn’t know what to call it either.
There are three major drivers that point to a move to the next age: the exponential growth in technology, a gap in human adoption of that technology and dramatic changes to how companies operate in order to transform from traditional business to digital business. In order to make this journey, it’s critical to understand the difference between traditional and digital business.
The Digital Flow Framework
As someone who co-founded a company to work with enterprises to develop digital strategies and roadmaps, I created the digital flow framework to bridge the gap in understanding between traditional and digital business, with the goal of accelerating the journey to digital. This framework is based on a metaphor of speed. So, allow me to go off on a slight tangent and describe the three levels of speed:
• Speed 1: The fastest person to climb Mount Everest was ultra runner Kilian Jornet, who went roughly 0.5 mph to accomplish his goal.
• Speed 2: A jet stream is significantly faster, reaching highs of around 250 mph.
• Speed 3: Solar winds move up to 1 million mph.
Traditional business is anchored firmly on the ground with changes in business models being reliant on Traditional technology that takes quarters and years to implement.
Digital business today is sitting in a jet stream, with an ability to test and change business models in short periods of time and implement business changes in weeks and even days when digital technology is fully adopted. All the technology in the jet stream area of the diagram is mature enough to implement today.
And up in the future of business are a number of exponential technologies that are in the development phase, being worked on by scientists, engineers and makers. These technologies have the potential to change every aspect of the world as we know it, and they will make our current way of doing business look relatively slow.
Digital Flow Framework Business Outcomes And Recommended Actions
Realizing what can be achieved at each level of the framework is a catalyst to drive action. Future business will be characterized by real-time business models, fully automated processes and rapid product releases resulting in frictionless business. The action to take now for most companies is to watch this space. Companies that plan on being a provider of the technologies at this level should be actively researching and developing their solutions.
Digital business is characterized by a near frictionless business when technology and new ways of working are fully adopted. Full adoption enables rapid changes to business models and process velocity with a very high speed to value creation. The action for all companies to take is to invest heavily in digital transformation.
At the speed of traditional business, business models are relatively static with a lot of self-induced complexity and constrained processes leading to a slow time to value for new capabilities. The action to take here is to freeze investments, divest in old ways of working and technology and use the freed-up investment to invest in digital.
Three Components To Master The Digital Flow Framework And Achieve Digital Velocity
There are three components to achieve digital velocity and flow: talent, operations and technology. Staring with talent, it’s important to move from a scarcity mentality about a war on talent to an abundance mindset. Applying talent capacity planning using digital process accelerators is key.
In terms of employees, the time is now to utilize artificial intelligence (AI) to augment the talent pool, eliminating redundant and data-heavy workloads and speed up continuously. The other part of talent capacity planning is a workforce that expands and contracts through alternate talent pools such as crowdsourcing, freelancing and the gig economy, the use of joint ventures with customers and suppliers, and partnering with universities, customers and other companies for IP generation.
The second component to master in order to achieve digital velocity is to deal with the significant changes required in operations. In digital business, there is a “customer in approach” with extreme customer-centricity. This means being committed to solving customers’ issues, providing a super experience and being willing to disrupt the company’s business model. From an internal organization standpoint, teams reorganize away from functional departments and into cross-functional teams working directly with customer microsegments. These teams have agile mindsets and methods and often use variations in internal process to cater directly with their customers. This is a very different approach from traditional business, where there is a “company out approach” in which work is accomplished in a waterfall fashion through siloed departments and the customer touchpoints are sales at the beginning and product and service delivery on the two ends.
The last component to master in order to achieve digital velocity and flow is digital technology. At a minimum, it’s important for everyone in the company to be aware that digital technology is significantly different than traditional technology. Companies can’t achieve digital velocity with traditional technology. Stay tuned for part two of these series to learn more.
The move from traditional business to digital business is not about the destination — it’s about the journey. Since the end state keeps moving, becoming excellent in the journey is key. To achieve digital velocity and flow, it’s important to master: digital talent practices, digital operations and digital technology.