Orchestrating Transformation - Preview

Orchestrating Transformation

pabilities to quickly cross industry boundaries, blurring the lines be- tween traditional notions of “sectors” and company types. Executives and transformation practitioners are beginning to recog- nize the impact of the Digital Vortex phenomenon and what it means for their companies’ competitive position. In DBT Center research from 2017, roughly half of executives reported that digital disruption was already happening in meaningful terms in their industries, compared with only 15 percent in 2015 (see Figure 1). Digitally driven market change is also increasingly capturing the attention of C-level execu- tives. In 2015, digital disruption was not deemed worthy of board-lev- el attention in about 45 percent of companies. Just two short years later, only 17 percent felt this way.

Fig. 1: Timeline for Significant Market Change Due to Digital Disruption

33% Within next 3 years

49% Already occurring

48% Within next 3 years

18% More than 3 years

37% More than 3 years

15% Already occurring

2017

2015

2015 N=941 2017 N=636

Source: Global Center for Digital Business Transformation, 2015-17

More than 30 percent of respondents in 2017 believed that digital disruption would have a transformative impact on their industries. By contrast, less than 1 percent felt this way back in 2015. Clearly, the avalanche of news stories—e.g., Amazon acquiring its way into the pharmacy industry with the US $1 billion purchase of startup PillPack in June 2018, and the immediate US $12 billion drop in the market capitalization of pharmacy retailers—has served as a wake-up call. 1 Seventy-five percent of executives now believe that the impact of disruption on their industries is “major” or “transformative,” a stark increase in just two years (see Figure 2).

6