Orchestrating Transformation - Preview

Orchestrating Transformation

The data shows that the pace of digital disruption has accelerated over the past two years. Across industries, executives are feeling its impact more acutely. While their ability to respond has improved with some maturation of digital capabilities, our analysis shows that there’s still a large gap between acknowledging the need to transform and actually achieving digital business transformation. THE DELUSION OF MARKET LEADERS In Digital Vortex, we recommended that incumbents emulate certain things about disruptive competitors (e.g., their ability to create cus- tomer value, their level of operational agility). We added, however, that we were not “exalting” disruptors, whether scrappy startups or digital giants like Alibaba and Amazon. In fact, we correctly predict- ed in 2016 that many of the high-profile startups we profiled would “flame out,” either by being acquired or otherwise folding up their tents. When it comes to digital business transformation, rather than creat- ing competitive change through disruption, startups and digital giants can actually tell us very little. As Joe Miranda, CDO of $11 billion mass media and information services leader Thomson Reuters, noted in our conversation, “Digital natives and cloud-first companies—your Amazon, Airbnb—were born digital. Most of them were born out of a ‘garage’ with a single code base in a single culture. They weren’t born through acquisition. They haven’t been in the market for 50 to 100 years, and didn’t have to address the burden of significant accumulat- ed technical debt.” In other words, when it comes to transformation, disruptive players and incumbents are apples and oranges. It’s therefore risky for incumbents to try to imitate digital giants like Facebook, Amazon, Apple, Netflix, Alibaba, Google, or Tesla. These companies have heaps of management articles and books written about them. 3 However, like Ozymandias, the “king of kings,” whose statue lies crumbling in the desert of Shelley’s poem, digital giants appear somewhat less formidable than they did two years ago. Since 2016, for example, Uber has found its path strewn with pot- holes. Reports about a toxic and discriminatory culture led to the ousting of the CEO in July 2017. Charges of labor abuse toward driv- ers and battles with regulators dominated the headlines during this

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