Posts Tagged ‘Design Thinking’

Part 2: How Can Incumbents Respond to Disruption?

Monday, August 8th, 2016

3 Questions to Ask!

By Dawood Khan

When it comes to disruption and the introduction of disruptive practices in a particular market, we should keep in mind what renowned Canadian communication and media theorist Marshal McLuhan said in 1964 about the heavy reliance of newspapers on classified ads and stock-market quotes. McLuhan said that “should an alternative source of easy access to such diverse daily information be found, the press will fold.” But as we all know, the demise of classifieds in print media did not happen until just a few years ago. And even more than a decade after the advent of the internet, many print publications did not care to invest in digital technology and transition to online publications. As a result, many of them suffered royally at the hands of startups and a few incumbents that had the foresight to make the transition and disrupt themselves.

Netflix’s transition in 2011 from DVDs to streaming is well documented. The company suffered 80% drop in its stock price as it transitioned to online streaming, but it eventually paid off as evidenced by a 134% spike in its stock price over the last 12 months, causing the cable industry to lose more than 6.7 million subscribers over the last five years[1], and driving BlockBuster, its arch-rival at the time, out of business. Another testament to Netflix’s success: the number of hours many of us spend on weekends, binge-watching our favorite shows.

” The challenge for incumbents is the task of preparing for the day when their cost structure won’t be aligned with alternatives in the market. The preparation can entail taking measures against some of their current operations with subsequent hits to their profitability. But those measures may eventually pay off handsomely. The challenge is that it’s difficult to predict accurately what may and may not work.”

The questions then are:

  • What is an incumbent to do as it prepares for emerging disruption – Is there a way to know what will work and what may not?
  • When should it act – while timing is important, is it possible to get the timing mostly right with a high degree of certainty? and
  • How it should bring its new approach to the market?

As no one really knows what approach would work best, or how to predict market reaction, prudent organizations are tackling disruption as a transformative journey rather than a discrete action at a point in time or the proverbial “destination.”

A Digital transformation journey means that these organizations are continuously experimenting with new business models, emerging technologies and ways in which to engage and interact with their customers.

As part of this journey, organizations are increasingly looking at determining how an approach may be desirable (do people want it?), design thinking - ideoviable (is there a business case/model that will work?), and feasible (is there a technical solution?). These three elements form the foundation of design thinking, as illustrated in the image courtesy of IDEO. Which, when used as part of an organization’s digital transformation journey, allows an organization to rapidly identify opportunities, test them through quick and iterative proof-of-concepts, refine the approach or move forward.

For anyone, and especially incumbents, it is important to accept market realities. Disruption is inevitable. In order to survive, organizations have to be prepared, and the way to do this is via a journey towards transformation. While many call this “digital transformation,” people (customers and organizational culture) form the core of any successful transformation. An innovation-focused culture that is open to employing a human-centric approach to solutions, rapid prototyping, and experiencing failure, is the corner-stone of success in addressing the ongoing disruption in the market.

[1] “Can Netflix Survive in the New World It Created?”, New York Times, June 15, 2016

How Different Sectors Adopt Digital Transformation?

Thursday, June 2nd, 2016

Digital transformation (“DX”) is inevitable!

According to a McKinsey & Co. finding, 40% of Fortune 500 companies will not exist in 10 years, if they fail to transform. However, there are vast opportunities for those who take action!

The first Canadian Digital Transformation (“DX”) Think Tank session was led by RedMobile Consulting in Toronto on May 25, Dx Journey Pic2016. Select business leaders from a diverse cross-section representing public and private sector organizations participated. The participants examined various aspects of digital transformation and underlined the significance of anticipating and embracing disruption, and the threats posed if digital transformation was ignored.

>> Contact us for more information

Digital Transformation – Getting Lost is Easy!

Tuesday, April 19th, 2016

By Dawood Khandx5

Digital Transformation – Mobile, Cloud, them Things, and that really Big Data

We’ve all heard that the Internet of Things (IoT) and data analytics are essential to future success of organizations. Almost every day, like me, I am sure you’re bombarded with a new event on the topic. Having spent a long time in the emerging technology and innovation area, I thought I’d attend one of the more established IoT conferences and see what all the fuss is about. I inherently dislike paying good money and spending valuable time at an event to hear nicely concealed sales pitches. But at this IoT event, to add insult to injury, I actually found myself lost half-way through the event. I thought I was alone in this, so I casually broached the topic at lunch with several other people. It turned out that they were in the same boat. The conversations over breaks, evening networking sessions, and hallway chats only reaffirmed the general sense of bewilderment. And this audience was mainly people in the tech-innovation space.

After hearing from 250+ different IoT platform vendors, half a dozen different interoperability/ standardization bodies, and many dozens of vendors who made sensor chipsets, “things”, radio networks, gateways, and analytics engines – one realizes the problem. It’s a classic tale of technology hype and lofty promises of what “can be” on one side and the reality (some may call these shackles) of legacy business. Between the two sides, you’ll find confused decision makers.

Where do you start? A rooftop patio is a great place

Over dinner on a rooftop patio on one of our warm winter evenings, I had an eye opening moment with a client who manages a large number of complex and diverse infrastructure assets. We were discussing the value of data analytics and the role IoT could play. His view was that before his organization could think of big data, they had to get credible, reliable and usable data first. They had no shortage of data – it’s just that the data they had was inconsistent, in different formats, and resided in disparate systems. Hence the level of confidence they had in its efficacy for decision making was questionable, especially in a highly regulated industry. I asked him why? He explained that they couldn’t even consistently identify an asset because they used stick-on bar codes that would peel off, wash off, or just get scratched. So, in such cases, the maintenance staff would write the information on a paper and enter it into their system at a later time. Most of the time they could identify the assets correctly, but a large number of times they couldn’t. As a result, their degree of confidence in the large amount of data they had was limited.

Digital Transformation – Failure isn’t an option, it’s a requirement!

To me, the fore-mentioned discussion, illustrates a classic challenge organizations face. Their line of business operations folks have business problems, but don’t necessarily understand where to start their Digital Transformation (DX) journey or how to go about IoT and analytics. This is because, these things seem too far a stretch from the reality of where they are today.

The examples illustrate major barriers to adoption of IoT and analytics, and corporate-wide success of Digital Transformation. In addition, the absence of a return on investment (RoI), justifying implementation costs, and an inability to visualize tangible results, have also been cited as main challenges for adoption.

While the majority of large enterprises claim to be in the midst of Digital Transformation, the fact is that many of the same organizations, when asked to define Digital Transformation, couldn’t do so.

As an example, we can see the fore-mentioned dynamics at play in the banking sector. Financial institutions (FI) are generally encumbered with bureaucracy, legacy systems, and regulatory burdens. At the same time, they are faced with the onslaught of web and mobile-based offerings from a growing pool of financial technology (FinTech) startups. These over-the-top players are disrupting the traditional business of FIs.

As the business of FI’s is disrupted, much like Uber disrupted the taxi industry, the overarching question for the banks is whether or not there are compelling drivers to embrace DX. Justifying implementation costs and quantifying RoI may provide insight for decision making. However, becoming sidelined in your own industry, or being rendered obsolete, are business outcomes that can never be undone.

So, the risks are high – but where does one start? How does one really plan a viable DX journey? And how does one’s mindset and approach have to evolve to be successful?

You may never have all the answers, so start, start small, be open to failing, learn quickly, refine your approach, and iterate! That’s the “fail fast” approach in a nutshell, you go from concept to proof-of-concept in several rapid iterations.

What people may not tell you is that, this requires a certain degree of discipline, and an appreciation for the art and science of “Design Thinking.” While organizations are starting to rapidly prototype and willing to fail fast – it’s no fun if you fail fast, fail everywhere, and just keep on failing.

A disciplined approach using “Design Thinking” that accords the latitude to experiment, learn, refine, and improve through discrete iterations is an art and a science.

Fail fast and succeed fast by learning from everyone’s mistakes

So, a select group of business, operations and innovation leaders are invited to participate in a hands-on “Design Thinking”-based, Digital Transformation Thinktank and Workshop. Roundtable discussions with early-adopters who have already undertaken the Digital Transformation journey successfully, will provide insights from first hand experiences. The goal is that we will be able to identify opportunities to derive business value from Digital Transformation, and to identify specific use cases for proof-of-concepts (PoC).