You need to change in order to stay in the game

The digital age encourages change and punishes stagnation.

The company must be open to radical transformation, to find new, substantial and sustainable sources of income.

To rethink the business, it is not enough to take existing products and to create under her online store or to use new technologies in customer service. Need rethinking of the business. Companies need to ask the fundamental questions, for example: "do we Really or are we the manufacturer company, which allows customers to solve problems with our equipment when and where they need?" If the latter, logistics and service operations can suddenly become more important than the factory line. Netflix has evolved from a company that gave DVD hire, a company that provides a fantastic monthly subscription and creates it's own content — it is a well-known example of continuous transformations. The conversion requires considerable effort. Digital leaders — high risk tolerance and a desire to realize bold ideas. But no need to wait for a future to realize these benefits.

We found that 60-80% of all tasks for business transformation can be implemented in approximately three years, and they will lay the Foundation for future growth.

Despite the fundamental changes we are not talking about how to take and all to throw. Company that produces components for engines, for example, and after the digital transformation will continue to make engine parts, but be able to act more flexibly. Or the company can open new lines of business through the use of existing assets.

Apple changed the way it changed from a manufacturer of computers in music and fashion, the brand (due to ecosystem iPhone and iTunes), although it continued to produce computers.

John Deere has created a series of online services for farmers, continuing to sell tractors and agricultural machinery.

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What is the "core business" and how to change it

 

"Think of your core muscles as a reliable Central link in the chain connecting the upper and lower parts of the body." This guide Harvard medical school about how to stay in shape.

The authors have identified - as a Central set of muscles that helps the body maintain strength, balance and overall health.

This is the essence of what we mean by core business is the set of capabilities that allows the business to operate effectively.The core of the company is the consumer value of the business based on the strategy of interaction of people, processes and technology. It's elements are so integral that any transformation, which does not take into account ultimately will be zilch.

 

4 rules of reinvention

 

Most reforms did not reach their goals due to the complexity of this process. In our experience, this requires a systematic approach based on the four following points. Although this approach may seem obvious, we see that most of the companies fail in its implementation, primarily because overlooked some of them.

1. Define your digital ambitions

You need to develop a clear idea of where it is created and destroyed value. It is the basis of a clear business strategy. You need to analyze trends in its business, the basics of customer behavior and the economy as a whole, to identify threats and opportunities and divide them into two types: short-term and long-term. We need to soberly analyze their digital capabilities and resources and understand what are the opportunities for the development of key processes and activities.

On this basis, it is necessary to formulate strategic ambitions, whether upgrading an existing business, or something more radical, such as, entering a new market or upgrade the business model — and then develop a detailed road map for addressing the gaps the recruitment, development and staff incentives.

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2. Model breakthrough experience

To act on the basis of the ambitions can be difficult. We found that the most successful companies focus first on the most important aspects of customer interaction, and based on this, formulate a revolutionary idea for work with clients. They evaluate each customer interaction with the company, paying special attention to pain points and potentially loss of communication. Then the team working on modifications, can plan a model for the new interface. Here it is necessary to avoid infinite planning — it is better to quickly create prototypes, minimum viable products to test the market.

3. The development of a network of partners who share the ambition

The speed and scale necessary for revolutionary change, require ecosystem external teams, partners, suppliers and customers. In practice, this means working together with suppliers of platforms, specialists in shipping, and niche players. These relationships can be used to quickly obtain specific skills and capabilities.

In the new reality of ecosystem management is an important skill. Particularly important is understanding how to find and properly connect additional opportunities. One national bookseller, for example, was released in digital format through the partnership with the telecommunications company and with a number of online stores. This approach allowed him to quickly enter the market and increase revenues by 78% per year.

In organisations striving for digital transformation, an important role is played by experienced managers. These leaders must have good business reputation and ability to solve real business problems. They will observe the entire enterprise to examine the organizational structure, data management, pick up talent, performance management and it systems, adopting solutions that will allow you to keep the balance between efficiency, speed and result.

4. The correct structure — less risk One of the main reasons why digital transformations fail is that the organization comes up with is too fundamental changes, and funds begin to dry up. To reduce this risk, it is important to focus on quick wins that allow you to not only build momentum but also to save costs, to invest in the next stage of transformation. One global online shop focused on quick wins (e.g., increased conversion rate) and has managed in just five months, to $350 million in revenue from new sources. This allowed to Fund further changes and inspired optimism.

Technological risks, especially cyber security, also require increased attention, as companies digitize more and more operations and processes. Another risk that managers often overlook is the loss of control over sources of value: company data, customer relationship or other assets. You need to have a clear idea of where value is generated, then it will be possible to understand the relations of the ecosystem. Choosing partners to work with, and bookselling company, mentioned above, refused to cooperate with an Internet storefront, because they were afraid of losing your most valuable asset: the direct relationship with customers.

In a period of change in the market can rise and fall with amazing speed. But companies that are able to adapt, learn and find new solutions that can do more than just keep positions on the market; they can thrive no matter what obstacles are in your way. As once said of Madonna: "we Need to change in order to stay in the game". published

P. S. And remember, just changing your mind — together we change the world! © econet

Source: ideanomics.ru/articles/8757

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