It has becoming increasingly clear that technology alone—that is, simply adopting and integrating new technologies into business operations—is not sufficient to allow businesses to truly thrive in the digital revolution. We are starting to realize that technology is not an end in and of itself, but rather a tool that digitally maturing companies can leverage to achieve profound changes in their business culture, identify and target emerging threats to their business, and capture new market opportunities.
In a recent paper on digital disruption and strategy, the Global Center for Digital Business Transformation refers to this capacity to use digital means to bring about change as “digital business agility.” According to the DBT Center, there are three main “pillars” of digital business agility. They are not specific technologies, but capabilities that are enabled and enhanced by technology. Each pillar can be viewed separately, say the paper’s authors, but in the context of digital business agility, they are best understood as building upon one another and working in concert.
The three pillars are:
Hyperawareness refers to how well a company is able to detect, monitor, and understand the implications of changes to its business environment. In other words, hyperawareness is all about data.
From a purely practical perspective, it’s never been easier for companies to acquire an in-depth picture of their business environment. Portable and inexpensive mobile devices and sensors, ubiquitous connectivity, and sophisticated data collection tools all enable companies to gain critical insight into their own operations and the context within which they are operating: they can listen in on what customers are saying about them on different social media networks and channels, gain granular detail about their production operations and supply chain partners, and compare and contrast every aspect of their activities with those of their competitors.
It is the quantity and quality of the data collected, through whatever technological means a company chooses, that allows an enterprise to achieve hyperawareness. Consequently, hyperaware organizations are less likely to be surprised by unexpected business developments, better able to recognize their own vulnerabilities and make the necessary adjustments to their business model, better understand when and why customers are dissatisfied as well as the specific qualities customers value in their products, and better able to recognize the potential impact of new rivals, lines of business, or acquisitions.
If hyperawareness is all about gathering data, then informed decision-making, the second pillar of digital business agility, is about what organizations do with that data.
Closely linked with a company’s capability for informed decision-making is the maturity level of its data analytics capabilities. Raw data on its own is not particularly useful. What converts data into insight are tools such as predictive analytics, which bases future predictions on past events; data visualization, which makes complex information intuitively easier to understand; and video and text analytics, which allow the right information to be located quickly and easily.
Once again, however, technology is a prerequisite for informed decision-making, rather than a prerequisite. It is not uncommon for companies to fail in the decision-making process, despite having all the necessary information, due to a lack of testing or questioning of strategic assumptions. Historically, companies have often made vital strategic decisions based on an inadequately informed opinion of senior executives, but that’s no longer an option for enterprises seeking to achieve and maintain digital business agility. Decision-making must be based on insights gained through data analysis, and an inclusive business environment must be fostered in which experts both within and outside of the company can access these insights, provide contrary evidence, and offer candid recommendations.
Data has been gathered, decisions have been made, and now it’s time to act. Fast execution means that a company can put its plans into action quickly and effectively. Unfortunately, however, this capability is not a common one. Institutional inertia, doubts and second-guessing, territorial disputes, and a reluctance to invest in needed resources can all stall—if not outright block—the possibility of effective execution. This is especially true of large companies, which is why the capacity for fast execution ranks consistently high among CEO concerns.
In order to more effectively cut through complexity and accelerate the pace of execution, all companies, particularly large incumbents, must draw inspiration from the behavior of startups. In critical areas such as experimentation, time to market, and risk-taking, startups consistently out-execute incumbents. Therefore, in order to remain viable, incumbents need to start emulating the strategies of their disruptive competitors. They include leveraging “on demand” rapidly scalable third-party resources in order to collapse decision-to-execution cycles; automating workflows in order to reach the execution stage more quickly; and the real-time offers that stores offers to shoppers according to context and location, which place decision-making immediately beside customer-facing execution. All of these are well-used tactics by startups that can help companies of any size to achieve this final pillar of digital business agility.