In the last quarter of 2018 Bridges Business Consultancy Int and PerformanceWorks partnered to identify what 1,874 leaders, across Asia Pacific, North American and Europe, were thinking about the impact of digital on their business and how they were addressing the challenges it raised, with some fascinating realizations.
- Almost half of all leaders interviewed are not prepared for digital transformation –
The readiness of leaders to adopt digital in their businesses is much lower than anticipated, despite it being so widely discussed. Only 6 out of 10 organizations have a digital vision and Europe is lagging behind Asia Pacific and US.
This result surprised us. From our work and travels, we had anticipated that transforming to digital would be high on the leaders’ agenda for this year.
- Digital is leveling the competitive playing field.
Across all three continents, companies are starting from the same place in transforming to a digital company. For example, advances in technology made in North America and Europe are now mostly irrelevant. Meanwhile, Asia Pacific (and other markets) are leapfrogging into adopting digital.
A digital transformation is not about tweaking a company’s business model; it requires a whole business model change and on these three continents, leaders are now learning what’s involved.
Consider how China is leading in becoming a cashless society. While once lagging behind in payment due to the low uptake of credit cards and no central crediting institute, they solved this problem digitally – by adopting a cashless payment system.
- Bureaucracy in Western companies is hindering their digital transformation.
Businesses in North America and Europe work in a more complex landscape than Asia Pacific, which hampers digital transformation. Asia Pacific companies are less burdened by the hierarchy and bureaucracy of their Western counterparts. This is due to the fact that businesses are more established and have built in more layers and procedures. Legacy systems have become a hinderance in more developed companies.
Generally, companies in Asia Pacific are younger than in Europe and North America, as most markets are either emerging or just emerged as developed economies. Thus, young companies can leapfrog their counterparts through appropriate and up-to-date technology investments.
- Alarm bells should be ringing in boardrooms.
The strategic landscape for many companies is rapidly changing and leaders are not prepared for the change. It’s also concerning as strong results from 2018 won’t guarantee success in 2019.
A critical question in the boardroom is:
“How do we need to transform our business to leverage new opportunities?”
Our research also focused not only on identifying what the state of digital is but also what leaders need to do different and our findings included the following recommendations and more:
- Leaders need a different attitude and approach for digital transformation so they don’t repeat past mistakes (which they are already doing as 84% of digital transformations are failing).
- Leaders need to recognize that because digital transformation impacts the whole company business model, by default, it results in a culture change (most of the time).
- Data security must be integral to every company’s strategy and not treated as an afterthought.
- Leaders need to create a culture within the company in which failure is acceptable but within certain parameters.
- Transforming a company to digital can be very expensive. Leaders have a responsibility to track performance and the return on the investment.
- Adoption of Big Data needs to dramatically improve as it is part of the DNA of digital transformation and a powerful tool for managing the business.
The final part of our research revealed the 11 steps required for transforming to a digital-driven company, which we call the “Ticking Clock Model.