When organizations can turn a stone and asphalt business into a virtual marketplace for recycling rubble such as NCC has, it’s clear that digital business has the power to upend industries and transform business models. The rapid pace of digital business evolution means that organizations need to be continuously adapting their business and operating models. Nearly two-thirds of CEOs and CFOs anticipate business model change frequently due to digital transformation.
“If you pursue the right strategy and quickly adapt to what’s next you will be ready to deal with sustained and rapid change. This builds momentum through and beyond digital transformation using the approach we call ContinuousNext,” said Mike Harris, EVP, Research and Advisory in the opening keynote at Gartner Symposium/ITxpo 2018 in Orlando, FL. “ContinuousNext is a strategy to achieve success in a world that is constantly changing.”
He suggested that the audience of over 9,000 CIOs and IT leaders start with a simple formula:
(Mindsets + Practices) X Technology = Capabilities
Changing mindsets lead to new practices, which are amplified by technology leading to new capabilities and yielding new results.
Given constrained resources and resistance to culture change, leaders should embrace five significant imperatives to enact a ContinuousNext strategy in their organizations.
Often, employees’ first reaction to a new strategy may be fatigue and resistance to change. Gartner researchers quantified the impact on performance and discovered that highly stressed employees result in a 9.1% reduced productivity and 5.7% reduction in revenue.
To help explore how the best organizations manage a ContinousNext environment while balancing the impact on people, Gartner analyzed more than 13,000 organizations over two years, and discovered the three key factors that determine their Enterprise Technology Adoption profile, or ETA:
- Does the IT department drive technology adoption or is it driven more by executive leadership and business units?
- Is the governance model controlled and strict or flexible?
- Is the organization cautious and measured or dynamic?
Gartner research shows that these factors determine an organization’s ETA, and are the most predictive indicator of the use of technology for competitive advantage. Notably, top performers had one thing in common that was the biggest predictor of success: organizational dynamism. Regardless of industry, region or size, all top performing companies cited being dynamic as the strongest determinant of success. These organizations created cultures that were able to embrace change and adopt technologies in a new way.
A smart way to change culture without big pronouncements and 100-page slide decks, is to start culture hacking, according to Kristin Moyer, Distinguished VP, Analyst at Gartner. Organizations that hack their culture can turn a barrier into an accelerator. CIOs might want to try this. Gartner predicts that by 2021, CIOs will be as responsible for culture change as are Chief Human Resource Officers.
Read more: 10 Culture Hacks for Digital Transformation
Privacy also is one of the top barriers to being (or becoming) a dynamic organization. How consumers feel about privacy, and what actions they take surrounding privacy, have shifted. Today’s consumers are updating privacy settings or even deleting social media accounts altogether. Further, governments are taking action with legislation like GDPR. As consumers become less willing to sacrifice security and safety for convenience, organizations must carefully balance deriving value from consumer data with protecting it. Privacy is now a board-level issue, and CIOs need to maintain data protections to ensure a dynamism that supports ContinuousNext evolution.
Remarkable advances in artificial intelligence (AI) have taken it to the point of augmented intelligence. In recent years, AI has met human capability in reading comprehension, Chinese and English language translation, and cancer diagnostics. As a broad collection of technologies, AI works not as programmed technologies, but learning systems that rely more on data than programming. Because they are networked, they will learn from their peer AI systems, and advance exponentially.
By 2021, Gartner expects that AI systems will answer questions better than humans
However, while organizations that have yet to launch an AI initiative fear that it will displace human jobs, those that have adopted AI technologies find this isn’t the case. Harris noted that the reality is that organizations are beginning to use AI not to replace humans, but to augment the work they’re able to do. People work side-by-side with AI, which extends their capabilities and makes jobs more impactful. In other words, the most impactful AI implementations are those in which people interact with the technology in a collaborative system versus those in which people merely consult the technology as a separate system.
Product management as a discipline
Some of the most powerful companies have fused digital technology into products, creating a new management practice across all industries. Think of Tesla, a technology company in the automobile space. Or Amazon, a technology company in the retail industry. Digital products are in every industry, which has given rise to a new push for digital product managers.
“Digital product management is a core imperative of ContinuousNext and accelerating adoption means that if you don’t start soon, you may never catch up,” said Mark Raskino, Distinguished VP, Analyst at Gartner.
The Gartner 2019 CIO survey shows that top performers are twice as likely to be doing product-centric delivery. Digital product management isn’t just a different way of doing IT, Raskino noted, it’s a different way of doing business. He added that adoption of this style of management has doubled in the past two years and most of the world will follow by 2020.
Shape, shift and share, just like a software company
By shifting to a digital product mindset, organizations can put customers at the center of their development. Raskino listed examples of organizations that have made this shift: Chase bank has a digital product manager for its Chase pay app, McDonalds’ IT has digital product managers for restaurant kiosks and mobile apps, and Transport for London, has digital product managers for the travel apps, bots and APIs used by staff as well as customers.
Raskino noted that any industry can have its products and services digitally revolutionized, even stone. European-based NCC made a shift from construction aggregates to software and from projects to digital product management, by launching Loop Rocks, a virtual marketplace that matches the recycling or “looping” of rubble between demolition and construction sites.
The company developed a mobile application with a new release cycle every two weeks. “Shape, shift and share, just like a software company,” Raskino said.
Finally, consider digital twins a strategic tool in your ContinuousNext strategy. Digital twins manage physical things through sensors and computer modeling. Think about bringing this to your organization by creating a Digital Twin Organization (DTO) to track processes, operations and job performance alongside maintenance needs, social platforms and data.
For example, a large university hospital wanted to improve efficiency and patient care based on real-time data. Within the hospital, there was a constant need for operating rooms for scheduled surgeries versus emergency surgeries. By implementing a DTO, the hospital was able to use process and data mining to discover needs and inefficiencies. The result was justification for two new operating rooms and procedures for better allocation of space.
“Digital twins bring ContinuousNext to life, and it loops from the physical to the virtual and back again,” said Helen Huntley, VP, Analyst at Gartner. “We can share all that information to make business decisions that are based on real data in real time.”
In closing, Mike Harris reminded the audience that the way they adopt technology matters to their success. “Dynamism is the critical factor,” he said. CIOs can shape, shift and share between mindset and practices to achieve success.