Mark van den Berg, CSO Thinkwise – According to the global research and consultancy agency Forrester traditional companies have a major problem in the era of digital transformation. The research agency expects that in 2027 no less than 75 percent of the companies currently in the S&P 500 index will no longer exist. If you want to belong to the 25 percent that are still around, then you will have to act as the Vikings did. They conquered the world by being fearless, fast and flexible. But I think far more is needed …
The metaphor with the Vikings was made during the Forrester 2018 Forum that I attended in Chicago in the USA. They successfully had the world at their feet with ingenious boats, navigation techniques and an attack strategy that was pretty impressive for that time. But as well as being plundering warriors they were also successful explorers, settlers, craftsmen, traders and ship builders. In a very short time they conquered large parts of Europe. According to Forrester organizations today should emulate the fearlessness, speed and flexibility of the Vikings. Such a cultural change is necessary in organizations that want to survive in the digital era. I will discuss below the three important recommendations from Forrester: be fearless, be fast and be flexible.
Be fearless – Due to fast changing technology and the power of data, companies can now develop many new business initiatives, also outside their own sector. To do so they must make radical choices. Consider, for example, companies as Spotify and Amazon. With one single decision and huge clout Amazon took over Whole Foods Market and within a very short time turned the food retail industry, a very different sector from where they were originally active, on its head. But make sure to be fearless but not foolish. Explore unknown technologies and markets, invest in innovation, but watch out for the hype. And don’t do what the Hudson’ Bay department store did, waste millions of Euros on an IT project. It is not the intention to throw away large sums of money at high speed by betting on the wrong innovations.
Be quick – But what are ‘wrong’ innovations? Of course, you never know that in advance. Therefore try out many new technologies. Make sure that, as an organization, you carry out a large number of experiments across your entire application portfolio, whether it concerns a mobile or back-office application, or for example a new e-commerce channel. But move quickly to the next technology if something does not seem to work. This therefore concerns short cycles; already provide finance for R&D after 6 weeks or kill the idea and move on. A company as Amazon has such a high volume of innovation. Just this year more than fifty press releases have already appeared about newly introduced technologies and products. To be able to achieve this, according to Forrester, it is good to work with small silo-teams, also called ‘spotters’, that are only involved in finding new opportunities for innovation. In addition, this must all be fully supported from the C-level, the boardroom. It must be fully supported in accordance with company policy that you want to do this, because of course it costs money.
Be flexible – Forrester looks mainly from an organizational perspective at how you can be flexible as a company. For example, you can keep continuously innovating through agile cooperation. What certainly helps in this respect, is that you don’t blame the employees if something goes wrong. With innovation absolutely anything can happen! For example, the well-known Post-it Note arose as result of a failed experiment. Furthermore, ‘design thinking’, an emerging school of thought to give shape to innovation in a creative manner, and the C-level executive themselves setting a good example for the rest of the company, are extremely important to be able to operate flexibly as an organization. Companies that do this well, according to Forrester, are for instance BMW that established a separate business unit to identify the requirements of their customers, but also ABN-AMRO that has set up an Innovation Centre right in the middle of their head office. These are examples of how you create a company culture within which you continually keep innovating and also how you can combat dissent.
This also has an effect on the technical end:
The recommendations made by Forrester mainly concern a cultural change at companies. However, it works both ways. In my opinion the digital transformation cannot just come about through a cultural change in an organization. You also need the technical software side to be able to achieve such a turnaround in the company culture. My colleague, Jasper Kloost, and I gave a presentation on this topic during the Forrester 2018 Forum. We demonstrated to the audience that traditional ways of programming are in no way fast enough to keep up with the changes that are associated with digital transformation. You must therefore also modernize your core systems and your enterprise software, such as an ERP system. This is because simply adding countless peripheral applications and apps does not resolve the flexibility probleem, it just increases the technological debt. However, not every low-code platform is suitable for replacing extensive back-office software. Which characteristics does it have to satisfy? You need extremely high-speed development, flexibility, high quality – because these systems are mission critical – and future-proof software. Low-code model-driven software satisfies all these requirements and has even more benefits. You can modernize legacy software and you do not have to start from scratch. Furthermore, it delivers software that will last a lifetime because it is independent from the technology, such as a programming language. So with low-code model-driven software you can really become the Viking in your sector.