Last week at our Singularity University Executive Program, I was moderating a discussion with our Co-Founder, Peter Diamandis when the topic turned to how large companies can achieve a true digital transformation. His advice was clear and straightforward — don’t start a full-scale digital transformation until you know what your organization’s long term (think 20 years) goal is. Otherwise you run the risk of investing large sums of money to digitize an organization that is optimized for the business of today rather than the business of tomorrow.
This immediately reminded me of the classic Harvard Business Review article, “Reengineering Work: Don’t Automate, Obliterate”, from all the way back in 1990. Back then, the business world was tackling automation and how it could speed processes, however the very real risk was that we would simply recreate outdated processes in software that would become too expensive to ever modify or update, forever shackling the organization to an inefficient or ineffective way of working. The advice was to find senior management with real vision to completely reimagine the way the organization works as the critical factor. Information technology could then be leveraged to bring their bold ambitions, such as reducing turnaround time by 90%, to life.
Today’s companies also require senior leaders with real vision, however the challenge is different. Given the speed of technology and changing market dynamics, the vision needed today is the ability to completely reimagine an organization’s purpose or reason to exist and why it should expect to be in business in 20 years before thinking about anything else. Without that vision, organizations may be digitally transforming businesses they don’t really want to be in, or that may not even exist in a few years. In most large organizations that I’ve worked with, this kind of long-term, strategic thinking is rare. It’s not because people can’t do it, but because the near-term performance pressures are too great for them to be able to think that far into the future.
It is hard to imagine an organization that is not going to commit to a digital transformation of their business if they have not already started down that path. I think what will separate the successful companies from those that fail in the process is whether they are using their investments in artificial intelligence, robotics, virtual reality, etc. to truly create a vision of the future and a business that will thrive in it, or merely a futuristic version of their current business. Increasingly it feels like those leaders that are approaching digital transformation starting from a broad vision of the future will be best prepared to not only succeed in the short term, but also to ensure the longevity of their organization. And likely their own legacy.
This post originally appeared on Medium on June 25, 2018.