Business breakthroughs are a team affair

Greg Doone is PwC’s digital Strategy and Data Leader.

As published in the Sunday Star Times

Change has always challenged business and strong leaders have always steered their businesses through it well.

The threat of digital disruption has quickly become a serious topic among business leaders.

It’s a key theme for CEOs in PwC’s 18th Annual Global CEO Survey, with well over 50 per cent of international and local CEOs pinpointing the speed of technological change as one of their big concerns.

The detailed New Zealand findings from this survey are released this week, but a sneak peek shows we’re even more concerned than the international community.

There’s something in the slightly warped image of thousands of “black cabs” protesting in front of the Beehive that seems to have crystallised the very real threat digital business models have on traditional revenue streams.

These new business models are everywhere, they keep coming, and the resounding feeling is the next one could be coming for your industry.

But this is nothing new.

Change has always challenged business and strong leaders have always steered their businesses through it well. This particular wave of disruption though has a key characteristic and that is pace, and with that pace, comes a very real need to change how we plan and deliver innovation.

A key indicator of this rate of change, or more subtly, how the established adapt to it, is the “half-life” of the Fortune 500 effectively how long it takes for half of the Fortune 500 to be replaced.

In the 1980s this half-life was about 30 years. Today, it is around 13! The pack is being shuffled more quickly.

Yes, capital-intensive industries, with long investment cycles and traditional planning models still play a strong role, but it is well publicised that their agile cousins are now more than just the noisy neighbours they have moved into the mansion up the hill.

Look closer still at those more traditional businesses and the ones that are thriving are the ones picking up some very important innovation practices from these newer players.

There is a cliche of this success. It goes something like this. Some 29-year-old, probably holding a skateboard, offers the following sage advice: “It’s lean baby, fail fast, that’s how we do it.” It’s also worth noting that there is usually a Harvard degree to go along with the skateboard.

Author of the Lean Start, Eric Reis, may be only 36, but much of his inspiration comes from one of the fathers of the “Agile movement”, Jeff Sutherland, who won’t be too offended at being referred to as a wily old US Air Force pilot who flew combat missions in Vietnam.

They both preach the same thing gather a small, agile cross-functional team, build minimum viable prototypes, test with real customers, drop the pride, learn and change, and next week, do it all over again. If you look at two of New Zealand’s digital success stories, Trade Me and Xero, this thinking is at the heart of what they do.

It is this pace and humility, knowing what we don’t know, which is key to success for the modern, digitised business. To innovate, test with real customers, measure and learn faster than the other guy. That’s how you win. Just be wary that along with your traditional competitors “the other guy” are the thousands of Danish, Korean, or Kiwi 22-year-olds thinking about your industry right now. And they learnt to code about the same age as we learned to ride a bike.

Greg Doone is PwC’s digital Strategy and Data Leader.

As published in the Sunday Star Times

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