6 minute read 10 Apr 2019
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Why your business transformation needs to happen in 3D

By

Gil Forer

EY Global Markets Digital and Business Disruption Leader

Leads digital go-to-market strategy and EYQ. Focused on the impact of disruption and what’s after what’s next. Founder and producer of Innovation Realized.

6 minute read 10 Apr 2019

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How transformational leaders should solve the now, explore the next and imagine the beyond is the focus of the Innovation Realized Summit 2019.

In the 20th century, “If it isn’t broken, don’t fix it” was apt for business; today if you are not anticipating, experimenting, imagining—and failing often—you’ll become obsolete.

The reality of business today is one of unrelentingly disruptive change—on a scale not seen since the days of the first industrial revolution. But this change is happening at an unprecedented pace. Businesses must successfully adapt and operate under a set of rules and expectations that are constantly in flux.

The challenge of disruption is an existential threat but also an unprecedented growth opportunity. To survive, navigate and seize the upside of disruption, companies must undertake a comprehensive and continuous business transformation, which enhances trust, embraces digital, fosters innovation, and instills customer-centricity. Inherent in this process is redesigning the workforce and envisioning a growth strategy for the next decade and beyond.

Such a transformation, successfully deployed, will deliver continuous growth, strong competitive advantage, and increased capacity to create and deliver long term value. But, it depends on a new business capability: thinking, operating and planning in three dimensions simultaneously:

1) Solve the now

2) Explore the next

3) Imagine the beyond

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Innovation Realized

At the Innovation Realized Summit 2019, we convened brilliant minds to collaborate on how to solve the now, explore the next and imagine what's after what's next.

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Transformation in 3D

The three-horizon framework offers a comprehensive approach for enterprise-wide transformation, simultaneously addressing the dimensions of now, next and beyond, and encompassing every aspect of the organization, including business models, operations, supply chain, talent and digital infrastructure. Call it transformation in 3D.

Now

Companies solve the now by focusing on growth of the existing business, driving efficiencies, and maximizing profitability and shareholder value, through various initiatives such as optimizing and upgrading existing digital infrastructure. Solving the now also means responding to immediate challenges, whether competitive threats, shifting customer preferences or regulatory changes. Leading companies address these challenges through initiatives such as re-designing corporate risk and trust strategy, achieving global scale and full market impact with innovation, or making strategic decisions such as buy vs. build. Now is also the time to consolidate any piecemeal local or functional transformation efforts into an end-to-end business transformation.

Next

The scale of change being experienced in every industry calls for simultaneously exploring the next. Is the future of health about prevention or treatment? Which consumer future are you designing for? And who wins when energy is democratized? These are the kinds of questions that company leaders must explore to identify new business models and opportunities within their sector and across other sectors.

At the same time, company leaders should explore deploying and integrating emerging digital technologies, such as AI, robotics and blockchain throughout the business. Don’t forget that the human is just as important as the digital: explore new talent models and employee experience frameworks to increase diversity, respond to new generational needs, drive inclusiveness and create a true culture of innovation across the organization.

Beyond

Given the accelerating pace of change, companies can’t stop at thinking about what’s next. They must imagine what’s after what’s next. How will the nature of value creation evolve? How do you enable your organization to continually adapt to a hyperconnected, network-based and superfluid market so that it can thrive long term? What new megatrends will be sparked by the next wave of technology change? What new capabilities and market opportunities will digital transformation create for the enterprise? Imagination and curiosity become crucial attributes. Thomas Friedman observed that when he writes “I don’t think outside the box. I also don’t think inside the box. I think without a box.” Businesses should do the same when considering the beyond.

3D transformation imperatives

The fast pace of innovation and technology change requires companies to think and execute in these three dimensions simultaneously or risk quickly falling behind. These three dimensions also enable organizations to think beyond the immediate transformation, which is only the prelude to understanding and achieving the potential outcomes. Ultimately, companies must become “superfluid enterprises”, adapting effortlessly to shifts in their environments. Successfully navigating this new reality requires the transformation to an equally adaptive digital infrastructure and continuous attention on the now, the next, and what’s after what’s next—the beyond.

Following are 10 imperatives for success in transforming in 3D:

1.       Approach: Be proactive and disrupt yourself. Taking a reactive approach will be too late.

2.       Mindset: Be adaptive and have an agile mindset. Don’t rely on the assumptions of the past.

3.       Culture: Create the right culture and processes to foster entrepreneurship and innovation. Part of this culture should be focused on encouraging and rewarding experiments and focusing on the right leaders. Enable a fast fail.

4.       Ecosystems: Pursue an outside-in strategy to drive your corporate innovation through ecosystems and partnerships; it is too slow to do it all alone.

5.       Talent: Drive diversity and inclusiveness as key ingredients for a more innovative culture.

6.       Technology: Embrace and integrate new technologies, such as AI, blockchain and 5G, which will enable you to rethink and redesign different aspects of your organization. Treat data as a strategic asset.

7.       Value: Rethink the concept of value and how value can be defined and created to also focus on non-financial components, a collaboration framework driving long term value creation for both society and shareholders.

8.       Customer: Be a customer-centric organization by leveraging data and technology to redesign your customer journey and better understand customer differences across segments and markets.

9.       Talent: Invest in learning and development for your talent. Recruit or acquire new talent to create a fabric of new skill sets, such as design thinking, behavioral science or AI, in your organization. And don’t rely only on talent within your organization.

10.   Mindset: Move from doing digital to being digital.

Key questions for C-Suites and boards

  • How should your product and service design change to deliver on your tailored customer-centric approach?
  • Have you worked with your talent team to invest in a unique employee experience on par with your investment in customer experience?
  • As we move more and more to a world of networks, such as Lyft or Airbnb, have you imagined new business models for your enterprise?
  • Is your vertical organizational structure fit for purpose in the Transformative Age or should you move to a more horizonal structure to enable agility, respond to the needs of your future workforce, and become a customer-centric organization?
  • Have you challenged your current C-Suite structure and ask whether the C-Suite model that succeeded in the postwar period is the one best positioned capture the growth opportunities in the next decade and beyond?
  • Being successful in Transformative Age is not about the individual (people, organizations or countries). Collaboration is the critical success factor—within and across industries, between the private and public sectors, among startups and corporations and between human and machine. A key mechanism to foster collaboration is a fabric of ecosystems that drive innovation and new business models. What is your collaboration and ecosystem framework and action plan?
  • How will you leverage emerging technologies, such as AI and quantum computing, and data to reinvent your business from every aspect including customer, supply chain, transactions, talent, risk, finance, manufacturing, etc.?
  • How do you define value in the Transformative Age? How do you create value in a superfluid market and in a growing network-based world? How do you create value that reaches stakeholders across society?

If you don’t plan in three dimensions, will you be left behind? At Innovation Realized Summit, 8-9 April 2019, we are coming together to collaborate on how to solve the now, explore the next and imagine what’s after what’s next. Keep updated on insights and join the debate using #InnovationRealized.

Summary

Every business needs to be ready to transform to keep pace in the Transformative Age. To do so they must consider their transformation across three dimensions simultaneously, now, next and beyond. This 3D framework must be applied to every aspect of a business, notably: talent strategy, corporate risk, innovation, consumer insight and capital allocation.

About this article

By

Gil Forer

EY Global Markets Digital and Business Disruption Leader

Leads digital go-to-market strategy and EYQ. Focused on the impact of disruption and what’s after what’s next. Founder and producer of Innovation Realized.