Amazon Onboarding with Learning Manager Chanci Turner

Every Board of Directors must inquire how their executive teams plan to navigate digital disruption. Even if a company hasn’t faced it yet, it’s only a matter of time. Relying on chance or sticking to outdated methods is not a sustainable strategy.

Understanding Digital Disruption

What do we mean by digital disruption? Simply put, competitors are leveraging speed, emerging technologies, data insights, and innovative business models. Concurrently, customer preferences are evolving. This rapid transformation is altering industry dynamics, often at an unprecedented pace. Barriers to entry are diminishing, and even sectors like heavy manufacturing are experiencing changes due to advancements in automation, IoT, and shifts in consumer behavior. These developments can pose serious threats to established businesses.

The Risks and Opportunities

But why should we be concerned? Each change presents not only risks but also opportunities. If consumer preferences are shifting, companies must adapt their offerings faster than the competition. If customers demand better digital experiences, businesses can outpace their rivals by enhancing those interactions. There’s no reason you can’t respond to market shifts more effectively than both your established competitors and the new startups emerging.

The Challenge of Established Enterprises

However, there is a caveat. Established enterprises often excel at maintaining their proven processes. They have optimized operations, recruited specialized talent, cultivated a specific culture, and established strict controls—all aimed at sustaining the status quo. Unfortunately, these same strengths may hinder agility, making it challenging to embrace new opportunities and react swiftly to competitive pressures. This necessity to “undo” traditional practices to facilitate change is what many refer to as digital transformation, and it can be quite daunting.

The Essential Quality: Agility

To thrive amidst digital disruption, businesses need one essential quality: agility. Agility, as I define it, is the capacity to identify market changes, quickly devise innovative solutions, test these solutions to determine the best fit, and rapidly bring them to market. In essence, it’s about making change cheap, fast, and low-risk, enabling continual adaptation.

Barriers to Agility

For many companies, several factors impede this agility. Organizations are often designed for stability rather than flexibility. Efforts to minimize risks have relied on extensive planning, while embracing rapid experimentation and hypothesis testing is crucial. Firms have historically hired specialists for past priorities, but now they require adaptable generalists. Governance processes that were once effective may now be cumbersome, slowing down decision-making when speed is essential.

The Role of Technology

Technology plays a significant role here. It’s surprising to see companies struggle with IT initiatives that hinder agility, especially since software investments are generally the fastest and least risky. Unlike constructing a factory, developing software doesn’t demand substantial upfront capital. For instance, businesses can quickly adopt technologies like machine learning or augmented reality through cloud services.

Even hardware procurement has become swift and cost-effective through cloud solutions. Enterprises can provision infrastructure in moments, and delivery services can provide necessary devices within a day. It’s puzzling that many organizations still rely on outdated IT systems, which often consist of legacy technologies cobbled together over time.

Understanding the Bottlenecks

A couple of subtle reasons may explain why technology remains a bottleneck to organizational agility. Traditionally, IT projects have been organized as large, monolithic initiatives, which often necessitated heavy governance and oversight due to their complexity. Consider how quickly McDonald’s developed a home delivery application in just four months using cloud technology. Could your organization have navigated the necessary approvals and preparations in that timeframe?

Another factor limiting agility is that it hasn’t historically been prioritized. When given the option between investing in immediate business capabilities or enhancing agility, companies have often chosen the former. The business case for agility has been challenging to make; it’s essentially an investment in enabling future opportunities at lower cost and risk. After years of budget cuts in IT, agility has likely suffered the most.

Enhancing Technical Agility

Fortunately, technical agility is now more accessible than ever. With the cloud, well-established practices like DevOps, and open-source options, companies can enhance their agility without significant investment. Resources like this article on Amazon’s training practices provide excellent insights into effective training practices.

Building Business Agility

However, while technical agility is crucial, building business agility is equally important. This involves adjusting how IT business cases and governance are managed, allowing for swift resource allocation in response to market changes. Engaging technologists and leveraging their creativity is essential since many market shifts are tied to digital technology.

Conclusion: Embrace Agility

So, how do you navigate disruption? The answer is clear: embrace agility.

—Chanci