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Mis à jour le 24/07/2020

Continually Improve to Protect Your Organization Against Future Risk of Disruption

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Over the past few hours, we’ve covered a lot of ground together. You’ve learned about the main disruptive technologies that are exploiting satisfaction gaps in your customers’ experience with your organization’s service.

Since then, we’ve turned our focus inside the organization:

  • You’ve discovered how to persuade the organization’s leadership that they need to initiate a digital transformation project.

  • You’ve learned about business cases and stakeholders and the short- medium- and long-term elements of the BCG Transformation Framework.

  • We’ve also talked about the lessons from other organizations who’ve been down this path so that you can improve the chances of success for your roadmap.

In this final chapter, it’s time to look beyond the boundaries of the organization again. More specifically, let’s explore how to protect your organization from external disruption. The first part of the solution is simple: focus on the customer experience.

Work Constantly to Improve Customer Experience

The key insight here is that disruption isn’t necessarily (or even primarily) about price: the primary driver for change is the opportunity to improve the customer experience.

At the beginning of the course, we talked about disruption in the music industry. Let's focus on that example once again.

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From vinyls, to cassettes, to CDs, to digital downloads -the music business is no stranger to disruption.

The first (and for the record companies highly profitable) disruption we looked at was the arrival of the compact disc (CD). CDs cost the consumer twice as much as the vinyl records they were used to buying - but they significantly improved the consumer experience. The sound was (arguably) better, storage was easier, and accessibility was much easier. The CD improved customer experience and triggered a surge in revenue for the industry that lasted until the next wave of disruption arrived with digital downloads.

The music industry was ready for - and enthusiastically embraced - the disruption of CDs, but was blindsided by digital downloads - to the extent that it is only just now recovering and understanding how to thrive in the next stage of its evolution; finding other revenue opportunities to replace the evaporating income from music sales.

How at risk is your company? The level risk determines how often you need to integrate transformation projects in your company’s life.

Measure the Likelihood of Future Digital Disruption

In his book “Why Digital Transformations Fail,” published in July 2019, Tony Saldanha (vice-president of IT and global business services at P&G for over a quarter of a century) wrote about what he calls the digital disruption index: a composite metric based on the average of four individual ratings - the higher the rating, the higher the risk:

4 risks make up the digital disruption index: industry risk, customer risk, business model risk and company performance risk.
An example of the overall likelihood of a business being disrupted (3.2 in this case), which is a combination of industry, customer, business model, and company performance risks.

As you can see in this diagram, the four ratings are from:

  1. Industry risk - how volatile is the industry in which you operate? Is there significant VC activity to fund potential challengers to your current business?

  2. Customer risk - as you’ve already seen, customers are more demanding. How much friction is there in your customers’ experience with your organization? NB - don’t be complacent just because your NPS score is high: before the iPhone was launched, Nokia and Blackberry each seemed to have fiercely loyal customer bases. Where are they now? For this metric, consider friction points, digitalization potential, etc. and what is being talked about on social media.

  3. Business model risk - in our charity example, the decline of cash is putting their ability to raise funds through cash collections at risk - one that Tap Dogs has equipped them to weather more safely.

  4. Company performance risk - can you see a decline in growth or challenge to your organization’s margins? It’s better to start planning before a downturn in company performance creates a sense of desperation. After all, the budget to invest in a digital transformation roadmap (both in direct costs and in human resourcing) is much more difficult to secure when profitability is in decline.  

Let's Recap!

  • Digital disruption shows no sign of slowing, so you must constantly review ways to remove friction from your customers' experience with your organization's products and services.

  • Assessing industry risk, customer risk, business model risk, and company performance risk will give you a metric to determine how and where you are at risk from future digital disruption.

  • Be obsessively customer-focused - or someone else will take your customers from you.

Equipped with this data - and having created a culture of continuous innovation - you’ve put your organization in the best possible position to survive and thrive in the rapidly changing environment you find yourself in.

You’ve developed an organization where there is :

  • A continuous focus from the leadership on change as the new constant.

  • An open-minded curiosity about what is happening in the world outside the organization’s boundaries.

  • Obsessive attention to customer focus - if you don’t make customers’ experience of dealing with your organization better, someone else will at your expense.

  • A culture that makes it not just acceptable to take risks, but that rewards willingness to do so.

  • A culture where innovation is actively rewarded and encouraged.

You have now completed all the course chapters! Congratulations! 

All you need now is to do the final quiz, and you'll have finished! Here is a short video to wish you farewell and all the best!

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