Conquering Risk-Aversion in the Age of Digital Transformation
In technology, change is a constant. True to form, we’re currently traveling at warp speed on the Starship Enterprise, with the explosion of breakthroughs in Cloud Computing, IoT, Artificial Intelligence, Machine Learning, Virtual Reality and Augmented Reality. These advances, empowered by substantial advances in software, will buttress the creation of new human-machine partnerships1. The Digital Transformation will rock this planet in ways we can’t even imagine now and not seen since the Industrial Revolution.
Of course, there will be winners and losers. The winners will be the ones who step out in front and take the most imaginative risks.
In a recent interview with Forbes, Michael Dell points outs “It’s important to recognize that Cloud Computing isn’t a place, it’s a way of doing IT.” Whether public, private, or hybrid, the technology is now used by over 70% of U.S. organizations. This figure is expected to grow further, with 56% of businesses surveyed working on transferring more IT operations to the cloud 1.
A more recent study entitled “The Era I Enterprise: Ready For Anything,” finds that organizations are struggling to meet the technological expectations of their customers, and a large majority of those surveyed (81%) think that cloud services will give them the processing power and scalability to meet demands—yet only 28% have adopted them so far2. By 2030, cloud technologies will be so entrenched in how companies achieve their goals that memories from the pre-cloud era will feel positively archaic by comparison3.
As organizations grapple with their cloud transformations, whether they will succeed depends on their strategy. Are they shoveling data into the cloud because that is what is expected of them, or are they following a well-planned vision that propels their business into the future? This distinction is crucial: “The strength of digital technologies — social, mobile, analytics and cloud — doesn’t lie in the technologies individually. Instead, it stems from how companies integrate them to transform their businesses3.”
In other words, their ability to reimagine how to use their data to get ahead of their competition is determined in large part by a clear digital strategy. Of course, the strategy must be reinforced by the organization’s leaders, sold to and embraced by their employees, and fostered by the organizational culture. But it starts with a vision, and that vision must first hurdle over a major obstacle: Risk Aversion.
“Hah!” You may say, “risk-taking has always been indispensable to every successful evolution.” However, what is unique about the current Digital Transformation is that an extremely high risk-taking quotient is becoming the cultural norm as more digitally-advanced enterprises seek new levels of competitive advantage3.
Risk aversion is a grave impediment that plagues all organizations, but especially the well-established ones: “For every Google, Amazon or Facebook taking major risks, hundreds of large companies are still playing it safe,” says Phil Simon, author of several books on how technology impacts business3.
The Little Black Book of Billionaire Secrets says that all authentic change goes through four stages: 1) Anticipation; 2) Regression; 3) Breakthrough; and 4) Consolidation. Anticipation is the exciting stage of change where we anticipate the benefit of the change and make our transformational plans. Regression is when things get worse before they get better. Breakthrough is when we finally see the light at the end of the proverbial tunnel. Consolidation is when we turn the benefits of change into business as usual4.
“It is not change per se that people fear. We fear that the regressive stage of change will become permanent. As a result, we tend to ‘ring out the risk’ by looking for an evolutionary and incremental change model that skips over the regressive state. However, this is like expecting to change your golf swing without getting worse before you get better4.”
My advice? Rip off the band aid. Connect with your inner Captain Kirk – the one who takes the plunge without fear of the consequences. But first, focus on creating a Perfect Vision – a robust roadmap that will enable your enterprise to ride the crest of the Digital Tsunami.
And Edge can help you with that.