A great deal of research and literature has been devoted to biology, nature, and evolution. Topics such as adaptation, survival, growth, innovation, environmental co-existence, symbiosis, and integrated living organisms have all been explored. But what about enterprise renewal?
In this context, the concept of a fully integrated entity is particularly relevant. And in this, the third article of my multi-part narrative on the modern-day enterprise, I’ll be looking at the concept of enterprise as a platform – and how it can help to facilitate a truly integrated operating model.
Along with position and proficiencies (which are the other areas of focus in this series), platform is one of the key drivers for enterprise renewal and renaissance as we move beyond the health crisis. Here, I’ll explain how platform is also the answer to many of the questions that have arisen this year as a result of widespread disruption and change.
Introducing enterprise as a platform
When we consider the journey ahead, no enterprise can afford silo-thinking, let alone silo execution. Every part of the enterprise is dependent on every other part and only together can they mobilize the whole.
For instance, how can one part of an enterprise deliver a truly compelling and differentiated customer experience without the supply chain performance and operational excellence to fulfill it? Likewise, how can the enterprise be attractive to employees if it fails to deliver the professional and purposeful expectations of the target demographic? And, how can any enterprise step up to the agility, velocity, and transformational demands of the market without aligned, coherent, and consistent execution across the entire entity?
The answer lies in the concept of enterprise as a platform and two dimensions are put forward here. Firstly, the interconnectedness of the enterprise. And secondly, the ability of the enterprise to sense, interpret, and respond with speed – at scale. This platform orientation is one of the primary enablers for enterprise renewal and renaissance. Without it, all the other good intentions will not be realized and we’ll be left only with incrementalism.
Interconnectedness ensures the enterprise is properly orchestrated and acting as one. It means that every process domain is in harmony with every other domain. And it means that we don’t optimize our supply chain in isolation of any other related element of the enterprise.
As we’ve seen in the current health crisis, the globalization of many supply chains has led to the optimization of one set of performance requirements – at the expense of others. We therefore need to ask ourselves if these performance requirements are still relevant for our renewed enterprise.
For example, if true customer obsession is a core operating principle in the future state, is our supply chain built and optimized for this kind of experience? If we reengineer and technology-enable our customer processes, but fail to ensure the highest quality in the last mile of customer experience – often the phase involving customer-to-human or customer-to-machine interaction – can we deliver the experience we seek? Do we lose the ROI of the reengineering and technology investment?
Platform-thinking is a way to approach and address the interconnectedness we require. It allows us to define the points of dependencies and interdependencies and to then design, build, and operate the enterprise as a collective whole versus a collection of enterprise components – sometimes siloed, loosely-connected, or independently measured.
Responding with speed
The health crisis has accelerated many aspects of change and transformation. But this level of change has been urgent for a long period of time – and let’s remember that market disruption was already prevalent before COVID-19. But to what extent? These figures help to paint the picture:
Pre-crisis enterprise landscape
- 52% of companies in the S&P 500have either gone bankrupt, been acquired, or ceased to exist as a result of digital disruption since 2000.1
- 75% of the S&P’s current members are expected to disappear by 2027, likely being replaced with many of the “digital disruptors.”1
- Enterprises have spent $1.3 trillion on digital transformation, yet around $0.9tn of this hasn’t delivered the desired results.1
Post-crisis impact on enterprises
- 97% of enterprise decision makers believe COVID-19accelerated their company’s digital transformation efforts.2
- COVID-19 accelerated companies’ digital communications strategy by an average of six years.2
- 95% of companies are seeking new ways of engaging customers as a result of COVID-192
- 92% of businesses say transforming digital communications is extremely or very critical to address their current business challenges.2
It is undeniable that rapidly sensing and interpreting change – and responding with speed – has become business critical. And achieving the agility and velocity that’s necessary within today’s enterprises has to be the result of leadership, mindset, design, and execution.
However, traditional enterprises have been built more for permanency than for change. And decades have been spent designing, building, and “burning in” or “hard-wiring” business processes. As a result, they’ve proven to be unresponsive, slow to react, and further misaligned with ever-changing market demands.
Combine this with a fundamental weakness among western enterprises to acknowledge, address, and remove barriers and other operating problems, and it’s no wonder agility and speed are the domain of management literature and hardly of management practices.
Architecting for change
A core competency going forward will be the ability to architect and design our enterprises, process domains, physical plants, and behaviors for change. Enterprise IT functions have been at the center of much work in the area of agile techniques. Lean and other management practices have been in our management psyche for decades. Yet, we tend to see only marginal adoption and impacts – certainly not the breadth and scale necessary for what lies ahead.
Current and anticipated advances in data analytics, artificial intelligence (AI) and machine/deep learning, IoT, and edge computing – to name a few – provide strong means to enable agility and velocity for the enterprise. But barriers to adopting things like AI are commonly stated as building a team with the right skill set (66% of organizations); integrating new technology with legacy systems (62%); and regulatory and compliance risks (60%).3
Additionally, the introduction of these enabling technologies without overarching enterprise architectures, operating model designs, and adoption strategies and plans, will fall far short of achieving the impacts sought and the future-readying of the enterprise.
Realizing the real benefits of digitization
If we apply the construct of enterprise as a platform to how we architect and design, we will lay the foundation for a truly integrated operating model. Furthermore, by establishing a comprehensive set of means to sense and detect market signals and dynamics, and quickly subject these to rapid assessment and suggested responses, we can begin to gain the advantages of digitizing the enterprise.
Whether opportunities or challenges are presented from competitive threat, market changes, or a major disruption, enterprises can now have the means to play offense and not be subject to a constantly reactive posture. From here, the enterprise – architected for change and re-wired for execution at scale – is now in a much better position to initiate actions that are aligned, coherent, and well-orchestrated.
Along with a commitment to excellence in the execution and measurement of results, it begins to build the foundations for the kind of enterprise agility and velocity required for the renewal and market leadership we should currently be pursuing.
However, where enterprises consistently come up short is when it comes to the lack of proficiencies and capabilities required to move forward. So, in the next article in this series, I’ll be exploring the four primary dimensions of proficiencies, which when combined, inform a journey map to help you move to a desired future state of enterprise renewal.
Get in touch with us to take a proficiency assessment and engage with our innovation experts to understand how equipped and positioned is your enterprise in applying and scaling innovation today.
And don’t forget to register to our upcoming webinar where I will be joined by a panel of experts to discuss the 3 drivers for success; Position, Platform and Proficiencies.
Read the complete blog series on ‘Beyond the health crisis’ by Lanny Cohen here