Disruption and digitisation may often go hand-in-hand, however for businesses seeking to stay ahead of the curve it is important to draw a distinction between the two.
Charles Galunic, INSEAD professor of organisational behaviour, writes at INSEAD Knowledge his research indicates companies can develop their value propositions via digital means without implementing widespread changes.
“Companies can become more digital without necessarily overturning their business models,” Galunic writes.
“But because digitisation can lead to disruptive movements, companies have to be good at scanning the landscape for developments, absorbing them and exploiting the opportunities.”
Based on insights from interviews with executives and managers dealing with digitisation, Galunic explains interviewees pointed to the importance of scanning for “present-and-future threat combinations”.
One interviewee explained their organisation has a special team specifically focused on scanning for new developments.
“The same interviewee also explained that their company had a strategy review process at the level of the CEO’s office,” Galunic writes.
“Its purpose is to constantly re-examine the strategy, what is changing, what is working and what the firm has to adopt, prioritising the biggest threats.
“The lesson here is that the scanning needs to be linked up to strategic planning and senior decision-makers.”
At an internal level, it is important companies encourage creative and collaborative processes in promoting their digital progress.
Galunic writes “there is no single blueprint for monetisation of digital opportunities – that is, no ‘winning strategy’ for all”.
“Rather than a ‘lone genius’ model where one ‘guru’ comes up with the design of all things digital, the required logic that emerged from organisations we interviewed was recombinant thinking, or a creative collaboration of multiple people or groups.”
Organisations are branching out from traditional research and development models, and are employing various types of structures to assess ideas and techniques that allow them to stay nimble.
Taking the user’s point of view is also an important focus for organisations, with “respondents emphasising the importance of really understanding the target audience for their products or services”, while releasing a prototype can help to test ideas quickly.
“To sum up, decision makers need to consider whether – given their product, market and context – to invest in a heavier front-end process (taking more time to understand what the user really wants) or heavier back-end process (prototyping, experimenting and testing),” Galunic writes.
“One size is unlikely to fit all.”
A common theme among these businesses is that “they involved many more people than is typically the case in core innovation work”, pointing to the importance of having a collaborative workplace and strategy in place when going digital.
Martin Kovacs is a journalist with experience covering the IT, consumer electronics, retail, finance and energy sectors.
