Real business model transformation is about much more than automation. It is not about having websites, web-based apps, or mobile apps. A fundamental prerequisite of transformation is having people who are comfortable with discomfort. It requires business leaders that think beyond the current structures and processes and see the potential of what transformation can bring. It requires thinking beyond organizational silos – and the only way human nature allows that is when you adopt a customer-centric model towards organizational sustainability. Amazon, Netflix, Napster and iPhone are storied examples of the external influence to established marketplaces.
When thinking about modernization, innovation, competitive edge or transformation there’s a tendency to think that success is mostly a matter of picking the right technology and toolset. This thought is further permeated by vendors selling packages that promise to bring all the benefits as part of implementation. Which technology can be an enabler is far less important than the approach toward the change in business model and mindset. Managing change is about thinking differently about the prevailing order. It requires management’s willingness to design and create a new order unconstrained by conventional thinking, and it requires a different kind of leadership to execute.
Everybody pays homage to “innovation” and “change,” but few are truly enthusiastic about the enablement it entails – the very fact that most people consider it a “disruption” is telling. As a result, changes achieved often fall short of genuine transformation. Real innovation can only come from a kind of creative destruction that is willing to let go of a comfortable status quo; it requires vision rather than mere competence. As Margaret Thatcher wisely asked, “What great cause would have been fought and won under the banner: ‘I stand for consensus?’” Consensus doesn’t lead to innovation but rather to an environment wherein we adapt to the lowest common denominator of expectations.
Among the most common examples of this “safe” conception of change is simply automating existing processes. That will allow merely competent IT professionals to coast through to their next review – and it may even result in some measure of improved efficiency. But it won’t deliver real innovation in a company’s business model. However, insurers must also avoid the error believing that salvation comes in the form of fashionable vendor offerings. The key point is that it’s never merely about automation – it’s about “solutioning.” While many are thinking in terms of automation, the real innovators are looking at the underlying business issue and what customers are really trying to achieve. They talk to real end-users, and focus on having a deeper understanding of what the customer is really trying to achieve. Once the internal stakeholders (IT, business management, intermediaries that represent the users) start learning from the real customers, they automatically give up the command and control method, and the focus changes dramatically. As a result, everyone works toward building a solution that transcends mere replication of the existing environment in automated fashion.
To reach that solution, leaders must first reconcile themselves to a fundamental reality: all organizations have their silos. All organizations will inevitably have their defined fiefdoms, and their lords will work toward protecting their turf. Seeking the consensus of business leaders will result in siloed views seeking a compromise, and that is never a good recipe. The only cure is to put the customer at the center of transformation planning, and to take a green field approach to solutioning. Transformative solutions come from people unencumbered by the way they’ve always done things rather than preserving the tried-and-true. This allows them to bring real value to their customers.