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We know from Stephen Covey that values govern people’s behaviour, but principles determine consequences. In the way that Covey encouraged us to utilise key leadership principles, so THRIVE is intended to encourage leaders to draw from six digital business transformation principles to equip themselves for the digital economy challenge.
THRIVE is an acronym made from these six words:
Leaders need to adopt these six guiding principles if they are to survive and thrive in the face of disruptive innovation.
The Digital Economy Challenge
The digital economy is developing at an astonishing rate and is the single most important driver of innovation, competition and growth. This new era is changing our lives, from the way we socialise, shop, and entertain ourselves, to the way we learn, work and communicate.
Traditional industries and value chains in every sector are being re-shaped by business models that have never existed before, and customer expectations are rising rapidly. There should be no doubt that the digitisation of the economy is one of the most fundamental transformations we will experience in our lives.
The digital economy presents huge potential for solo entrepreneurs, small, medium and large companies, but the majority of firms are not taking full advantage of it. In fact the European Commission has announced:
“ Unfortunately, only two percent of European enterprises are currently taking full advantage of new digital opportunities”.
This is worrying when considering the fact that successful adoption of digital technologies will be a key success factor for any company’s ability to thrive in the digital economy. The European Commission added, “Businesses that fail to get digitally connected will become excluded from the global market”.
No Barriers to Entry
There are no barriers to entry for innovation and the transformation it inspires. The hardware and software that was once limited to those who could create or afford to buy it, is now readily available and affordable to almost any company large or small. Even the sole entrepreneur now has affordable access to technology that was not so long ago off limits to all but wealthy companies.
The only real obstacle that stands in the way of companies transforming their companies to thrive in the digital economy is a lack of the right capabilities – from leadership down. Because the operational capabilities that enabled companies to be where they are now, are not the transformation capabilities they need to thrive in the digital economy.
This ease at which any company with the right leadership mindset and capabilities can now innovate, digitise and transform, introduces a new threat to established incumbents, because they now face competition from businesses that were unable to complete in the pre-digital economy. Companies led by complacent executives face a serious threat in their rear view mirror.
The Dollar Shave Club Example
Just look at how the Dollar Shave Club sliced themselves an eight percent share of the three billion dollar global shaving market in less than five years of existence, stealing profits from under the nose of the 115 year old global giant Gillette. This would have been impossible in the pre-digital era. But the world has changed and more companies than ever can now compete for market share without many if any, tangible assets.
My Own Example
While I advise and guide some of the world’s biggest brands on transformation, and lead initiatives on behalf of large tech firms, I don’t have the luxury of corporate budgets at my disposal when it comes to equipping my own business for the digital economy.
But for the reasons described earlier, that hasn’t stopped me from complementing my traditional consulting business model with a new digital business model. While previously I could only help a small handful of clients at any one time, now with a little innovation, digitised business processes, and a digitised product, I can help thousands.
The point is, with some entrepreneurial spirit, the right leadership mindset and transformation capabilities, companies of all sizes no longer need access to ridiculous budgets which line the pockets of large consulting firms. Any leader, whether a CEO of 100,000 or 10 people who suggests otherwise, is simply excusing themselves from seizing the tremendous opportunities that are in front of their noses.
Navigating Digital Disruption
Not all leaders appreciate the lifecycle of disruption and they are lulled into a false sense of security by their current profits. This is digital myopia in action, and can pose a serious risk to any company. Watch the video below in which Chris Bradley from McKinsey talks about the the disruption lifecycle, and how leaders can help their companies thrive in the digital economy.
Learn THRIVE Fundamentals
The six guiding principles of THRIVE digital business transformation can equip leaders to steer their firms into the digital economy. They are principles that every company needs their leaders to embrace – regardless of industry.
You can enroll in a free online course to learn more about THRIVE at: studythrive.com
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