Brilliant examples, great ideas. I am a big fan of what John Kotter is saying about the need for organisations to develop a dual operating system: balance business as usual with the need for change. This book further develops these ideas and give some great examples of how it is possible without down playing the complexity. I highly recommend this book for any of us involved in organisational change and transformation.
In an article written by Scott Anthony for Harvard Business Review, he observes, "Today’s corporate watchword is transformation, and for good reason. One study suggests that 75% of the S&P 500 will turn over in the next 15 years. Another says that one in three companies will delist in the next five years. A third shows that the “topple rate” of industry leaders falling from their perch has doubled in a generation. Software is eating the world. Unicorns are prancing unabated. Executives at large companies rightly recognize that they need to respond in turn.
"When executives say transformation what do they really mean? Often, the word confuses three fundamentally different categories of effort.
"The first is operational, or doing what you are currently doing, better, faster, or cheaper. Many companies that are ‘going digital' fit in this category — they are using new technologies to solve old problems…The next category of usage focuses on the operational model. Also called ‘core transformation,’ this involves doing what you are currently doing in a fundamentally different way. Netflix is an excellent example of this type of effort…The final usage, and the one that has the most promise and peril, is strategic. This is transformation with a capital ’T' because it involves changing the very essence of a company. Liquid to gas, lead to gold, Apple from computers to consumer gadgets, Google from advertising to driverless cars, Amazon.com from retail to cloud computing, Walgreens from pharmacy retailing to treating chronic illnesses, and so on. Executed successfully, strategic transformation reinvigorates a company’s growth engine. Poor execution leads naysayers to pounce and complain that a company should have ‘stuck to its knitting.’"
All this helps to create a context for a discussion of recently published Dual Transformation, a book Anthony co-authored with Clark Gilbert and Mark Johnson. To what does the book’s title refer ? They explain how and why combining the assets and benefits of scale and entrepreneurial spirit will drive massive impact for almost any organization, whatever its size or nature may be.
They observe: “When you take your first algebra class, you’re introduced to the Greek letter delta. The capital form of the fourth letter in the Greek alphabet, Δ also serves as shorthand in math equations for change. The kind of change we’re talking about here is indeed a very large delta. Achieving that change requires following this formula: A + B + C = Δ
“Here’s how it breaks down:
A = Transformation A: Reposition today‘s business to maximize its resilience. B = Transformation B: Create a separate growth engine. C = The Capabilities link. Fight unfairly by taking advantage of difficult-to replicate assets without succumbing to the sucking sound of the core.
“The formula’s simplicity belies the complexity of its execution.”
This formula can guide and inform the transformation of almost any organization, whatever its size and nature may be. Leaders in most organizations most pose and then determine the appropriate answers to the same key questions. In this context, I am reminded of an incident years ago when one of Albert Einstein’s faculty colleagues playfully chided him that he always asked the same questions on his final examinations. “Quite true. Each year, the answers are different.”
Here is a covey of such questions:
1. Which disruptive trends have the potential to change our competitive landscape?
2. What is the new way we will compete in today’s core? [Indeed, what is today’s core?] What old metrics are no longer relevant? Which new ones are?
3. What are the most exciting growth opportunities that are now options for us?
4. Who will be our new competitors? What new capabilities will allow us to win?
5. How will we sharpen current capabilities and build new ones?
6. If we successfully execute, who will we become? What will be different? What will be the same?
7. What organizational changes will maximize our chances of success? What things, if we don’t change, will inhibit success?
Scott Anthony, Clark Gilbert, and Mark Johnson help those who read this book to answer these and other key questions, then to apply the answers to the given situation.
Those who share my high regard for this book are urged to check out The Three-Box Solution: A Strategy for Leading Innovation in which Vijay Govindarajan provides what he characterizes as “a simple framework that recognizes all three competing challenges face that managers face when leading innovation.” That is, simultaneously managing today’s business while creating tomorrow’s and letting go of yesterday’s values and beliefs that could keep the company stuck in the past.
How do you reposition the business of today to react to oncoming disruptive technologies so that you have a business for tomorrow? That is the thorny question posed by the authors who seek to help the reader prepare their business for a possibly bumpy, uncertain ride.
The book sets out to offer practical, sustainable and actionable help that may see the business emerge as a stronger entity, whether it is impacted or not by oncoming technologies and their disruptive waves. In any case, it may be something you cannot afford to ignore, so whilst no guarantees can be given for future success, it does not hurt to consider the alternatives. In fact, there may be no real option to do anything else.
Case studies from many top companies and even one of the author’s own companies has been mixed in with experience, insight and research to describe a process and adapted business model that can help respond to disruption with a three-prong new value proposition. It made for interesting, thoughtful reading and the reader is given sufficient information to work on their own reactions.
It was an enjoyable, informative read that was easy-to-follow thanks to the open, accessible and often humorous language deployed. This narrative-style worked well, something other business books could well consider. The book should be something senior executives consider, viewing it at least as an insurance policy to verify that their metaphorical house is in order, and for those who need it, it may be a new set of architect’s drawings to urgently renovate the company before the harsh winds of technological disruption start blowing around the neighbourhood.
Transformation is all around us and no industry is immune. This book really helps us to think about the link between core business and new world and how we manage the duality of both. Well worth a read.