Executives facing the Digital Disruption are like contestants in reality TV shows: for many of them, there’s a big gap between their self-perceived readiness to perform and reality. That’s the key takeaway in a new report from Forrester Research about getting ready for the Disruption.
The report, “Assess Your Digital Disruption Readiness Now,” says that businesses have only two options: “disrupt yourself or be disrupted.” The report includes an online tool and recommendations to help companies assess their readiness and identify the changes they need to make.
This is the second report on digital disruption released last week by Forrester. The other, "How to Organize for the Digital Future," sought to convey the idea that there was no one-size-fits-all organizational model for becoming “customer obsessed,” as the Disruption is requiring.
If you thought that we had essentially already ridden the Disruption wave, both reports intend to disabuse you of that notion. In fact, it appears to be gaining speed as it continues to liberate capital, information and access to markets.
For instance, huge resources used to be necessary to bring most ideas to market, including capital, labor and factories. But now, the report notes, “you can become an Amazon Merchant, a Kickstarter entrepreneur, or a Square-enabled credit card merchant with a handful of clicks and no money down.” This leads to a boom in innovation power and an ability for disruptors to develop and maintain direct customer relationships.
The newer Readiness report, drawing on Forrester principal analyst James McQuivey’s book Digital Disruption, said that the transformation is causing “at least 10 times as many innovators" as might otherwise exist "to rush into your market while operating at one-tenth the cost that you do.”
The Disruption, Forrester says, is stronger than most companies realize, but the readiness among existing companies -- even among companies that are enthusiastic for the changes being wrought by the Disruption -- is low. The report says if you are to become a disruptor, you have to assume that mindset -- or be resigned to being a “sitting duck.”
Forrester said it has identified three elements that determine a company’s readiness. There needs to be “digital-specific enthusiasm” driving the transition, digital age skills for managing customer relationships and obtaining insight from data, and policies to encourage the creation and delivery of new experiences.
Corporate policies and culture can inhibit energy and skills, the report found. In an online survey of 285 global executives for the report, only 48 percent of respondents said their company was more innovative than competitors, although innovation is essential to making enthusiasm and skills competitively useful.
Readiness Assessment Tool
Fifty-six percent said competitors outside their industry would have an easier time gaining an advantage with digital means than their company would, and there’s a gap of 30 percent between the optimism of senior executives for making the necessary policy changes and the less optimistic assessment from the actual policy navigators lower on the corporate ladder.
To help assess where your company’s digital readiness resides in comparison to others, Forrester has set up a five-question Readiness Assessment tool, which is designed to determine if your company is below average, solidly average, variably average or above average.
Once you have a sense of where your company is, Forrester recommends four steps to prioritize a response to digital disruption. These include creating small innovation teams, working to break down boundaries between corporate silos, getting enthusiastic senior executives to lead the effort to remove policy barriers and insisting on short development time frames.