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How Digital Business Will Evolve in 2012: 6 Big Ideas

In these often-trying economic times, a tide of sometimes overwhelming change in technology and its disruptive consequences has begun rolling over our organizations. We've all seen it in the media, in our homes, at our workplaces. It's not too much to say that the entire landscape of how we work and live is steadily being transformed, one piece at a time. The root causes are fairly obvious because they're happening all around us: the Internet revolution, the smart mobile revolution, the social media revolution, the rise of the cloud, the vast new flood of information in our daily lives and the fact that we're getting more and more comfortable with technology being deeply embedded in our day-to-day activities, even if we don't always realize it. The same transformation is happening to businesses, just more slowly and often with a bit more turbulence.

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However, the current pace of change is not-unsustainable and we don't have to be — and shouldn't be — passive bystanders in the process. There's a lot all of us can do, and done smartly, locally and proactively we can actually harness change as major drivers of opportunity and business value. As I've recently explored in the Big Five shifts in technology today (mobile, social, cloud, consumerization and big data), we can actually get out ahead and modify the way we think about metabolizing technology in the enterprise and applying it to long-standing and new business challenges both. I've previously suggested 10 strategies that will help organizations restructure how they apply technology to their organizations strategically. But as activities alone they are not enough. We have to change our thinking in a way that lets us focus on what's most important as we became true digital businesses.

When it comes to businesses acquiring a digital DNA and moving out of the strictures that 20th century business thinking and operating models impose, I believe the concepts that are listed below are the core ones we need to internalize deeply within our organizations. The signature challenge: It will be intrinsically difficult, culturally and organizationally, for many to make the transition.

Most companies have an immune system that throws out ideas that are perceived as disruptive, until at last it's overcome by persistence, successful adaptation or exigency. Often the new concepts are just too foreign or there is too much vested interest in the way things are done now, and a dozen other headwinds. While creative destruction is the approach of last resort, and many organizations will be able to find their way forward without it, it must be an option on the table for organizations that want to survive for long term. The urgency is here: the mismatch between businesses today and the digital world is growing wider, not narrower, at the moment.

One need only look at a long list of organizations and industries unwilling to change quickly enough to see clear examples of what happens: the publishing industry, the music industry, the software industry and soon most other industries. One only need look at how digital businesses threatens the old business models of each to see the problem: there is often no direct lateral move to digital business. E-books, digital and streaming music, and open source/SaaS are not replacing the old business models with anything like the same revenue. They can't just pave over their existing business model with a digital road and declare success.

Businesses will have to be rethought from the ground up, including their value proposition. This is often a non-starter that's quite unpopular with shareholders, managers or workers in the short term. It is, however, highly likely to be very valuable and desired by customers and the marketplace. The long-term consequence of a failure to adapt to the pervasively networked and digital future is even less desirable however than change. It generally looks like a shrinking business over time and eventually evaporates. Organizations do certainly have to preserve what is sustaining them now, while they actively take proactive steps to transition to digital business. These I believe are the ideas that will help get them there:

6 Big Ideas For Organizing for Digital Change

1. Thinking in terms of ecosystems

Tomorrow's business environments will be much less structured around transactions and much more focused on the dynamism and value inherent in relationships. While both transactions and relationships will remain important to businesses, those with the strongest ties to their communities of workers, partners and customers will fare better than those with weaker ties. With the advent of social media, there are now lightweight and readily scaled ways to create networks of relatively closely held and productive business relationships. This will change how business gets done and who the leaders are.

2. Managing businesses as networks of people

People are moving back to the center of business, where technology and automation previously reigned. People will form the core, but so too will the new infrastructure that businesses operate in, which increasingly is all the elements of today's digital networks, including social media, new user experiences with mobile, touch, video and telepresence. For the first time, this infrastructure now also includes something known as social capital. This is the sum total of the formal and informal connections one has with people and organizations in the digital world and defines the reach and power of the modern business ecosystem.

 

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