Orchestrate partner Malcolm Alder recently presented at a sell-out Australian Institute of Company Directors (AICD) briefing on responding to digital disruption at the board level. Together with Mark Kehoe, Director, GraysOnline, Malcolm delivered a joint presentation telling a tale of two companies (Williams Lea vs. Kodak) and their different responses (and outcomes) to dealing with digital disruption, as well as exploring the GraysOnline journey from a physical auction house founded over a hundred years ago to an ASX-listed online auction powerhouse in 2014.
To help companies ready themselves for the business of digital in 2015, Orchestrate is currently offering some quick, cost-effective sessions to C-suite execs to help them kick start their thinking on all matters digital for the new year – the Orchestrate Digital Thinking Summer Sessions.
In the meantime, here are Malcolm’s 5 top tips for company directors facing the challenge of digital disruption:
1 Be confident. If you’re not confident on matters related to technology, think of an area that you would be confident in eg. an acquisition or a capital raising, and ask the same questions: How will it improve our relationship with a customer? What is the risk? What is the risk of NOT doing it? How will we measure success? If the people briefing you can’t do so in plain English, tell them to go away and come back when they can – don’t fall for “geek speak”.
2 Apply Michael Porter’s 5 Forces of Competition model to your industry and business overlaying digital technology on it. Do this with a hard dispassionate eye – ideally include someone external to be devil’s advocate. Then when you’ve identified the level of risk and threat, think about how you may need to change, indeed perhaps even cannibalise your current business model.
3 Do scenario planning and consciously have someone take the role of an aggressive start up with no incumbent customer base, invested asset base or ongoing staff.
4 Consider reverse mentoring ie. find a “digital native” – someone aged 25 or younger to teach you how they use technology – not so you become an expert or suddenly start tweeting but to understand how young customers view the world and what they expect.
5 Business/operating model for transitioning to digital. There is no single answer to this – it is totally circumstance dependent.
6 Digital transformation is so much more than technology. As with any other transformation, equally important are leadership, culture development, adequate resourcing, measurement and accountability, process redesign etc.