Ramalytics

I’m happy to be home from a whirlwind trip to the World Economic Forum, where it was my privilege to meet and hear from thought leaders who are the shaping the world across different walks of life. Things have been hectic since my return, and I appreciated the opportunity of the long President’s Day weekend to reflect on my experiences.

During my three days, I packed in 27 sessions, multiple dinner discussions, 1 creativity retreat, and countless captivating conversations. One of my highlights was a dinner with 3 Nobel Laureates – Joseph Stiglitz, Robert Shiller, and Brian Schmidt. What an incredible brain trust!

Across my interactions, a single recurrent word stuck with me: TRANSFORMATION.

Below, I’ll dig into that and share my Davos-inspired Transformation Roadmap for 2020.

TECH LEADERS MUST THINK TRANSFORMATION, NOT PROCESS AUTOMATION

“We live in a world of disrupt or be disrupted.
Every CEO has an obligation to become the chief transformation officer.”

This exhortation from Salesforce CEO Keith Block kicked off a lively discussion about the role of leaders in the 4th Industrial Revolution. “Transformation” is a lofty word, so let’s break it down.

The WEF introduced the term “4th Industrial Revolution” (4th IR) in 2016. (See my recap here.) It describes the fusion of our physical, digital, and biological worlds, a process that started around the turn of the millennium. This fusion has undoubtedly increased over the past few years, as showed by a couple of statistics that jumped out at me in Davos:

By 2022 60% of the global GDP will be digitized.

Further, 70% of new economic growth will come from digitally-enabled platforms.

These numbers are striking if you pause to reflect. We live in a world where an overwhelming number of new sources of value (over two-thirds of them) are digital. This might be something we know, but what does it mean?

It means that every leader in every organization is by default a tech leader. Further, it requires us to understand that tech leadership is not about automating existing processes or making sure we have the fastest network or the right new software systems. Rather, it is about having the foresight to understand how the 4th IR will disrupt our organization and transform it accordingly.

My interactions at Davos suggested a few strategies for success, which I highlight in my Tech Transformation Roadmap below.

Step 1: THINK ABOUT THE SHIFT FROM PRODUCT TO PLATFORM

In the 4th IR, every company must become a digital platform to survive. Platform companies, by the Davos definition, are organizations created by common sets of utilities and data that adds value for customers. PayPal and Venmo are great examples of how a digital platform can disrupt a brick and mortar industry.

Shifting from physical company to digital platform can be a daunting step. In Davos, I was reminded that going back to the basics and asking a few simple questions can help companies successfully transition. Fundamental questions, like: “What business are we really in?” “Why do we deserve to exist as a company?” “Where can we add the most value for digitally-enabled consumers?”

In one of my sessions, I enjoyed hearing Stephanie Linnartz talk about her company’s journey from hotelier to platform. Marriot invested in consumer data to create a digital offering to compete with Expedia & Airbnb, understanding that their value comes from experiences not physical hotel buildings. They have assembled an array of villas and homes for rental via their website. And, they are looking at expanding to offer home sharing, food service, and credit via 3rd party partners. Viola, a simple recognition of their true business offer sparked the beginning of the journey from company to platform.

Step 1 Takeaway: To drive transformation from conventional company to platform, ask what business you are really in.

Step 2: CONSIDER HOW TECH CAN PROPEL YOUR PLATFORM

Every company is swimming in data, and my Davos sessions hummed with the buzzwords: quantum, edge, cloud computing, 5G. The common thread was that all of these innovations these are converging to provide 5G-driven connectivity. Tech is facilitating a faster-better-deeper understanding of the world for companies across industry.

Amidst this revolution, an interesting Davos insight: business leaders aren’t doing a great job harnessing the power of tech. Only 10% of companies investing in new technology are getting ROI. Why? Because the use cases are not well defined, and there is too much emphasis on process automation vs. transforming the business.

As leaders, we can’t necessarily predict where tech will be even 1 year from now. We can, however, be more strategic by stepping back to think about what our organization needs to do better-faster-smarter and how tech can help facilitate. We can then prioritize so that execution follows a broader transformation strategy.

At PayPal, I learned this means using real-time data to identify underserved financial deserts and make small business loans in minutes vs. the weeks required by traditional banks. For a CPG company, it might mean using data to drive innovation. Davos fun fact: did you know 1 pack of milk generate 170 MB of data? Imagine what that data could do in the hand of an AI-enabled innovation team!

Step 2 Takeaway: What business needs can your company use technology to address? What do you need to do smarter, faster, and in a more connected way? Start there with tech efforts and dollars.

Step 3: THINK CRITICALLY ABOUT THE ROLE OF AI

There was no argument among Davos attendees that Artificial Intelligence is emerging as a powerful tool. Alphabet’s Sundar Pichai expressed the view that it’s impact on humanity will be “profound,” possibly as disruptive as the invention of fire.

For leaders, the point around AI-enabled transformation goes back to the need for a high-level vision. A recent HBR article noted that only 8% of firms engage in core practices that support widespread AI adoption. Most have run only ad hoc pilots or apply AI in a single business practice. It’s not surprising, then, to learn that most organizations have had limited success, with AI initiatives failing to show ROI or scale.

I appreciate the simple and straightforward process Bain proposes to change this, which goes something like: (1) Explore potential use cases. (2) Test scalability and potential value. (3) Select 2-3 to solve the most business urgent needs and start there. It is one I am continuing to advocate and guide within my own organization.

Step 3 Takeaway: To develop an AI action plan that will return investment and scale, identify 2-3 important business needs and explore how your data can help solve them.

Step 4: HONE HUMAN LEADERSHIP TRAITS TO LEAD TRUE TRANSFORMATION

As I mentioned, one of my Davos highlights was a dinner discussion with 3 Nobel Laureates from the fields of economics and physics. A peek at my notes is revealing and maybe a little surprising for it’s lack of technical ideas or disciplinary terms…

Always important to experiment and be OK with mistakes
Make time for self-learning
The essence of learning is making new connections
Some ideas take a long time to gestate; remember science advanced one atom at a time!
Create the future by creating hypotheses about what it could look like; in this process multi-disciplinary teams provide fresh perspective and new ideas

While these luminaries come from fields quite different than my own, it was reinvigorating to discover an overlap in leadership values between their worlds and mine. Intellectual curiosity, love of learning, cultivating a diverse perspective, and accepting a few mistakes around the way. These principles have served great leaders throughout history and will continue to guide us into the heart of the 4th IR.

As we continue down the path of re-imagining our organizations for the digital age, let us take our cue from the Laureates and hone time-tested leadership qualities to help us. May we grant ourselves time for new learning and dot connecting and the courage to embrace a fail-fast approach along the way!