Ridiculously popular, companies like Uber, Air BNB, and Liquidspace, are born yesterday on a public cloud infrastructure with little or no overhead and they’re giving the big traditional brands a run for their money.
In some cases, these small, nimble organizations are eating the lunch of established businesses, and are all too often catching management off guard when they start to steal market share.
The question that should be top of the agenda in the boardroom is “what do we do?” And if this question isn’t being asked, it needs to be.
Executives of all stripes are wrestling with how to respond and stave off disruptive organizations while taking advantage of things like cloud, IoT, big data and analytics, and actively strategizing about how to become more of a digital enterprise or a digital company or a digital business.
Why? One of these dynamic, flexible organizations is likely already looking at how to steal their customers.
Those who are looking ahead will be at an advantage. Just look at Walmart. The world’s largest retailer is looking for inspiration from the very start ups who might have otherwise become competitors. Earlier this year, they announced an open call for technology innovation to “tap the ideas of small companies to help come up with the tech to support where shopping is heading next”. It’s an interesting way to stay in touch with innovation or threats on the horizon.
A Seat at the Big Table
The fact questions about building a digital enterprises and the role of IT in business strategy have created a shift in the boardroom and it’s something I have to admit I’m excited about.
As few as five years ago, many boardrooms weren’t talking much about IT. In fact, many CIOs took a back seat when the efficiency wave swept through the business community 10 years ago when IT was viewed as overhead, a necessary evil and of no strategic, competitive advantage.
Cybersecurity became a huge issue and, BOOM, IT is now a boardroom level discussion. And who is the first person they bring into the boardroom to educate them about this thing called cybersecurity? The CIO because he or she is the most qualified.
More than one-fifth of the board of directors on the Standard & Poor’s Index have said they are looking for a director who is expert in technology. I think this is an excellent sign for the future.
The boardroom is the right place for strategic technology conversations because IT has moved from being a necessary evil to a driver that can help traditional businesses evolve into the digital business of the future.
A Question of Survival
Is the boardroom ready? The answer isn’t so simple.
‘Too big to fail’ isn’t a reality anymore when you consider 40% of Fortune 500 companies 10 years ago aren’t on the list any more.
The best boards are ones that are having the discussions and looking to the future and what’s possible. They’re turning their business models upside down and recognize that competitors aren’t just in their own backyard but operate globally and are coming.
I can tell you the question is quickly becoming one of survival, and the next question is how to grow and get one step ahead of these market disruptors.
Competing to Win
It’s a question progressive companies are looking at carefully, even Intel. We’re leveraging technology and rebuilding our brand so we have a bit more attractiveness and cachet to the Millennials and the generation right behind them.
No doubt about it, digital disruption and transformation is a huge, huge issue and the question is: are the boardrooms prepared or not?
Some are. Some aren’t. Time will tell (but the clock is ticking).
It’s estimated that, on average, an S&P 500 company is being replaced about once every two weeks, so by 2020 the average age of a Fortune 500 company will drop to 12 years from an average age of 60 years back in 1960.
Our traditional, old, stodgy companies are going to be replaced, go out of business, get absorbed, or become irrelevant. That’s why I say that today’s organizations are in a fight for their lives, especially the big, established brands.
They need to figure out how to grow and become a more attractive employer. Many of the answers they’re seeking are enabled by technology, which is why I am so bullish on information technology, despite the opinion of pundits who say there’s not a lot of growth left in our industry. If you look at the disruptors and what organizations need to do to compete, technology is a key strategic enabler.
So, before you get run over by one of these born on the cloud disruptive companies, it is past the time to talk about IT in the boardroom and start taking action, before you’re hit by a disruptive enterprise driving the truck you never saw coming.