Overcoming Risk to Achieve a Virtuous Cycle of Growth

We’ve recently explored a lot of the benefits that digital transformation can bring to your organization. When planning how you’re going to bring them to life in your own business, it’s important to bear the risks in mind as well.

Firstly, there’s the risk to your business itself of suffering a cyber attack. Although it’s often large household names that make the headlines when they suffer a breach or a loss of customer data, according to Microsoft 20 percent of small to mid-sized businesses[1] have been targets of cybercrime. As your company’s digital footprint increases, so does your attack surface.

Then there’s the risk to your employees. At the beginning of this blog series, we talked about industrial revolutions, and even as far back as the 18th and 19th centuries[2], there was concern about the impact on jobs in the textile industry of introducing technological innovation. Suspicion of new technology is nothing new and often social acceptance is hard to earn.

And then there’s the broader, industry-wide risk of legislation struggling to keep up with the rapid pace of technological change. This can lead to friction and frustration with new business models—just look at Uber, the poster child of digital disruption. Despite its success, it has faced objections from existing taxi drivers and been challenged in court[3] over the rights that it must provide drivers in its network. The issue of data sovereignty has also become a concern with the rapid adoption of cloud computing. Do we know in which country the data about our business or our customers resides, and who exactly has access to it?

While it may be tempting to "wait and see" what others do to deal with these issues, this approach can actually create more risk. As you ponder your next move, your competition may well be making theirs, and reaping the benefits from it. Take the plunge and reinvent your business processes or models through innovation, but make sure you’re prepared. Do your homework, take advice, and seek best practices to learn from and emulate. Find trusted suppliers who can help you scope, understand and combat the risks to your business while using technology to drive disruption of your own, and your competitors’ businesses.

When talking to customers who have been through these transformations, I generally find that the most successful—the ‘digital champions’ of disruptive companies—are those that have demonstrated hyper-agility and rapid responsiveness to change. These organizations tend to share two main characteristics:

1. The Right Culture

The first thing to think about when driving any kind of transformation—digital or otherwise—is people and culture. If you’re asking your workforce to do things differently, it’s not going to work if they aren’t engaged and supported. To drive change, you need innovative thinking and behavior, maybe even a bit more risk taking (within reason), but this may feel counterintuitive if it’s a big change from your existing culture. So innovation must be visibly encouraged and incentivized. Employees must be assured that if they take a risk that doesn’t succeed, that’s okay. They can learn from it and move on.

Along with innovation must come velocity. As I’ve explained, the pace of change in business is accelerating, so in order to keep up, employees must be able to innovate at speed. This doesn’t mean rushing or doing a sloppy job, but acting with a sense of urgency and a desire to drive the business forward. It’s up to the organization to provide them with the right tools to enable this, which I’ll cover in more detail below.

It’s also important to encourage openness. Employees used to being assessed on the basis of individual performance may not be used to the idea of collaborating. However, creating transformational ideas can’t be done in isolation—it requires idea sharing and collaboration to unlock the insights that are hidden in the company’s collected knowledge.

And finally, work practices should drive and reward accountability. They must be led and role-modeled by upper management, and supported with the right guidance and training for employees.

2. A Business Outcome Led Digital Foundation

The other characteristic we see in digital champions, is that they have the right digital platform upon which to innovate and empower their people. This foundation must deliver a set of meaningful, digitally enabled business outcomes and typically covers six main areas, many of which are being driven by the Fourth Industrial Revolution:

  • Data-Driven – transforming the business with trusted, real-time big data, analytics and artificial intelligence (AI)
  • Smart World – driving operational excellence and revenue via extended insights using technologies like the Internet of Things (IoT), 5G connectivity, and autonomous cars
  • On-Demand – reducing IT and operational technology costs, and increasing agility with multi-cloud environments
  • Trusted – reducing business risk, and protecting brand value with cyber security and privacy
  • Connected Experience – winning and retaining customers with stunning connected experiences through perceptual computing, the use of virtual, augmented and merged reality, or by applying cognitive systems
  • Innovative Workforce – igniting innovation and productivity through transformed workplaces. From connected meeting rooms to flexible office spaces that support solo, 1:1 and group working, smart workspaces can help boost productivity and employee satisfaction. On the factory floor, robotics can make workers more productive and safer by removing workload and providing additional support. At a management level, smart advisors can help employees make smarter decisions by providing decision support and proactively providing relevant insights from data.

When you combine two or more of these capabilities, the magic starts to happen. An example familiar to everyone is Amazon. If you’ve ever received a recommendation based on your last purchase or what similar customers have bought, then you’ve seen their data-driven business at work. The company also provides a strong connected experience, enabling customers to use any device, from PCs and tablets to newer classes of gadget like Dash buttons or Echo devices. The workforce is innovative too, with workers using robotic shelves that bring products to human packers to help speed the fulfillment process. Smart world technologies like delivery drones[4] are also now making an appearance.

The Virtuous Cycle of Growth

It’s likely you’re already considering some of the areas I’ve outlined here. We’re thinking about them a lot at Intel as well. As part of our response to the changing nature of our markets, we published a strategy and plan[5] that outlines our focus investment areas in something we call the Virtuous Cycle of Growth. This is based on the idea that in this smart, connected world, nothing happens in isolation. Everything from the app on your phone to the air conditioning unit in your office is connected to the cloud, which gathers data, interprets it and provides insights. Adding technologies like new memory (such as 3D XPoint™ technology or Intel® Rack Scale Design), software and security capabilities or field-programmable gate arrays (FPGAs) and silicon photonics to this constant data cycle helps increase its value significantly.

At Intel we’re helping to create the best experiences by enabling an end-to-end open architecture with embedded security capabilities. We work with a broad ecosystem of software vendors to enable the elements of the virtuous cycle. This in turn can help you give your business the open, interoperable and capable technological fabric it needs to underpin its digital transformation.

As we close this blog series, I hope I’ve given you some food for thought on how your business can seize some of the opportunities presented by the fourth industrial revolution and digital fusion, and how you can use technology innovation to help strengthen your economic, social and environmental bottom lines. I’ll leave you with two questions: can you afford to ignore these opportunities? And, who is accountable for driving change in your organization. If it’s you, what’s your next move?

© Intel Corporation. Intel, the Intel logo and 3D XPoint are trademarks of Intel Corporation or its subsidiaries in the U.S. and/or other countries. *Other names and brands may be claimed as the property of others.
Published on Categories Digital TransformationTags
Andrew Moore

About Andrew Moore

Andrew is the General Manager of the Digital Transformation Office in Intel’s Industry Sales Group. The role involves developing a set of progressive but actionable approaches to helping key customers define and start executing meaningful transformation strategies. The goal in doing this is, ultimately, to forge strategic and symbiotic relationships with the some of the world's leading organizations and in doing so raising Intel's profile and role as a true thought leader in the world of digitization.