Scaling digital disruption

Wednesday, 28 October 2015


    An article from McKinsey & Co has outlined four ways companies can implement changes to effectively carry out their digital initiatives

    Commentary from McKinsey & Co has outlined the ways that companies can implement changes to effectively carry out their digital initiatives by scaling their digital experiments "from workflows to the workforce."

    The article outlines four models for scaling digital disruption. They are:

    1. The organisational pivot – Speed is critical to disruption, yet legacy structures can block a company's ability to execute rapidly. By changing the organisational structure to prioritize digital programs, senior leadership can rapidly increase the pace of change.
    2. The reverse takeover – Some organisations have found early success by ring-fencing their digital operation, whether it is built from the ground up or acquired, so it can operate independently, unbound by legacy models or processes.
    3. The spinoff – It is not always practical to fold a legacy business into a digital division, particularly if the digital business is focused on a distinctly different part of the value chain or if it's simply not yet mature enough to absorb a bigger operation.
    4. The piggyback – Organisations can also scale digital initiatives by partnering with faster-moving innovators that have large, established digital platforms.

    For healthy digital innovation, including disruptive innovation, cyber security must be considered from the outset, said Dr Sally Ernst of the Australian Cyber Security Network. She says it is important boards should ask the following questions of their digital innovators:

    • Are you aware cyber security is a strategic imperative in our business?
    • How can your innovation process provide shared benefit to our existing resources, including cyber security?
    • How can our existing resources be leveraged to reduce the sunk cost of your innovation process, including cyber security?

    She adds that corporate innovators with good answers to these questions can gain board-sponsored access to corporate resources at a lower marginal cost against their venture or business unit profit and loss, with a structure that effectively underpins their strategy.

    "This approach allows digital innovators to think big, start small and consider the 'whole', leveraging that exists by sharing the benefits, communicating, and collaboratively executing towards the objective. It also helps grow our digital economy, while making it safer."

    "Corporate investors that shape and benefit from innovation, and that have a vested interest, can mitigate innovation risks and increase the likelihood of adoption. This investment vested-interest loop, when replicated internally to multiple stakeholders, customers, supply chains and market channels can then kick-start the change in consumption behaviour. It represents the early stage sponsorship and adoption that ultimately drives both radical and disruptive innovation success."

    For more information read the article, How to scale your own digital disruption

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