[Wrocław, 28 August 2022]

Two years ago, many leading strategy/innovation management consultants perceived the pandemic as a welcome catalyst to accelerate the Fourth Industrial Revolution (aka Industry 4.0). I was one of them. I wrote several sanguine articles. I worked hard to persuade my clients (major banks, telcos) to increase the scale and pace of their investment in digital transformation. I’m happy to report that the outcomes of these specific projects have been strategically and financially positive and we often greatly improved customer experience.

But at the macro industrial and economic levels, as an article in today's The Economist contends, the covid-fuelled innovation rush has not resulted in significant economic gains, such as a step-change in worker productivity. Read it here https://www.economist.com/finance-and-economics/2022/08/28/the-missing-pandemic-innovation-boom

The article posits some explanations. A key suggestion is that due to the various other, severe global market disruptions, short-term crisis management has taken precedence over investment in long-term innovation. But this does not explain why there are so few realised benefits from the innovation investments already supposedly operationalised.

The attempted explanation as to why specifically the automation boom has not improved overall productivity, as companies had already invested heavily in AI/ML, could also be even more convoluted.

In 2019, I published a series of articles titled "Radical Digital", and a couple of these focused on "Reimagining the enterprise for the digital age". Sadly my arguments then have proved to have been prescient. I revisit these now not because of some "I told you so!" arrogance, but because specifically during today’s discontinuity and disruption, we can’t continue to fail to innovate our way out of our troubles.

These are two examples of what I consistently argued in 2019/20 –https://www.linkedin.com/pulse/radical-digital-reimagining-enterprise-age-dr-piotr-ney/ and https://www.ney.world/strategic-digital-enterprise-fitness

“The transformative potential of emerging digital technology is fast outpacing the ambitions and current implementation capability of most market incumbents in both the private and public sectors. Instead of truly transforming their approach to the market, many organisations typically continue to view digital transformation principally as the digitalising of their existing business paradigms and their existing business-as-usual (BAU) operating models.”

“There is nothing wrong with this medium-term focus per se. I have myself directed several transformation projects thus defined, successfully delivering significant business benefits. A digital shift often does rapidly mobilise the virtuous cycle of improving customer experience and revenue, while reducing service cost.”

"However, this predominantly tactical focus on benefits by most organisations obscures the bigger picture and often impedes the development of more strategic (yet alone truly visionary) digitally disruptive business paradigms.”

In short, my opinion was and still is that most companies tinker with digital, rather than employing its potential to really transform their operating models. Also most do not have the skills to deliver radical digital, even if they wanted to!

Do you agree? Does this resonate with your insight and experience?

The good news is that there are plenty of highly skilled managers and consultants who can deliver radical digital innovation driven change, given the full support of their companies. The technologies themselves have rapidly matured, so the risk of operationalising them has decreased. The methodologies for radical transformation – such at the Strategic Digital Enterprise Fitness approach, which I have developed with my colleagues – have also rapidly matured, and have been fine-tuned in the trenches.

So I urge all enterprise and industry leaders to revisit digital as a strategic and radical opportunity to fundamentally change the way they do stuff, and not merely as a tactical approach to shaving cost.

As the saying goes, if you are affected by any of these issues, do not hesitate to contact me on piotr@drney.co.uk.