Why 95% of Transformation initiatives are doomed to failure
Digital Disruption caught a high speed train. It's in town peering around corners and peeping through windows. Companies and their Boards’ should be afraid of Disruption. Market Disruption is never kind and no company, big or small, is immune. The question is, how will they react to their fear? Will they circle the wagons and digitally shore up the plumbing hoping the Digital Wolf moves on? Will they grab Digital by the throat and becoming Disruptors themselves?
I’ve recently engaged with (3) companies failing Digital Transformation. Their Goodbye is highly predictable and the root cause is the wrong CEO.
Company #1 is attempting to jump markets without understanding the required digital technology that enables Outcome success. The CEO “has an idea’ but mistook CRM for a customer contact solution. Given AI and AR disruption, there will be little to no need for contact solutions within (2) years. The CEO is not a technology or software experience leader and he is not a transformation leader. The company’s operating plan and RTM are dead wrong for their market and costs will likely burn them up before disruption gets them. Bad Operating Plan.
Company #2 is attempting to jump markets and enter the low cost lead generation sector. A very crowed market with a customer ROI running between 2% and 6%. Given Cognitive Software and AI disruption, lead generators will disappear within (3) years. This CEO comes from a Big Ticket Destination Website background where customers transact every 3-5 years. The new market's customers must generate (8) daily transactions to survive. This CEO did not know the basic financial metrics of the current business and is unable to effectively harvest investment funding new business. Bad Market Assessments.
Company #3 has a rare perpetual license giving them the cognitive search component of IBM’s Watson software. The CEO thought IBM would blow the Watson opportunity and even emailed IBM’s CEO to let her know she was clueless. Yesterday IBM announced Watson’s new security threat management capability and disrupted the entire security industry. This CEO fell in love with satellites and is driving his company to become the search provider for satellite mobile users. He’s investing in ground station servers to accommodate his Vision. Satellites cost roughly a billion dollars to launch and drones are quickly adding wireless hotspots in remote areas. This CEO was given the Cognitive Threat Management Vision but chose Satellite Mobility instead. Bad Vision.
Transformation is the new Buzz