Two new studies this year reflect a fast changing digital landscape where the separation between forward thinking, mature organizations and all others is widening. The pace of business globally is accelerating, putting enormous pressure on all types of industries, especially professional services. To get ahead of the digital curve, companies not only need to adapt and adjust to new technologies—they also must identify the leaders and champions within their organizations that can navigate through the current digital disruption that, even now, is impacting bottom lines around the world. The good news, according to MIT Sloan Management Review and Deloitte, is that many companies are beginning to make the necessary changes to adapt their organization to today’s new digital environment.
Living in a Digital World
Based on a global survey of more than 4,300 managers, executives, and analysts, and 17 interviews with executives and thought leaders, the MIT study reveals that the digital business environment is fundamentally different from the traditional one. They report: “Digitally maturing companies recognize the differences and are evolving how they learn and lead in order to adapt and succeed in a rapidly changing market.”
The number one difference between traditional and digital is pace of work. And since all work as we know it is transforming and adapting to digital, the pace is not likely to slow anytime soon. As companies retool and align with new digital technologies, they will become more competitive, agile and adaptable to changing market conditions.
Challenges for Creative and Professional Services Businesses
This year’s study of the State of the Services Economy revealed that in just one year the conditions have changed. If you see yourself in these statistics, you’re not alone. Most believe it’s getting harder to run a services business and over half report things are changing faster than ever.
The study identifies four trends that have emerged as powerful forces shaping the future of work in Services Industries:
• Adapting to Heightened Client Expectations
• Centralizing Resource Management
• Closing the Gap Between Adoption of Tools and Collaboration
• Enabling a Modern Technology Infrastructure
We’re in the age of both digital disruption and radical innovation, which can cause many professional services firms to cringe at the implications. Why? Because how these firms adapt to change determines their success. The study identified the top challenges these firms face:
Meeting these challenges by merely adapting to fit in with a trend will not be sufficient for this next wave of global technological disruption. A total makeover seems more strategically sound. So what kinds of changes can be expected? There are many. For more on change management and the impact for professional services organizations, visit my previous blog post.
Ready or Not
On the face of it, services organizations have it easier than most when it comes to managing change. Being people-powered, it is a matter of discipline and having the right technology tools like PSA or ERP. But what about other companies being swept up in the new digital revolution? According to the MIT/Deloitte study: “A key challenge posed by digital disruption is that a fast-changing digital environment requires more exploration and experimentation than most companies are prepared to manage. Experimentation is at the heart of digital maturity.”
Other challenges include everything from fluidity in the processes to workforce augmentation. All of these challenges cannot be managed one at a time as these broad transformations require all of the systems including digital tools, cultural mindset and change leadership are in sync.
Maile Carnegie, group executive of digital banking at financial services firm Australia and New Zealand Banking Group (ANZ) Ltd. of Melbourne, Australia, says: It’s fascinating how some young, digital companies experience failures every single day in their efforts ‘to achieve their purpose, and they’re comfortable with it.’ She notes that comfort “starts with the audacity of their mission,” whereas many established companies have a “fear of failure baked right into” their culture.
Failure is Only an Outcome
With change swirling around virtually every business and industry, it is only natural to want to put on the brakes and make what’s working now last a bit longer. Waiting however is not an option. If companies don’t adjust and embrace today’s new digital and global economy fast, they could miss out on opportunities and be passed by fast moving competitors that they’ve never heard of. Yes there may be set backs and learning curves and failures, but such is the nature of revolution and transformation. That’s how we learn and that’s how we grow.