Business at the Speed of Data: A Digital Operating Framework


September 20, 2016

The billion-dollar startup was supposed to be the stuff of myth. Google was never worth $1 billion as a private company. Neither was Amazon, nor any other alumnus of the original dotcom class. But today, a mere 12 years after Google went public, there are 169 of these unicorns, all launched with valuations of $1 billion or more. 

Their collective valuation today hovers around $600 billion, all value diverted from within the market, which of course has not added $600 billion in value over that time. In fact, the annualized return of the S&P 500 over the same period, when adjusted for inflation, is a modest 3.4 percent. 

While they’ve blazed the trail, the unicorn club is not exclusive to software giants. Anything but. In fact some of the biggest unicorns sell hotel rooms, cab rides, and clothing. They sell and deliver traditional products and services, digitally, allowing them to scale, to adjust real-time against market conditions, and to attract value at a nearly unstoppable rate. 

And very soon these unicorn companies – busy disrupting and dominating traditional market sectors with digital operations – will seem quaint in comparison to the herd of $1 trillion startups that may soon be stampeding down on us all. 

In one of his last keynote speeches before his retirement, John Chambers, Cisco’s CEO of 20 years, predicted that more than one-third of businesses today will be dead in 10 years. 

“The only ones that will survive will turn their companies into digital, techie versions of themselves, and many will fail trying,” Chambers told the 25,000 attendees of a Cisco customer conference in June 2015

This apocalyptic message is cushioned by one truth: We are all capable of operating digitally. The necessary tools are prolific and inexpensive, and the mythical messengers of the digital revolution are transparent and generous in sharing their best practices. We simply have to start. We must be willing to start small, opening ourselves to feedback loops and readying ourselves for course correction. An upfront analysis does very little in preparing us to get started. Our first investment instead should be in the type of feedback mechanisms that allow gradual course correction and the celebration of successes along the way. 

Digital transformation is not an end state. It is an ongoing revolution – against business-as-usual in favor of continuous improvement, agility, automation and transparency – that will make your organization stronger, your products and services better, and your customers happier. 

Your revolution starts now.

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