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Scanning and Responding to Digital Change

Digitisation requires organisations to keep a keen eye on the horizon and respond by bending their processes.

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Most forms of disruption today are about digitisation. Netflix has revolutionised the way people experience videos, providing non-linear viewing (unchaining us from TV guides) and easy access (no DVD rentals).

But there are a multitude of ways digital products, data and processes can be used to create novelty and value without necessarily “disrupting”.

It’s worthwhile distinguishing digitisation from “disruption”— the latter is more about radical upending of business models, often by people or companies well outside of the targeted industry. However, digitisation includes how incumbent companies alter and expand their value propositions by harnessing digital means.

Companies can become more digital without necessarily overturning their business models. But because digitisation can lead to disruptive movements, companies have to be good at scanning the landscape for developments, absorbing them and exploiting the opportunities.

In the previous two articles in this series, we looked at the mindset needed for digitisation and the sort of people organisations need for the journey. Based on insights we gleaned from interviews with executives and managers at the forefront of digitisation, we now turn to how organisations can track disruptive threats and respond to them.

Tracking storms

Our interviewees said that it is important to scan the environment both to understand what is happening and to determine what is possible and most likely to occur. In other words, scanning should involve present-and-future threat combinations.

One respondent told us, “We have a special team, called the ‘FinTech team’. They are a small team but they are just scanning all over the world for developments. They go to conferences, they go to Silicon Valley. They really look at the disrupters that could potentially threaten us.”

The same interviewee also explained that their company had a strategy review process at the level of the CEO’s office. Its purpose is to constantly re-examine the strategy, what is changing, what is working and what the firm has to adopt, prioritising the biggest threats. The lesson here is that the scanning needs to be linked up to strategic planning and senior decision makers.

Ideation routines

Staying current and attuned to the outside world is important, providing digitising companies with a window into inspiration and potential threats. But perhaps the core of digitisation is what happens next, which is ideation—the creative process of moving from inspiration to innovation.

This is because there is no single blueprint for monetisation of digital opportunities—that is, no “winning strategy” for all—but rather it is vital that companies construct creative and collaborative processes to search these new spaces, recombine existing resources and define their own digital path.

Rather than a “lone genius” model where one “guru” comes up with the design of all things digital, the required logic that emerged from organisations we interviewed was recombinant thinking, or a creative…

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INSEAD Knowledge is the expert opinion and management insights portal of INSEAD, The Business School for the World. Knowledge showcases the latest business thinking and views from award-winning faculty and global contributors

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