SERVICES: The Business Revolution

Integral Strategy Network is working with organizations at the frontier of transformative change, helping to reinvent their business.

Digital Transformation

Waves of change in information and communication technology have triggered massive disruption in business, based on exponential gains in computing power and the growth of the Internet. New technologies are transforming entire industries and restructuring the economy. The next wave of change will be so deep and far-reaching many are calling it the Fourth Industrial Revolution.

Using these technologies to reinvent a business and redefine an industry is referred to as digital transformation. Organizations will work differently in the next digital era. Cloud computing, mobile communication, the Internet of Things, big data, analytics, robotics, artificial intelligence, and blockchain are all growing in importance. Digitization will be essential for success and survival. In a recent McKinsey study only eight percent of the companies surveyed said they expect their current business to remain viable if their industry keeps digitizing at the current rate. Since 2000, 52% of companies in the Fortune 500 have either gone bankrupt, been acquired, or ceased to exist. In 2015, more than half of the Fortune 500 companies failed to make a profit.

Digital transformation is shrinking the revenue growth of incumbents at an average rate of 3.5 percent a year, McKinsey’s says, and the figure is as high as 12 percent in some industries. McKinsey says emerging digital ecosystems could account for more than $60 trillion in revenues by 2025, equal to more than 30 percent of global corporate revenues. Amazon is a digital juggernaut, accounting for 44% of all online retail sales in the United States in 2017, up from 38% in 2016. Uber and Airbnb are also prime disruptors. Trying to preserve the status quo is no longer an option. First movers and fast followers have a clear advantage.

Many other industries are ripe for transformation. Insurance is just one example. Digital technology, data, and analytics will make it possible to know customers better. Policies can be tailored to customer needs, and priced and underwritten more accurately. Customer profiles and data on customer behavior can be used to predict risk, reduce risk, and detect fraud. Insurance companies will also be able to identify and pursue low-risk customers. Like other industries before, the insurance business will be disintermediated. Increasingly, consumers will purchase their own insurance online. Insurance brokers will only remain relevant by offering highly-responsive, customer-centric online services.

The Challenge of Change

Digital transformation is not about automating an organization’s legacy business.  When transformed, a business has to satisfy radically different customer expectations and needs, and create value in new, breakthrough ways. To transform, businesses have to rethink the customer experience, their business model, and critical business capabilities.

Many change initiatives haven’t worked out well. Research conducted by McKinsey and Oxford University found that half of all large information technology projects – those with initial price tags exceeding $15 million – experienced massive budget overruns, and less value was delivered than expected. Failures have been attributed to lack of clear strategic goals, breakdowns in cross-functional coordination, lack of transparency, lack of agility, ineffective deployment of resources, and top-down control that diminishes effective decision-making, initiative, and ownership of results.

Organizations are struggling with complexity.

Integral Strategy

Digital transformation requires a shift in focus and new skills. Integral Strategy™ was designed specifically to address transformation challenges, including the points of failure described above.

The ISN Transformation Lifecycle replaces discrete initiatives in an organization, that often generate misalignment between strategy, implementation and execution, with an integrated whole. Lifecycle design and delivery of all components sustains purpose, aligns collective efforts, and focuses on achieving the intended outcomes of transformational change. The methods are tuned for complex, multi-stakeholder challenges, where diverse resources need to mobilize to create a desired future.

Integral Strategy delivers to an organization the ability to align actions, focus on outcomes, distribute accountability, track shared achievements, and prepare for the future. It will:

  • properly identify, evaluate and respond to issues of immense complexity;
  • articulate how a challenge or opportunity can be profitably mitigated or capitalized upon;
  • create shared purpose;
  • cost-effectively mobilize and focus resources; and
  • establish rigor in the transformative change process that manages budget, pace, and impact across an organization.

The Lifecycle helps organizations move quickly from opportunity to action to results in a rapidly-changing, fast-evolving business environment.

Integral Strategy™ has been used for transformative change in all sectors, including industry, government, non-government organizations, and advanced education. Initiatives have included digital transformation for a national railway, a smart utility, a smart city, and open government. The process has also been used to improve foundational technology and information management capabilities. Each of these initiatives required collaboration and collective action from diverse stakeholders.

Integral Strategy Network

Integral Strategy Network practitioners have first-hand experience in delivering complex transformative change initiatives. CEO Eric Lott led a collaborative initiative between Canada and the United States to reuse hydrographic data in digital charts based on different standards, eliminating cartographic rework and enhancing the ability to share information among nations. He also led a Canadian initiative for six government departments to share information for enhanced Maritime Intelligence and security. Founder David Forrest helped to design the market system for electricity trading in Alberta, and worked with a large electric utility to capture new business opportunities from deregulation.

ISN associates have enabled transformation in similar ways. Don Anderson coordinated a national project to bring Canadian credit unions outside Quebec into the INTERAC banking network, creating a credit union gateway that was sponsored by the Credit Union Central of Canada. He is currently pursuing a similar model in the Canadian insurance industry that will support information sharing and business transactions between insurance brokers and insurance companies. Phil Degenstein helped to develop advanced workstation software and technology for Canadian Air Traffic Control, and designed and delivered systems using new technologies to improve government services to citizens. Michael Oas helped identify digital transformation opportunities to enhance road safety in Ontario, working with a cross-functional Business /IT team. Citizen-centred design methods were used to develop new business models leveraging technology systems and platforms. He has also helped businesses transform how services are delivered, based on cloud computing.

Several of these experts shared insights based on their transformation experience. Complacency is a big challenge, Don Anderson says. To move forward, organizations have to understand the compelling need for change. To be effective at digital transformation, Michael Oas says, organizations need to shift from a technology-centric to a user-centered approach. “The focus needs to be first and foremost on the user. That’s why companies like Uber, Airbnb and Netflix thrive, while other organizations are failing.”

Digital transformation, Eric Lott says, is about reinventing how an organization does business — so the business needs to change along with technology. The greatest pitfall, he says, is planning paralysis. “Be agile and strive for excellent outcomes. Start small, build quickly, learn and adapt.”

Integral Strategy Network works with organizations to help tackle their toughest, most enduring challenges.

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David Forrest

David is the founder of the Integral Strategy Network. He is a writer, futurist, strategist, and facilitator of systemic change.

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