Dual Transformation shows you how your company can come out of a market shift stronger and more profitable, because the threat of disruption is also the greatest opportunity a leadership team will ever face. Disruptive change opens a window of opportunity to create massive new markets. It is the moment when a market also-ran can become a market leader. It is the moment when business legacies are created.
Dual Transformation Framework: Repositioning the Core
The Deseret News went from providing commodity news to delivering unique content focused on faith and family. Adobe transitioned from selling software to selling subscriptions online. Netflix evolved from renting DVDs by mail to an online streaming service. And BYU-Idaho avoided the research path to become a student-centered and teaching-focused university. In every case, the transforming organization served the same customer and delivered the same basic value, but in a different way of creating and capturing the value.
The first part of dual transformation framework – repositioning the core – is all about the ‘how’.
- Zero in on the defensible post-disruption job to be done.
- Innovate your business model to deliver against the job.
- Determine and monitor new metrics.
- Implement aggressively.
Dual Transformation Framework: Creating the New
Singpost went from a basic mail delivery to a logistics and ecommerce solutions company. Deseret Digital transitioned from an online replica of printing solutions to a collection of communities and marketplaces. Amazon evolved from an online retailer to cloud-based IT solutions company. Arizona State University came to be an online juggernaut, from a campus educator. In every case, the transforming organization took advantage of underlying disruptive trends to solve a distinct problem in a relatable way.
The second part of dual transformation framework – creating the new – is all about three things:
- Identifying constrained markets.
- Iteratively developing the business model to serve those markets.
- Using partnerships, acquisitions and new hires to succeed in a new competitive set.
Dual Transformation Framework: The Capabilities Link between Core and New
By smartly blending the power of established assets and the energy of entrepreneurialism, you can flip innovators’ dilemma into opportunity. The third component of dual transformation framework – the capabilities link – is all about managing the tricky challenge of combining the first and second components together. Remember the three guiding principles:
- Stock selectively. Most of your core capabilities won’t help but could hurt.
- Manage strategically. Develop systems, create formal exchange teams and institute transfer pricing to ward off the innovator’s dilemma.
- Arbitrate actively. Actively arbitrate the interface between first and second, with a bias to protect the latter.
Leading Dual Transformation: The Courage to Choose
Remember the case of Reed Hastings at Netflix, Mark Lazarus at Turner Entertainment Network and Mark Bertolini at Aetna. Develop the courage to transform before the need becomes obvious. Keep your eye out for seven signs of disruptive changes:
- Decreases in customer loyalty
- Spikes in VC investment
- Policy changes
- Fringe entrants
- Changes in customer habits
- Formation of new business models
- Shift of financial focus from revenue growth to margin protection
In order to spot these signals successfully, you need to live in the periphery, pay attention to anything growing rapidly, plant yourself in the future and involve outsiders.
Leading Dual Transformation: The Clarity to Focus
John F. Kennedy demonstrated the clarity to focus by asking the Congress to support a mission to send a man to the moon. Leaders driving dual transformation need to bring clarity to critical strategic choices. Follow this three-step process to identify your moonshots:
- Identify your growth gap.
- Determine your growth goals and boundaries.
- Align on a handful of strategic opportunity areas.
Think simultaneously across the moonshot, lunar module, and Tuesday lunch time frames and be willing to say goodbye to legacy business models.
Leading Dual Transformation: The Curiosity to Explore
As Alan Kay once said, “The best way to predict the future is to invent it”, no matter how clear your focus, a successful digital transformation will require a curiosity to explore more than one paths. Follow Singtel’s journey of boosting curiosity quotient:
- Create safe spaces for exploration.
- Expose leadership to new stimuli.
- Incorporate curiosity in daily routines.
Leaders shouldn’t hesitate to find reverse mentors, learn new skills and deliberately get out of their seats to embrace the reality.
Leading Dual Transformation: The Conviction to Persevere
Dual transformation in the face of a disruptive change is the hardest challenge a leadership team will ever encounter. Twists and turns and fumbles and failures are inevitable. Leaders need to be prepared for three crises:
- Crises of commitment – repositioning the core needs to be reassured, and creating the new needs to be inspired.
- Crisis of conflict – leader needs to arbitrate between the core and the new, with a bias toward the new, and to deflect criticism from stakeholders.
- Crisis of identity – leader needs to share the essence of reason for and the results of transformation.