A few industrial leaders have always been at the forefront of innovation and set the trends for their respective industries, but banking and financial services are just going through their transformation journeys. They are all driving digital transformation throughout their enterprise with a relentless commitment to rethink every asset, process, and architecture of these enterprises. Digital transformation is widely talked about, with consultants lining up to show endless PowerPoint slides of the state of the digital revolution that they claim boardrooms cannot ignore. No industry is immune to the risk of being “Uberized” (an overused term), and companies need to become 100% digital at the core. There is no question about the external forces of change, such as disruptive technologies (blockchain, big data, AI, and VR, which are enabling the creation of new products and service offerings in existing markets and creating new ones); shifting behavior among core demographics (such as mobile first); and the war over talent. Companies have a lot of resets to manage, but what they really need to worry about are not the cool startups in most cases, but Amazon, Apple, Google, and a dozen other deep pockets that are actively planning to dominate future industries.
Before jumping into digital transformation, companies should revisit their innovation capability, which is the core driver of value (digital technologies are only enablers). Often I’ve seen companies jumping into blockchain or big data projects and talking excitedly about what these new things are, but completely without focus, value creation logic, or a user-centric context. They were caught up in these initiatives without thinking about what human capabilities are needed to run this as part of a larger strategic initiative that anchors on strategic foresight. In other words, the future has not been mapped but people are already building things.
So the next time your board talks about digital transformation, let’s start with human capital, strategic foresight, and a new logic of value creation. The difference between high-growth companies and their innovation laggards was not in money invested in R&D or digital technologies. It was the group’s assumptions about the future and how this shaped their strategy. The new logic of disruption is based on novel machine-human interactions and a human lens of seeing how new levels of productivity are being created and delivered by machine intelligence.
To understand the future of technological intelligence, we need to deconstruct human history. With that, we can place technology in the right perspective: by showing that humans co-evolve technology. That requires a deep understanding of humans and the dynamics of industry development. That’s what we do here.