By Gideon Malherbe, Founder, Virtual Consulting
Scenarios reveal and exhibit a company’s best set of options to maximize value through both opportunity scanning with multiple futures and risk mitigation exercises. Scenarios are built using trends and events, both predictable and unpredictable. Statistics help improve our understanding of the predictable trends (like population growth) and Scenario Planning help us develop perspectives about the unpredictable events. We are also currently in the midst of one of those mega trends that is shaping the future of business. We call this trend “digital intensity” and we measure an enterprise’s relative position with our Digital Intensity Assessment.
Digital Intensity refers to the degree of an company’s migration from an analog, manually operating company to a fully autonomous operating environment. From a man-and-his-shovel shop to a fully autonomous loader (Caterpillar) or from a salesman-and-order-book to a fully automomous on-line insurance sales organization (Geico). What makes Digital Intensity the most critical strategic option today is that it directly reduces economic friction through dis-intermediating commercial agencies, and it reduces work process cycle times through algorithms and collaboration. Thus, we believe a direct correlation exists between a company’s performance and its relative Digital Intensity maturity.
By knowing the Digital Intensity of the various units within a company as one set of inputs, and the sector’s Scenarios on the other, management can determine a strategic roadmap for transforming the company from its current position to a digitally enabled operation, without relying on single point solutions. Single point solutions usually end up causing as much disorder as they attempt to solve by displacing the “friction” from one unit to another unit.
Our Digital Intensity Assessment looks for strategic alignment with digital transformation, deployed resources towards the effort and an agile culture. Not everyone can be pure play disrupters like Uber, nor ecosystem shapers like Rio Tinto, but all should be going digital!
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