Digital Disruption

Research conducted by EFQM amongst the C-Suite community highlighted digital disruption as the number one factor keeping them awake at night.

In recent months, EFQM has been undertaking research to ensure that, when released, the next version of its globally recognised Model addresses the major factors that an organisation will need to confront and manage in the coming years. Regardless of whether the organisation is private, public, large or small, these are the factors that need to be taken into account to flourish rather than stagnate or disappear entirely.

As a key ingredient in this process, we have conducted over 60 interviews with C-Suite professionals working across 13 countries to better understand the core concerns of the C-Suite in Europe and the UAE. Interviewees were asked to provide commentary on the various factors which keep them awake at night, as well as their experiences in tackling these issues.

Findings included insight from multiple industry verticals, including voices from within: High Value Manufacturing (HVM), FMCG, R&D, ICT, eCommerce, pharmaceutical and healthcare, banking and financial services, academic institutions, and the various areas of the public sector. This was done to establish cross-sectoral understanding and develop additional facets to the next version of the Model.

73% of C-Suite respondents outlined digital disruption as one of the predominant factors keeping them awake at night. Respondents associated the current pace of technological innovation and disruption with a surge in emerging competition, changing societal behaviours, and barriers to progress. These barriers are often caused by differing levels of technological innovation across different product and service areas, especially in cases where integration between these different elements is essential for an end-to-end service. Other related areas of concern pertain to the proper acquisition and management of intelligent data sets so as best to support the adoption of AI, machine learning and autonomous systems technology.

C-Suite representatives from the ICT sector outlined growing struggles to maintain market position within the private sector. Regarded as “a threat but also an opportunity”, disruptive technologies typically provide less capital-intensive tools for commercial growth in the same breath as a gross reduction in associated barriers to entry. As a respondent from within the ICT services sector claimed: “Historically, for many industry sectors there was a cost of entry to the market. With technology development as it nowadays, the cost of entry to any market has significantly reduced. It is approximately 1/10th of what it was 10 years ago.”

Concerns echoed amongst mechanical and electrical systems manufacturers also correlate to an overwhelming degree of anxiety caused by the sheer pace of technological innovation, as well as its effects on increased market competition. A spokesperson within the mechanical solution manufacturing business claimed: “Digitalisation, sustainability and partner management are the main challenges ahead of us. The speed of change is something which keeps us very much alert and concerned.”

Such rapid change has contributed to a situation whereby disruptive technologies have been known to cause, “Enormous changes in markets, where some will completely disappear while others will suddenly emerge,” added representatives from the electronics manufacturing supply chain. Together, these two factors work to create a situation of anxiety around the uncertain effects of digital technologies, yet a growing sense of urgency around the need to maximise upon them. This urgency is somewhat catalysed by the increased fears of start-ups and emerging competitors using such technology to rapidly establish a foothold in the market.

Other reasons for restlessness amongst the C-Suite go even further than uncertainty around change, but also establishing proper application and how technologies can be melded towards specific business processes. Education and public sector respondents discussed issues caused by a lack of understanding in how emerging technology based on machine learning and intelligent data can be applied to their business model. In particular, respondents typically voiced a desire for greater automation, but pointed towards perceived gaps in integration with other technologies, systems, and current business processes as things holding them back.

A participant from the higher education sector explained: “What keeps me awake at night? Digital disruption is the biggest factor, the pace of technological change. It is a threat but also an opportunity. We need to reflect on the benefits and it’s a pervasive theme. How can I leverage in AI, Machine Learning? How can I automate and how can I use the data I have? But I also have to invest in technology and keep pace. It’s a lead shaper.”

This notion was further enhanced via respondents from within public healthcare, with one such participant explaining: “There is something missing in the way that we think about digitalisation or automation of services or the use of technology. The whole value chain – partners included – is an important consideration in their improvement approach moving forward. But also, effectively managing the lag between the new and the norm (user behaviours) when it comes to implementing technology solutions.”

How Does the Next Version of the EFQM Model Tackle Disruptive Technologies?

Achieving proper integration requires the holistic view of an organisation which is almost unique to members of the C-Suite, but it also demands a deep understanding of all the operational systems, processes, skills, and people within the business. It requires the ability to step back and take a broad view of all the interconnecting systems and apply the correct technological skills, understanding, and intelligence to decide upon how this can best be utilised. What’s more, correct leadership is also essential to ensure a direct path can be taken towards a clear outcome when multiple parties may or may not be involved. This increasingly becomes a balancing act for members of the C-Suite and an immeasurable drain on time that can be invested into mission-critical roles and areas of added value.  And it is here that the next version of the EFQM Model can provide the necessary support to C-Suite to help make sense of it all.

The current state of the market is one where fluidity in business model is all but required for continued success. Disruptive changes in technology only remain disruptive to the business which lacks the agility to respond fluidly and efficiently. To achieve this, a new way of working is required: a way of working whereby the evolution of both service and operations are undertaken on a month-by-month or seasonal basis. But achieving this state of agility requires not only an overhaul in how organisations monitor, discuss, and respond to technological changes within the marketplace, but also in organisations’ ability to properly identify relevant challenges or opportunities being presented.

As mentioned at the start of this article, the research undertaken by EFQM (including the outcomes of these 60+ C-Suite interviews) is being used to inform the final content of the next iteration of the EFQM Model. What we can say at this moment in time is that the Model recognises that no organisation is linear, mechanical, and predictable. Instead it is far better understood as a complex adaptive system that is made up of interdependent humans in a dynamic living world. The Model recognises that no single perfect solution can be assured, but it facilitates intelligent decision-making based on actionable insights, all underpinned by a responsive organisational structure and change-positive business culture. Further information will be available at the official launch of the new Model at the 2019 EFQM Forum in Helsinki on October 23rd and 24th.

www.efqmforum.org

About the author
Ciaran Jarosz is an experienced trade and business editor with experience spanning a wide range of industry verticals and international markets. He has spearheaded respected trade journals within the construction, manufacturing, transportation, hospitality, and property fields, as well as having worked with some of Europe’s foremost innovators in business technology to disseminate specialist industry expertise.

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