Davos 2016 - no speed limit in pursuit of digital transformation

Profile picture for user slauchlan By Stuart Lauchlan January 20, 2016
Summary:
There's a digital need and that need is speed. But how should organizations judge just how fast to drive towards digital?
benioff
Marc Benioff

In the first part of this two-part look at the digital transformation panel session at the World Economic Forum in Davos, the direction of travel across all industries was firmly established as being towards a digital future.

The question that followed was just how quickly organizations can expect to get to that future?

For Salesforce CEO Marc Benioff, the answer is simple:

Speed is the new currency of business.

How we grew our business was speed. You just cannot go fast enough. If you’re not going fast enough, someone else is. That’s why we all have to be a little bit scared and we all have to go a little bit faster.

Pulling an iPhone from his pocket, Benioff declared:

The most dangerous place to make a decision is in the office. We all have these incredible devices. This makes everything go faster. This is what is making everything go faster, because communication is just happening faster and faster.

He recalled:

When I first came to World Economic Forum in 2002, we used to get our proprietary devices out and nothing worked. The network didn’t work. Something was deeply wrong. Now you come in and it just works. Everything is like lightning. The reality is that technology enables speedier execution. In that way, it’s a little bit that the medium is the message.

Benioff pointed to fellow panel member Jean-Pascal Tricoire, CEO of Schneider Electric, as an example of how to accelerate a company forward, through what he called:

relentless execution on a compelling vision.

In Schneider's case this meant defining a new relationship with its customers, explained Tricoire:

We were coming from a relationship which was projects and service on demand. You have a problem with your power quality, I come to help you. Now we are connected 24/7. That means that we can bring new values, new capabilities and a lot of new services.

We were operating as a federation of companies and customers were harshly complaining, 'We want one solution, we want one Schneider'.

For Kaiser Permanente CEO Bernard Tyson, there’s a need for speed of change that hasn’t been achieved yet:

I know that we’re not moving fast enough and I hold that to be the truth. We are increasing the BPMs - beats per minute - and we’re getting better at it. But we’re still not at the ideal pace. Our challenge is, I’m flying a plane today and I can’t just turn stuff off.

How do I balance what goes away because of all this technology and what in fact is still connected and must be connected to it?

The other thing is what should I not be doing and turning to a competent organization to do that on my behalf as part of the integrated strategy? That is a big piece of the work that we have going on that is aimed at moving faster.

But I don’t feel that we are moving fast enough.

It’s a familiar feeling among CEOs and one that should be embraced, argued Klaus Kleinfeld, CEO at metal manufacturer Alcoa:

The push cannot be strong enough. The only thing you have to judge as a CEO is when are you over-stretching the system. Then the cracks appear. But you have to try to move as fast as possible. If you see cracks, then you have to slow down, but pace is absolutely essential.

Make the pace

Failure to make that pace can cost dearly, advised HP Enterprise CEO Meg Whitman:

The future belongs to the fast. If you can’t get the organization to accelerate at dramatic speed the ability to develop the technology that will enable you to win, you are almost by definition falling behind.

You can always go faster than you think you can. When I came in to HP, it was in a challenging situation. I was the third CEO in three years. I was very worried about breaking the company. Would I be the one who’d run the car off the cliff?

We moved very fast, but we could have moved faster. Push the envelope. Push until you start to see a few things crack at the edge. I underestimated the organisation’s ability to move fast.

But speed needs to co-exist with direction and destination, added Kleinfeld:

Having a long term vision always wins. [Former Intel CEO ] Andy Grove’s saying, that only the paranoid survive, is probably more true today than it ever was.

Bernard Tyson
Bernard Tyson

But while that might seem to be taking the conversation down the inevitable road to the threat of ‘Uber-isation’, in fact one panelist at least welcomed new entrants to his sector as an enabler. Kaiser Permanente’s Tyson stated:

The innovative companies that are coming into the healthcare arena now, I regard as a breath of fresh air. They are forcing us to think very differently and see on the horizon what’s possible.

That’s led to innovations internally, such as the firm’s Care Anywhere strategy:

We’re challenging that whole notion that people have to come into the office for everything that they need. The digital platform has allowed us both to prove that theory and to enhance the value that our members see in Kaiser Permanente.

A case in point - we introduced e-visits. We started with the mobile phone and the computer so that you have the ability to have a secure office visit with your doctor directly. Last year we did 26 million e-visits. Members love it. On a scale of one to ten, it’s something like 9.something satisfaction. It’s additional access into the organization. You never have to leave your home, never have to leave your office, never have to leave wherever you are, for something that could be taken care of with a virtual visit.

To that end, digital is an enabler to enhance the organisation’s capabilities, concluded Tyson:

It has created incredible possibilities as well as incredible fears and challenges.

Tying the need for speed with the need for a new set of values, Salesforce’s Benioff summed up:

I think that we will be guided by a different set of values and the faster that we move on to those values the more successful we will be.

 

Disclosure - at time of writing, Salesforce is a premier partner of diginomica.