Is Your Business Too Stable to Grow in the Digital Age?

Forty years ago the Air Force had a problem. They needed a next generation fighter jet – one that would push the boundaries of maneuverability. A group of General Dynamics engineers understood that the same characteristics that make an aircraft stable also reduce its ability to turn and maneuver, which led to a radical idea – make the plane slightly aerodynamically unstable.

The technology, called ‘relaxed static stability’, was first deployed in the F-16. To counter the inherent instability of the design, on-board computers assist the pilot by managing the plane’s control surfaces. The end result is an aircraft that can maintain steady flight, but can also perform maneuvers that are the aerial equivalent of turning on a dime or break-dancing in mid-air.

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So what does this have to do with growing your business?

The average CEO expects the percentage of revenue from digital products to double over the next five years[1]. You’re probably in the middle of one or more digital initiatives right now, looking for ways to increase ‘digital’ revenue and profitability. Gartner predicts that 70% of those initiatives won’t reach their objectives[2].

Why? For many, it will be because their business processes are too stable.

“By 2017, 70% of successful digital business models will rely on deliberately unstable processes designed to shift as customers’ needs shift.”[3] That’s one of Gartner’s Top 10 Strategic Predictions for 2015 and Beyond (full report here). Admittedly, the idea of ‘deliberately unstable processes’ and why that’s a good thing might be a little tough to get your head around. The word ‘unstable’ brings up images of things that are either crazy or about to fall over. You need to re-think that definition.

Stable processes are static. They’re straight line, and difficult to adapt to change. Going back to the aircraft analogy, a Boeing 747 is designed to fly in a straight line at level altitude. If you’ve flown in one, you know it changes directions slowly. The F-16, on the other hand, isn’t designed to fly in a straight line. It’s designed to change directions really fast – to be ‘super-maneuverable’. ‘Deliberately unstable’ processes are specifically designed to adapt to change, without falling over.

Why is this imperative? Because digital business is built on customer interactions and customer interactions are inherently unpredictable. To respond to unpredictable change you need to be a little unstable. You need maneuverability.

We’ve already adopted this concept in the data center with cloud technology – where self-managing computing services can redeploy resources almost instantaneously in response to shifting demand. You need to bring this same kind of thinking to the ‘business’ side of the house.

That means your people need more autonomy to make decisions and delight customers in a changing competitive environment. Business processes like selling, monetization and revenue recognition need to become more flexible to scale and support new service delivery and fulfillment models. Management needs to leverage technology as an enabler of this change.

The F-16 is 40 years old and still flying. That’s a result of an exceptional design that placed maneuverability ahead of stability. It probably would have been easier to design a more stable aircraft, but the results wouldn’t have been the same. You’re now facing the same decision as those General Dynamics engineers. To succeed, you might need to be a little unstable.

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[1] CEO Concerns 2015: Committing to Digital, Gartner, 7 March 2015 http://www.gartner.com/webinar/3028417/player?commId=153395&channelId=5500&srcId=null

[2] Gartner Says Digital Business Requires Organizations to Rethink How They Respond to Change, Gartner, 1 Jan 2015, http://www.gartner.com/newsroom/id/2968317

[3] Gartner Research Note G00269904 Top Top 10 Strategic Predictions for 2015 and Beyond: Digital Business Is Driving ‘Big Change’, Daryl C. Plummer et. Al., 4 October 2014 https://www.gartner.com/doc/2864817?srcId=1-3132930041

About the Author

Bob Harden
With expertise in recurring revenue strategies and implementations, former Director of Billing Solutions at Experian, Bob Harden is now founder and principal of The Harden Group. Contact bob.harden@ymail.com or visit www.hardengroup.net.

The Forrester Wave: Subscription Billing Platforms, Q4 2015

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