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As the business world continues to recover from the ravages of the recent recession, many experts now warn that we are far from returning to a business-as-usual scenario. Whether it is Rita Gunther McGrath of Columbia Business School telling us that we have entered a new “transient advantage” era, Joseph Badaracco of Harvard calling it a new “Schumpeterian” recombinant economy or Scott Anthony of Innosight (Clayton Christensen’s consultancy arm) terming it the “great disruption,” few expect the old assumptions and formulas that brought success in the past to continue to be effective in the coming decades.

Richard Dobbs, James Manyika and Jonathan Woetzel of McKinsey have just published a new book called No Ordinary Disruption (New York: Public Affairs, 2015) in which they have identified “the four global forces breaking all the trends.” The four are (1) the shifting locus of economic activity and dynamism to emerging markets like China and India, and, more particularly, to about 400-500 cities within those markets, in what they call a “new age of urbanization”; (2) the acceleration in the scope, scale, and economic impact of technology, where the effects of ongoing, rapid advances in processing power and connectivity are being amplified by the big data revolution, the mobile Internet and the “proliferation of new technology-enabled business models;” (3) global demographics and the aging of the human population, where more than 60% of the world’s people already live in countries with fertility rates that have fallen below replacement rates; and (4) ever-increasing global economic interconnectedness and the  expansion in the flows of capital, people and information associated with it, where “south-south” flows between emerging markets have doubled their share of global trade over the last ten years. Taken together, these four shifts are producing “monumental change.”

To take just three examples of how rapidly and radically the world as we have known it up to recently is being transformed, in December 2014 “Cyber Monday” generated $2.65B in online shopping, but just a few weeks earlier on November 11th, China’s “Singles Day,” Alibaba recorded the world’s highest ever single day e-commerce trading total of $9.3B; earlier, in February 2014, Facebook acquired a 5-year old start-up for an amazing $19.3B, and in September 2014, the Indian Space Research Organization successfully put a spacecraft into orbit around Mars, and for a total cost of only $74M, less than it took to produce the award-winning film, Gravity.

The big implication from No Ordinary Disruption is that all CEOs and corporate strategists will have to learn to “reset” the intuitions that up to now have been guiding their perceptions about future opportunities and challenges. “We have to rethink the assumptions that drive our decisions on such crucial issues as consumption, resources, labour, capital and competition.” According to the McKinsey authors, the era we have already entered is full of promise, but also more volatile and “deeply unsettling,” and for business leaders, the intellectual integrity to be willing and able to see the world as it really is, and the humility and persistence to keep learning, have never been more needed. The recent past is no longer a reliable guide to even the next 5 to 10 years, and imagination, not just experience, is now at a premium.

Professor Brian Leavy is a Professor of Strategic Management at DCU Business School and teaches strategy on the Executive MBA programme. Prior to his academic career, he spent eight years as a manufacturing engineer with Digital Equipment Corporation, now part of Hewlett Packard. Brian’s teaching and research interests centre on strategic leadership, competitive analysis and strategy innovation, and he has published over 80 articles, chapters and book reviews on these topics, nationally and internationally. 

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Recent research conducted at MIT and Harvard University found that organisations with successful digital strategies were 26% more profitable than their industry competitors and generated 9% higher revenue from their employees and physical assets’ (Westermann et al, 2014).  In an age of disruptive technologies, constant global and organizational change, and the fast-paced erosion of competitive advantage, the implementation of a successful digital strategy promises enormous returns on investment for management.  McKinsey estimates that digital technologies have the potential to unlock between $900 billion-$1.3 trillion in value for work organizations (Bughin et al, 2012).

Digital strategies refer to the deployment of information technology (IT) systems, which combine social media tools, e.g. Facebook and Yammar, mobile computer applications, e.g. smartphones and tablets, and virtual data analytics, e.g. cloud computing, to leverage organizational value.  Successful digital strategies are allowing organisations to transform their entire customer experience, exploit greater value from organizational operations, and create new business models that reorder value chains and offer sustained competitive advantage.

Yet, despite such promises we know very little about successful digital strategy implementation, the key challenges organizations are confronted with in introducing digital technologies or the choices management must make to align customer and organizational needs with digital capabilities in order to maximize return on investment.  Considering the potential yields for ROI cited above, it is important that organizational leaders can embrace the opportunities inherent in a digital era whilst avoiding the pitfalls that can be disguised in such opportunities.

In order to answer some of these questions and further explore digital opportunities for Irish companies, last November the DCU Executive MBA programme, as part of the Enterprise Engagement module, visited digital companies in the San Francisco bay area.  Throughout the week our MBAs met with digital leaders from innovative companies such as RocketSpace, OnlyCoin, Cloudflare, and WePay and from more established technology-based companies such as Oracle, Salesforce, and Google.

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A key learning across all visits was the importance for organizations to rethink how their strategies can be leveraged to yield digital advantage.  Digital leaders need to move beyond the pursuit of a sustainable competitive advantage and recognize the transformative and ubiquitous nature of digital in restructuring organizational boundaries and hierarchies, recreating entirely new business processes, and creating a porous synergy between all organizational and societal stakeholders in order to support new value propositions and the development of a more transient approach to strategic advantage.

John Loonam is a Lecturer in Management on the Executive MBA Programme at DCU Business School.  He is currently a Special Issue Senior Editor on “Enterprise Social Systems & Organizational Change” with the Journal of Information Technology.

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The Association of MBAs (AMBA) accredited DCU Executive MBA is built on 4 foundational pillars, one of which is “transforming organisations”. Today’s organisations must grow markets and add business value while coping with constant external change and internal complexity.

In addition to this, the leaders of tomorrow need the skills, insights and cross-cultural exposure to be successful in the global and connected world that organisations operate in today.

In the age of global economic uncertainty, Silicon Valley is the engine of growth for the US economy, building revolutionary platforms for interconnected communities, instantly accessible knowledge and frictionless commerce. In many ways just like the Florentines and Venetians built Italy’s renaissance, the entrepreneurs and business of the Valley are building a new age.

It was for this reason that our current Executive MBA students jetted off to California as part of their International Study Week!

Students had the opportunity to visit a range of start-ups, cloud companies and incubators as well as the leading global technology companies. Some of these companies included Google, Salesforce and Oracle and WePay.

This key to this tour was to enable students to immerse themselves in the energy, culture and working ethos of San Francisco and Silicon Valley and learn how entrepreneurs, heedless of boundaries and possessed of youthful enthusiasm generate new ideas, assemble great teams, start up new ventures and create successful innovative companies.

We are looking forward to seeing how this invaluable exposure will be applied by our MBA students in their organisations and MBA projects over the coming months!

Find out more about the DCU Executive MBA Programme, currently accepting applications for September 2015.