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In this video, organizational theorist and management consultant Geoffrey Moore explains how the cascade works, starting with cloud computing and mobile computing, which allow free, one-to-one connections with virtually everyone on the planet. The next layer is social networking, which enables enterprises to enlist people to collaborate in their efforts.
When you look at the world of digital we see this cascading set of innovations. And I think the first thing to appreciate about it is how much they changed the productivity of modern business and modern life. So the cascade I’m thinking of starts with Cloud computing. If you think about Cloud computing, it’s basically making the deployment of software virtually free.
And if you put on top of that mobile computing, you now realize that for at least a billion people on this planet you can connect with them one-to-one in real time for free. And then if you put on top of that social networks, you realize you can enlist people to collaborate in your efforts, and people willingly do collaborate in your efforts, for free. And it keeps going.
As we look forward to data sciences, we look forward to Internet of Things, machines are not free – the scientists are not free, but the machines work virtually for free. And so we can globalize and digitize our operations through the data science, and even the physical world through the Internet of Things.
So you look at all that capability and you say, “Why now?” It’s because there’s this enormous amount of free capacity coming into our world and we have to take advantage of it. So when we think about, “Well, how would we do that?” The framework that we’ve been using says, “Look, you can take the digital infrastructure and you can use it at three different levels. You can use it just at your – at the infrastructure level to take cost out of your existing computer operations.” That’s a good thing. It’s a much more economical way to do your computing.
But I think most people are getting the returns at the next level up, which is at the operating model level. But what we’re doing is we’re not changing the business we’re in, but we’re changing the way we do that business. We’re making it more customer-centric. We’re making the user experience a much better experience. We’re making – taking cycle time out of things. All those things are what digital systems are able to do for companies to modernize their operating model.
And then some of the most aggressive companies are saying, “Look, with this new capability we should start with a clean sheet of paper.
We should design businesses from the ground up.” And so you are seeing companies like Uber and AirBnB and the next generation digital companies who are going, “There’s just a better way to run the whole thing top to bottom.”
I think for most of the companies that I deal with who have established lines of business, who’ve been in business for a decade or two or more, I think modernizing the operating model, taking your customer base forward into this next generation of capability but still maintaining your existing business model, that’s probably the recipe for success.