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Standing with our feet in the wet sand, we know what it’s like to feel the waves embrace our ankles and then retreat, taking the sand from under us. We know how it feels to sense the joy of the water and the pull of the ocean and how safe we feel on the edge looking out. But it’s a whole different story once you are in chest deep.

Another wave comes through, taking us out deeper. Where we can’t. Quite. Touch.

Those who have been taught to swim, kick up their feet and push towards the shore. Those who become afraid, uncertain tread water. Treading water is a great way to keep your head above water, but it doesn’t get you to safety. It just prevents you from going under.

When it comes to innovation, “treading water” is an apt description for many Australian corporations. They’re spending a vast amount of effort just to stay in the same spot. And this observation was reinforced by CSIRO Chair, David Thodey’s recent addresses to the AIIA and Knowledge Nation conferences. Turning his gaze to an audience filled with corporate leaders, he asked:

The critical question I would ask is whether Australian corporates are seizing on the opportunities of digital transformation as rapidly as we need to – are our aspirations BOLD enough – and are we really thinking globally.

Digital transformation is not simply about technology. In fact, it is not simple at all. Many years ago, I was lucky enough to work with David Thodey as part of a transformation effort at IBM. We were creating new processes, procedures and capabilities. We were also driving new types of business culture – and it was my role to showcase the best and brightest talent within IBM and Telstra, and use this to inspire new business practices. It took us 2-3 years to bring consistency and clarity to the 5000 strong team, but we proved it could be done with the right incentives, structures, processes, communications and leadership. We had a plan and it was followed.  A similar model is outlined in our  Digital Transformation and Social Business Maturity Model.

Linking digital transformation and innovation

So why is there a focus on digital transformation when it comes to innovation? Quite simply, digital transformation is the fastest route to test and iterate your business models. Those organisations who have not invested in transformation will find that their business models will begin to whither. It’s not that ALL BUSINESS is digital. It’s that all business is DIGITALLY TRANSFORMED. All our customer, business and employee data is digital. Our processes are supported by technology. And even the way that we think about our business is driven by process flows that are, themselves, digital – from timesheets to payments, customer acquisition to payroll.

But digital transformation in this day and age is just like treading water.

It’s not enough to stay where you are – for the sharks are circling and they move more freely below the surface than you do above.

So what can you do?

David Thodey outlines the steps that Australian businesses need to take to leverage the changes that are taking place in our world:

  • Digital mindset: We need to shift from thinking about digital strategies, to embrace a “digital mindset”. This means an always-on, data ready, agile and responsive organisation. It means turning strategy into action and action into strategy.
  • Reinvent your business with the customer at the centre: It’s what I have called in the past, the “new consumerverse”. We are living in a consumer world and we need to build our businesses around the experience that will transform our customer relationships.
  • Invest in innovation: This means processes, products, technology, dedicated teams and behaviours. It also means training, process improvement and trial and error.
  • Change the culture: We must build on the strength of our businesses – but build them towards a future. We cannot simply tread water and expect to thrive. To do this we need to boldly challenge our own models and histories.
  • Capability, organisational design and leadership: All this must change and adapt. We need to rethink success models and the way that we deliver capability, how we build our organisations from the inside out, and even what it means to lead in a digital world.

Read the transcript of David Thodey’s speech here.