It's definitely too late for your digital transformation
Editor's note: The following is a guest article from Ben Lamm, founder, chairman and CEO of Hypergiant Industries, and founder of Conversable, Chaotic Moon Studios and Team Chaos.
Earlier this year, a study commissioned by Dell EMC and Intel revealed that only 6% of companies have "fully transformed" as a result of their digital transformation efforts. According to the research conducted by ESG group, most companies were still emerging (45%) or evolving (43%) in their transformation efforts.
While some industry watchers were stunned to learn most companies weren't further along on digital transformation, I think these numbers make perfect sense.
The 88% of companies hanging out in the middle of their digital transformation journey are officially dead. Let's call them the "Analog 88." May they rest in peace. The 6% that haven't even started planning a transformation were dead a long, long time ago. And the 6% that have completed the transformation are now the market winners.
You might think it's crazy to suggest that 6% of companies can inherit all markets, but that's exactly what's happening. Look around. In 2017, 30 companies made half the total profits earned by all US companies.
Harvard Business Review raised the warning flag about the lack of competition in the U.S. economy earlier this year. Even Goldman Sachs has published research lamenting how large, dominant players are taking unprecedented control of markets and potentially choking off growth.
We are living in the "winner takes all" era of American business. The business landscape has never been better for leaders seeking to extend their lead and entrench themselves in long-term positions of power. That's why the Analog 88 are dead.
How are they going to compete with the most advanced 6% of businesses at a time when there are baked-in, structural advantages for leaders? Who do they think they're going to outsmart when they can't even figure out how to host an application in the cloud?
Perhaps most importantly, how are they going to compete with the advanced 6% when those companies are already embarking on the next great transformation? We need to admit to ourselves that the age of digital transformation is over, and the intelligence transformation has begun.
The impacts of the intelligence transformation
What digital did for consolidation, AI will do for competition, and every incumbent leader or young upstart will need to embrace intelligence technologies early in order to remain relevant.
A PwC study recently revealed that 54% of business executives are claiming they have implemented AI solutions that are already increasing productivity. And the annual eConsultancy/Adobe Digital Trends study highlighted that top-performing companies are two times more likely to use AI in their marketing.
This transformation is already underway, and it's happening faster than the original digital wave.
These data tell us industry has almost reached the end of the beginning. We're counting months, not years, until tomorrow's market winners will be in the thick of a massive intelligence transformation. It's critical that every executive leader abandon "digital transformation" efforts and pour their resources into machine intelligence.
Notably, the lesson industry should learn from the Analog 88 is not that we should embrace technology trends sooner. It's that businesses should build organizational capacity for emerging technologies sooner.
The companies that failed at digital transformation didn't have an IT problem — they had a people problem and a culture problem. In my experience working with Fortune 500 brands, the technology itself rarely causes the IT failure. The humans, on the other hand, make countless mistakes, predictable and unpredictable. Sometimes they actively resist the change, which can sabotage adoption in a hurry.
Ultimately, the intelligence transformation is no different than any other change management project that comes across an executive's desk. Prepare your people for change, support them as they grapple with the challenges of near-constant technological disruption, and provide the resources they need to successfully work with machine intelligence in the future.
These are core competencies of any well-functioning leadership team. That should be comforting news for top-performing companies, because the best way to succeed with machine intelligence is to first succeed with human intelligence.