Open Organizations Vs Digital Disruption

A search for the website of your favourite hotel will find it buried deep below Booking.com, Trivago, etc. – digital disruptors that have captured the customer relationships, and a great portion of the profit margins, that once belonged to hotels.

This familiar example introduces an important new white paper from HEC Paris and Presans that throws light on the dynamics of digital disruption and highlights the characteristics of Open Organizations – organizations with the resilience to resist (or join) the disruptors and the purpose to succeed in the digital future.

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Download the HEC Paris/Presans White Paper here: Open Organization – The Way Forward with Digital Transformation

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Innovation is key to survival in the digital age. Yet many companies, particularly those with traditional hierarchical structures, struggle to innovate. The chain of command is too slow, internal resources are too limited, and they do not have the necessary agility or even the aspirational purpose.

Furthermore, innovating is becoming increasingly complex, due to three underlying trends that are revolutionizing the business environment:

TREND 1: The inflation and fragmentation of knowledge

TREND 2: Accelerating commoditization

TREND 3: Digital transformation

In this paper, the authors, Albert Meige, Jacques Knight and Nicolas Chanut, explain the forces at work behind these trends and show how by adopting open source principles companies can adapt to them.

The central message is that companies, to stay in the game let alone win it, need to adopt these five ‘specificities’:

1. User-centric and Functional – Putting the customer at the centre of strategy and selling function rather than product
2. Data-driven – Digitizing all layers of the organization to maximise performance
3. Platform Strategies – Implementing platform strategies that attack value chains to capture customer relationships and profits
4. On-demand talents – Developing the capacity to engage with on-demand talents internally and externally during a project
5. Aspirational purpose – Creating a culture that moves the whole ecosystem in the same direction.

Aspirational purpose is a key characteristic of Open Organizations and an essential one because, at a time when innovation and creativity are primary sources of growth, stakeholder motivation is crucial. Aspirational purpose helps cement commitment and maintain organizational momentum.

In the final section of the paper, the authors emphasise the practical application of their approach by examining four industrial companies/sectors – SpaceX; Tesla; Suunto vs. Garmin; the German automobile industry – through what they call the Open Organization Gauge.

The Open Organization Gauge is an analysis framework that provides an easy-to-use guide for any company to measure the maturity level of its digital transformation, and an accessible way to analyse how an industry leader has achieved competitive edge and draw inspiration. This theoretical framework also structures the training courses on digital transformation developed jointly with Presans and delivered by HEC Paris Executive Education.

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Join Albert Meige on HEC Paris’s Executive Certificate in Leading Digital Transformation

Dates: Module 1  23-28 June 2019, Module 2  6-11 October 2019

Format: In-class study │ Location: Paris

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