Against a back­drop of tech­nol­o­gy, cus­tomer talks, and strat­e­gy ses­sions at the 2023 ASUG Best Prac­tices: SAP S/4HANA and Busi­ness Tech­nol­o­gy Plat­form Con­fer­ence, keynote speak­er Jack Shaw will call for rad­i­cal inno­va­tion and dynam­ic trans­for­ma­tion to sur­vive and thrive in business.

Shaw, who leads Break­through Busi­ness Tech­nolo­gies, will head­line the March 7 – 9 event and pledges to offer inspi­ra­tion as well as prac­ti­cal tools for lead­ers faced with tech­nol­o­gy accel­er­a­tion, strat­e­gy chal­lenges, and out­dat­ed busi­ness plan­ning approach­es. More infor­ma­tion about the event can be found here.

ASUG inter­viewed Shaw to tap into his per­spec­tives, gauge what he sees as con­stants and shifts for 2023 and beyond, and pre­view themes he plans to share with con­fer­ence atten­dees. This is an edit­ed ver­sion of the full conversation. 

Ques­tion: It’s good to speak with you about your upcom­ing con­fer­ence keynote. The first thing we want you to do is define ​‘rad­i­cal inno­va­tion’ since that is in the title of your talk.

Answer: Rad­i­cal inno­va­tion means com­plete­ly rethink­ing the way that busi­ness process­es, or a busi­ness mod­el, or pos­si­bly even an entire busi­ness ecosys­tem oper­ate; it means being will­ing to make dra­mat­ic, even dras­tic changes to how that works. One of my favorite analo­gies to make this point is that, 25 years ago, when the Inter­net was first emerg­ing, for­ward-look­ing busi­ness lead­ers quick­ly rec­og­nized that Inter­net tech­nol­o­gy could be used to more quick­ly and effec­tive­ly com­mu­ni­cate between man­u­fac­tur­ers or pro­duc­ers of prod­ucts, whole­salers, or dis­trib­u­tors of prod­ucts and the retail­ers of those prod­ucts. For exam­ple, you could have much more effi­cient man­age­ment of sup­ply chain and inven­to­ries, so you could free up cap­i­tal by reduc­ing the amount of inven­to­ry on hand, and bet­ter match that inven­to­ry to antic­i­pat­ed con­sumer demand to meet the needs of con­sumers. This hap­pened in a num­ber of industries. 

A num­ber of peo­ple said, ​“Let’s apply the same con­cept to the mak­ing and dis­tri­b­u­tion of CDs, to be more effi­cient.” And they could have done that. But the peo­ple at Nap­ster and Steve Jobs at Apple had a dif­fer­ent vision. Theirs was a vision of rad­i­cal inno­va­tion. They said, ​“Why do we need to dis­trib­ute CDs at all? Why not put the music online and let peo­ple stream the music and lis­ten to it direct­ly online with­out hav­ing to buy a phys­i­cal object?” That was an exam­ple of rad­i­cal inno­va­tion. Of course, we take it for grant­ed now. That’s how we lis­ten to music. But 20 – 25 years ago, that was a rad­i­cal inno­va­tion. It was a rethink­ing of the entire ecosys­tem around music pro­duc­tion and dis­tri­b­u­tion. It’s about rethink­ing how these things oper­ate completely.

Q: Is rad­i­cal inno­va­tion a cause for opti­mism and oppor­tu­ni­ty for busi­ness lead­ers, do you think?

A: Well, it’s an oppor­tu­ni­ty. But if you are on the dis­rupt­ed side of it, then it’s a threat. And I think part of the chal­lenge is we’ve got a lot of strate­gic threats address­ing busi­ness­es today.

Q: In 2023?

A: In 2023. We are all now, for the first time in a cen­tu­ry, aware of the poten­tial impact of a glob­al pan­dem­ic and how that can affect us, which is some­thing very few peo­ple had thought about pri­or to three years ago. We’ve also seen the dis­rup­tions in glob­al sup­ply chains, caused not just by impul­sive deci­sions by nation­al polit­i­cal lead­ers, but also by war, such as in Ukraine, across a num­ber of dif­fer­ent indus­tries. Cli­mate change is hav­ing a dis­rup­tive impact on many indus­tries. Then, also, tech­nol­o­gy itself is hav­ing an impact as com­pa­nies are rethink­ing the way they’re lever­ag­ing infor­ma­tion tech­nol­o­gy, imple­ment­ing rad­i­cal change that is dis­rupt­ing their com­peti­tors in those marketplaces.

Some­times com­pa­nies com­ing in from out­side of an indus­try are doing some­thing rad­i­cal­ly new and dif­fer­ent that’s dis­rupt­ing estab­lished indus­try lead­ers. We see some of that tak­ing place in finan­cial indus­tries and ser­vices, where the advent of cryp­tocur­ren­cies and blockchain-based finan­cial trans­ac­tions are caus­ing peo­ple to rad­i­cal­ly rethink how these finan­cial ser­vices can oper­ate. Estab­lished banks and oth­er finan­cial ser­vices insti­tu­tions have to respond to this dis­rup­tive strate­gic threat. 

Q: So, if rad­i­cal inno­va­tion is real­i­ty, what will you advise the audi­ence to lean into, to lever­age and cope with it? 

A: I’m going to advise them to think down the road. One of the chal­lenges is that in most busi­ness­es, strate­gic plan­ning hap­pens once a year in the fourth quar­ter and involves you get­ting togeth­er a few of the best minds in the orga­ni­za­tion. You spend a few hours a day for a week or two, and you review the finan­cial plan for next year. You see if it looks like it’s going to be what you’d like it to be. You make a few tweaks around the edges. You may adjust some staffing here or some invest­ment there. You make a few minor changes and you sprin­kle holy water on it and say, ​“We’ve updat­ed the strat­e­gy for the com­pa­ny.” And maybe you give a lit­tle bit of lip ser­vice to some longer-term trends that could come into effect, but ​“We’ll wor­ry about those next year.”

And what I’m going to be encour­ag­ing peo­ple to do is to think longer-term. From a prac­ti­cal per­spec­tive, with rare excep­tions in a hand­ful of indus­tries, it does­n’t make sense to try to look more than five or ten years down the road. Too many things are like­ly to change, but if you’re only look­ing out the next year or 18 months, the prob­lem is it’s very easy to say, ​“Well, we’d like to start deal­ing with that, but we don’t have the bud­get in place to do that. We don’t have the staffing. We don’t have the skillset and exper­tise that we need to make these kind of rad­i­cal inno­va­tions over the next 12 to 18 months. So we’ll just set it on the back burn­er and get around to it and look at it again next year when we’ll once again say the same thing.”

Instead, they need to be look­ing at where they are going to be three to five to even six or eight years down the road. What are the things that are going to be impact­ing their busi­ness­es? What are the rad­i­cal dis­rup­tions that may impact their busi­ness­es? Strate­gic dis­rup­tions of the types that I’ve men­tioned: how might those impact their busi­ness­es? It’s not sim­ply, ​“What do we need to do to pro­tect our cur­rent busi­ness mod­el and process­es from the impacts of these dis­rup­tions or poten­tial impacts of these dis­rup­tions?” What do we need to do to take advan­tage of it? How can we lever­age the way things are chang­ing? For­tu­nate­ly, the strate­gic impact of rapid­ly evolv­ing, emerg­ing infor­ma­tion tech­nolo­gies is not only a threat, but also a tool. It allows you to very much rethink the way that you do cer­tain things.

We’ve seen the impact of that in the way busi­ness­es oper­ate on the Inter­net. If we look back to where we were 25 years ago, with a hand­ful of excep­tions like FedEx and Ama­zon and the first cou­ple of banks that decid­ed to offer online inter­net bank­ing ser­vices, most com­pa­nies had lit­tle or noth­ing to do with the Inter­net in the mid- or even late ​’90s. But over the last 20 years, we’ve real­ized that you must be on the inter­net. And some com­pa­nies have done it very well and gained huge strate­gic advan­tage as a result. Oth­ers have been more defen­sive and haven’t gained strate­gic advan­tage, but at least have been able to main­tain a place in their respec­tive mar­kets or industries.

And we need to look at how we can lever­age emerg­ing tech­nolo­gies now, not just the Inter­net, but arti­fi­cial intel­li­gence, blockchain, Inter­net of Things, aug­ment­ed and vir­tu­al real­i­ty. Tech­nolo­gies evolved so rapid­ly that they enable a lot of things. So peo­ple need to think cre­ative­ly. Where would we like to be, three to five to even eight years down the road? 

Q: Will one of your key mes­sages to this audi­ence be to think cre­ative­ly and to plan per­haps aggres­sive­ly, optimistically?

A: They can and should do that. And one of the things I’m going to talk about is what’s called dynam­ic dig­i­tal trans­for­ma­tion. Dig­i­tal trans­for­ma­tion is the notion that we want to lever­age these rapid­ly emerg­ing dig­i­tal tech­nolo­gies to com­plete­ly trans­form the way we do busi­ness. We could trans­form what our under­ly­ing busi­ness mod­el is, maybe even par­tic­i­pate, along with cur­rent or poten­tial new part­ners, in rethink­ing our busi­ness ecosys­tem or ecosys­tems. If it’s a large enter­prise, they are like­ly to be in mul­ti­ple dif­fer­ent indus­tries and markets. 

The chal­lenge is: how do you put togeth­er a five-year plan when all of a sud­den some­thing comes out of the blue, like the COVID pan­dem­ic, or geopo­lit­i­cal dis­rup­tions? Some peo­ple say that you can’t real­ly do strate­gic plan­ning any­more. All you can do is look down the road 30 to 60 days and make the best plan you can in the short term and hope for the best. At least that’s what some peo­ple think. But you don’t need to think this way.

With dynam­ic dig­i­tal trans­for­ma­tion you do what’s called, and this is the aca­d­e­m­ic term for it, ​“par­tial order, least com­mit­ment plan­ning.” What it says is that you have a long-term plan and you have a whole series of steps for how you’re going to get to that point, look­ing out, say three to five or more years. To accom­plish a long-term plan, you’ll have to estab­lish a num­ber of goals. You have to have achieved a num­ber of goals and objec­tives to be say­ing, we are effi­cient­ly exe­cut­ing our long-term strat­e­gy, our long-term plan. To accom­plish each of those goals, you’re going to have to acquire resources of var­i­ous types, skills and assets of var­i­ous types, peo­ple and so forth. So how are you going to acquire those resources that you need to achieve those goals? You have to have plans for doing that; let’s call them sub-plans. In order to exe­cute those sub-plans, you will have to have achieved some sub-goals. And to achieve those sub-goals, you’ll have to have exe­cut­ed some sub-sub-plans. 

It sounds very con­fus­ing ver­bal­ly, but one of the things I’ll share is some­thing called a plan goal graph. And this is a method that can be used where you can decom­pose your long-term strat­e­gy into a series of sub- and sub-sub-goals and plans. And in a large enter­prise, you may take this five or 10 lay­ers deep; but, by the time you get down to the bot­tom, you’re at spe­cif­ic actions and deci­sions that you can make right now, that you can exe­cute today and that give you flex­i­bil­i­ty so that, if you get six months or three years down the road and sud­den­ly some­thing has changed with­in your orga­ni­za­tion or in the exter­nal envi­ron­ment or you’ve been impact­ed by some strate­gic dis­rup­tion, you can still accom­plish that long-term goal.

Q: Is there more of an urgent need for that dynamism and that adapt­abil­i­ty and that flex­i­bil­i­ty in busi­ness than ever before?

A: Absolute­ly, because change is com­ing at us so fast. Change in terms of oppor­tu­ni­ties to rethink busi­ness mod­els and busi­ness process­es and the rapid evo­lu­tion of tech­nolo­gies to enable us to imple­ment that rad­i­cal inno­va­tion. And change in terms of the impact of strate­gic dis­rup­tions. And so it’s more impor­tant than ever to be able to do it. And one of the most crit­i­cal com­po­nents is mon­i­tor­ing the envi­ron­ment. You have to con­tin­u­ous­ly mon­i­tor the land­scape for both oppor­tu­ni­ties and threats so that you’re con­tin­u­ous­ly updat­ing. This, in turn, means strate­gic plan­ning can­not be a once-a-year project; it has to be an ongo­ing process. 

Q: Please syn­the­size your three key take­aways that will be most essen­tial for the audi­ence to recall and to use.

A: One is that busi­ness­es of all types, includ­ing not for-prof­it busi­ness­es, health­care, gov­ern­ment, and oth­er pub­lic sec­tor as well as pri­vate sec­tor, are being more rapid­ly and more severe­ly impact­ed by poten­tial strate­gic dis­rup­tions than ever before.

The solu­tion to deal­ing with these strate­gic dis­rup­tions is not to back up and say, ​“We can only do short-term plan­ning and react.” It’s to be proac­tive and do long-term plan­ning. Look down the road for where you would like to be. Do it in a way that gives you the flex­i­bil­i­ty to adjust your plans and goals and still accom­plish your long-term strate­gic objec­tives. Have mul­ti­ple paths for how you could exe­cute your long-term strategy. 

And the rapid evo­lu­tion of tech­nolo­gies is enabling us to imple­ment rad­i­cal inno­va­tions in broad­er and more effec­tive ways than we’ve ever done before. Strate­gic plan­ning has to be an ongo­ing process in every orga­ni­za­tion. It’s just as impor­tant for it to be ongo­ing as it is for you to have human resources man­age­ment or finan­cial man­age­ment. Every­body real­izes we need to do these on a full-time basis.

Q: They don’t start and stop, they’re ongoing.

A: We don’t say we’re going to do human resources once a year or we’re going to do finan­cial account­ing once a year. It’s a con­tin­u­ous process. Strate­gic plan­ning needs to be the same way.