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offer inspiration as well as practical tools for leaders faced with technology acceleration, strategy challenges, and outdated business planning approaches.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.

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