Developing a strategy for the unknown is the most challenging issue facing the CEO today. Why? Because digital disruption is the number one paranoia haunting today’s management teams worldwide and nobody knows where disruption will hit next.

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Disruption comes not from the usual suspects, your peers and competitors, but from outside your industry which, let’s face it, means almost anywhere. A strategy for the unknown is a strategy for disruption. This is great news for everyone because disruption is no more than innovation in action.

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It is great for the consumer, especially since a major factor behind the current uncertainty is the incredible shift in power to the customer over the last five years. Some of the customer-centric issues facing every enterprise in every industry are:

• Communicating and interacting through multiple channels
• Customizing products and services to a market of one
• Involving customers in product design
• Coping with customers that can source globally and compare prices globally
• Providing add-on digital services
• Dealing with the immediate influence of market opinion from anywhere in the world, any time.

Power to the people indeed. It is great news for the enterprise too – the industrial internet (or Industrie 4.0) will have a much bigger impact on digitalizing the world than the social or consumer phase ever had. And the business opportunities will be correspondingly large. We are still in the early stages of the IoT, and the who, the what, the how and the why of the industrial internet are all wide-open issues.

The Industrial Internet

And, to make things even more exciting (and believe me this is an exciting time to be in the software industry), the solutions customers are building are changing the world on a daily basis. The technology portfolio driving this change is expanding too.

The knock-on effect? The industrial internet, the greatest integration program man has ever seen, provides the backbone for the amalgamation of big data. Big data itself provides the fuel for machine learning and artificial intelligence, the basis of the next generation of IoT applications.

This is why I say today’s CEO must form a strategy for the largely unknown,  a constantly evolving strategy that can be changed, modified or replaced at a moment’s notice.

For the enterprise, and for government services, this means having your IT and business departments use common tools, speaking a common language and co-developing new applications as rapidly as the market demands.

It means having the ability to identify market trends early, spot individual business or external events in real-time and having the flexibility and agility to change your business operations to the new situation as fast as needed. Information, analysis and the ability to respond are key to future success.

The speed of adapting to change is of the essence. The faster the enterprise moves the easier it is to turn a business challenge into a new business opportunity. Only the slow movers will view digitalization as a threat. To do nothing is not an option.

The enterprise transformation demanded by digitalization dwarfs any other factors impacting the global economy – from low oil and commodity prices to sub-zero interest rates – these constantly changing issues themselves constitute a part of the unknown, they could be out of date by the time you read this.

This article was written by Karl-Heinz Streibich, CEO and Chairman of the Management Board at Software AG.