I often see news articles about augmented reality (AR), mixed reality (MR), and virtual reality (VR) in context of gaming, entertainment, and customer service. At Moonshot, we think of AR, MR, and VR collectively as immersive reality, and we believe immersive reality will realize its potential when it supports entire businesses across multiple industries, not just one department or one kind of company. We also believe organizations need to set themselves up properly for success with immersive reality – such as being highly aligned with strategy but loosely coupled in execution.

Kaleido Insights Report

I thought of the organizational implications of immersive reality as I read Kaleido Insights’ recently published impact analysis on AR, MR, and VR.

In the analysis, Kaleido analysts discuss the business and organizational impacts of AR, MR, and VR. In doing so, Kaleido cites applications of immersive reality in areas ranging from employee training to product development. As Kaleido points out:

As VR/AR/MR make their way into the corporate ecosystem, positive impacts and operational efficiencies abound. From sales and service; to HR, safety, and training; to engineering and product development, teams feel their wake and harness the power of informational overlay.

For instance, Caterpillar workers use AR to improve the efficiency and accuracy of equipment repair.  Retailers are using VR to create virtual dressing rooms for customers.

More and more examples from businesses are emerging. And Kaleido joins many other authorities such as Michael Porter and James Heppelmann, who have moved beyond the reporting phase and are counseling businesses on how to adopt immersive reality.

Increasingly, people who study immersive reality are adopting the broader view that Kaleido analysts Jaimy Szymanski, Jeremiah Owyang, Jessica Groopman, and Rebecca Lieb are taking. What really resonates for me about Kaleido’s perspective is how it examines the way immersive reality affects the core operations of a business. For example, Kaleido discusses the organizational structure and leadership issues that come with immersive reality:

VR/AR/MR pushes the internal departmental boundaries at organizations that are not equipped to rapidly innovate and harness the power of disruptive technologies. The lines will continue to blur between digital, marketing, IT, and innovation groups as a greater focus on CX and EX (employee experience) rises from new VR/AR/MR implementations. The rise of the “Innovation Center of Excellence” gives way to quicker VR/AR/MR initiative development when multiple business units are working in synchronicity. The first department to deploy VR/AR/MR will depend on its use case (e.g. if it’s consumer-focused, it will likely be marketing, whereas if it’s training focus it may sprout from a partnership between IT and HR).

Whenever I talk with clients about digitalization, the impact on people and processes typically sparks the most engaging conversations. Forward-thinking businesses are not stopping at mere experimentation at the departmental level. They’re looking at growth impact. And I believe fluid organizations are especially well positioned to succeed with emerging experiences and technologies such as immersive reality.

As noted in the following graphic, fluid organizations view transformation as an ongoing endeavor, requiring elements such as leaders willing to take risks and an ecosystem of developers/start-ups/media creators to help innovate ideas at scale.

Highly Aligned and Loosely Coupled

Moonshot characterizes fluid organizations as “highly aligned and loosely coupled.” Being highly aligned means, for example, that strategy and goals are clear, specific, and broadly understood. Being loosely coupled means, among other things, that the business is characterized by trust between groups on tactics without needing for a bureaucracy to previewing/approving everything.

High alignment ensures that embrace of an emergent experience such as immersive reality supports the company strategy. Being loosely coupled ensures speed and agility.

Highly aligned and loosely coupled companies are prepared to adapt to change and enact it in many ways beyond immersive reality. Netflix is one such organization, having transformed from content hosting to content creation. In fact, “highly aligned and loosely coupled” is one of the seven aspects of the Netflix culture, as discussed beginning on Page 85 of this presentation on SlideShare and illustrated here:

When you are highly aligned and loosely coupled, you have the potential to not only succeed but also define the direction of entire industries as Netflix has done, whether you’re applying immersive reality or any other emerging trend.

To succeed with immersive reality, highly aligned, loosely coupled businesses need to:

  • Connect immersive reality to the company’s broader growth goals
  • Understand that embracing this emerging experience requires high alignment in strategy yet a culture of empowerment to ensure agility
  • Employ a test-and-learn environment that encourages experimentation while minimalizing risk
  • Take the holistic view. Don’t sell yourself short by limiting your view of how immersive reality can improve all aspects of the company

Moonshot employs a methodology known as FUEL to help companies prepare for success with immersive reality by adopting test-and-learn approaches such as design thinking and lean innovation. We combine insight and executional expertise to partner with businesses to succeed.

Mike Edmonds

Mike Edmonds

Managing Director, VP Product