The Lie of Digital Transformation
I’m not going to mess around. If I hear one more person talk about a digital transformation strategy I think I might scream. But I digress. What do company executives really mean when they say that they want to move to a digital transformation strategy? I think that if you talk to 10 executives you will probably get 10 different answers. The answer to the question is a lot more complex than simply expecting your company to be the “uber” in your market.
So, let me get to my point. Digital transformation really means a forward-looking strategy. Many well-established companies whether we are talking about transportation, manufacturing, retail, or electronics have a difficult time changing. The answer isn’t that mysterious. How can you take your intellectual property, your customer base, and your established brand in the market and translate it into a new generation? It turns out to be more difficult than it looks. Think about the companies that come up first on the radar when discussing digital transformation. They are companies like Uber, Airbnb, and Amazon. They all have one factor in common: they came to the market with no legacy products and revenue tied to those products. They didn’t have to invest in physical inventory or complex infrastructure to support their customers and their business. This is both a strength and a weakness. There are hundreds maybe thousands of digital transformation companies that fail and fail hard. The ones that succeed do so because they have mastered the management of complex data.
Does that mean that traditional companies are lost in an era of digital transformation? Do these companies have to throw it all away and start from scratch? No. I maintain that to be successful traditional business leaders have to do two things. First, they need to take a hard look at what has made them successful in the past. What products and services do customers love? What is the underlying intellectual property that has taken the company this far? Who are the customers and what are they looking for next that they can’t get today? Second, businesses need to be willing to walk away from products or services that do not produce growth. Just because you have always offered a particular product doesn’t mean that it will sustain you into the future.
True transformation requires bravery and imagination to see beyond your traditional ways of doing business. It is not a quick answer to a complex problem. Transformation requires a roadmap that moves you forward in order to take your knowledge and codify it into data. Transformation means that you have to take risks that are often outside of your comfort zone. Don’t simply ask customers what changes they want to see in existing products. Help them to work with you and look beyond what exists to what is possible.
If you take the roadmap steps of moving forward with data and out of the box thinking then you can begin your journey towards transformation. Ironically, established companies with well-known brands, loyal customers, and an innovative set of ideas can leapfrog the competition if they follow the data. By following this path you will be prepared to future proof your business and become a disruptor and not a victim.