Recently IESE organized a webinar on digital transformation and fostering the digital mindset. I had the opportunity to join Professor Evgeny Kaganer as a guest speaker on this topic which both of us agree emphatically that no business can afford to ignore.
So how does digital get on the agenda of a business? What are the key drivers of digital transformation? While details will naturally differ across companies and industries, the key drivers that we can observe today in industries that are actively being disrupted, are applicable to all of us.
Customers have changed
The first and I think the most important one of all is the reality that customers have changed. The ubiquity and adoption rate of digital, mobile and social platforms mean consumers are used to a kind of connected, seamless digital experience in their lives. Eg. when they shop on Amazon, book an Uber taxi or listen to their music collection on Spotify. Once new consumer norms set in in one area of their lives, their expectations naturally start to extend to other areas of their personal and professional lives.
If they can easily shop via mobile phone on so many ecommerce sites and access their order history, why can’t they get a comparable transactional experience with mobile banking?
The customer journey has changed. For some industries, online touchpoints are interjecting into a previously mostly offline engagement. For some others, the customer journey is now fragmented across multiple channels, devices and sessions. The best in class across industries show consumers that a better experience is possible. These companies then set the bar for the rest of us when we want to engage with those very same consumers.
Any company that wish to continue to be successful need to understand the new customer journey and figure out what they need to do to stay relevant.
Senior Leaders Buy It
Senior leaders do not need to be digital natives but they need to understand the potential disruptive power of digital, as well as how it presents an incredible opportunity. Possibly in equal parts of fear and excitement, they must recognize and support a serious evaluation of digital disruption as both threat and opportunity to their business.
Digital innovation can come from any part of the organization. Every business has its intrapreneurs and digital enthusiasts who may have ideas big and small that can contribute to business transformation. Only when innovation has the support of senior leadership, can they break out of silos and scale across the business.
McKinsey Insights published a great interview with Adobe senior executives on their journey to a new digital business model. Dan Cohen, the VP of Business Operations and Strategy at Adobe said “In every part of the business, we had to dig in and ask, “how do we need to do this differently?”
Unless there is unambiguous support from the top, it will be difficult to ask such a question in all parts of your business and even harder to act on the answers.
Equip to Compete
With the fast evolving digital landscape, its hard to tell who’s gonna be your future competition. GrabTaxi now has GrabExpress in selected countries – an on-demand pickup and delivery service. Prior to GrabExpress, GrabTaxi would be seen as a taxi hailing mobile app and likely not on the minds of people running postal services.
Google through Nest now sells programmable thermostats and home alarms. Will they extend into connected household gadgets in the future?
If you do not want to be caught on the backfoot, you need to start thinking about what digital disruption is going to look like for your business.
Under Armour is a great example of a company that is actively asking such questions and managing their business in anticipation of where they believe their business is evolving. Most of us will know Under Armour as a sports apparel brand. Through the various fitness apps they own, they now control a digital health and fitness community that is estimated to have more than 120m registered users, expanding from selling sports gear to health tech.
Every company, whatever sector you are in, should take a look at the many examples of digital disruption and how digital first companies build their core competencies and think about their business. Just like those digital first companies, you should start asking yourself “what business am I really in?” and “what business should I be in?”
If you are interested to catch the replay of the IESE webinar – “Fostering Digital Mindset to Transform Your Business” where Professor Kaganar talks about how companies can approach digital transformation, you can access it here. Password: digital
Digital Optimist 