Funny thing about transformations: they happen subtly, they bring about fundamental changes, and we stand equal chance of being either beneficiary or victim depending mainly on just how acute our sense of awareness is or isn't.
That's true of personal, cultural, and political transformations and it's also true of digital transformations.
Companies are investing enormous amounts of human and fiscal capital into digital transformation technologies and methodologies—but to win, strategy trumps technology every time.
Digital transformation, after all, is “simply” the ability to leverage what's there to better ends. “Simply” is in quotes because there's nothing particularly simple about it. Sure, the individual steps themselves are rather straightforward but getting the transformation to work to our benefit is a multidimensional process.
First, to get the most out of their digital transformation strategies, companies need to get – and keep their fingers on – the pulse of changing markets and adjust their approaches accordingly. What technologies are their customers using? What are established and new competitors doing to capture marketshare or mindshare? In what areas do we excel and in what areas do we simply get by? And whatever happened to Woolworth's anyway? (Look it up if you don't know. Hint below.)
The digital transformation has been with us long enough that we can look back and identify the strategic elements that are the cornerstones of successful strategies for managing its intramural and extramural elements in our favor.
The first, and the most counterintuitive, is to look past your competitors. The impetus behind many digital transformation initiatives is fear that a competitor will beat you to the punch, or that a disruptor will leave you behind. There's good reason for that thinking: The average lifespan of S&P 500 companies has declined from 61 years in 1958 to about 20 years now, indicating that disruption rather than longevity is the new norm. (Hello Woolworth's.)
But the truth in today's crazy market is that disruption can come—and does come—from must about everywhere, so companies can’t afford to just analyze what their closest competitors are up to. They need to look broadly and deeply to commercial, technological and cultural changes that will inevitably become players in the disruptive drama unfolding in every industry and across every region of the world.
So what's the best way to raise that awareness of the changes swirling around us? First and foremost, talk to your customers. Without understanding your target audience, your digital strategy will only be an educated guess and there's little tolerance for mere guesswork. Beyond the typical “why do you stay with us?” inquiries, ask about the technologies they're using—and the ones they're not using. How can your supply chain fundamentals mesh better with theirs? What are their expectations when it comes to responsiveness? Are they using AI? If so, how? Is their personal “I can have it in two hours” consumer mentality seeping into their commercial behavior? In addition to generating revenue from the sale of their products and services, are your customers beginning to generate new revenue from the data about those products? The answers to those questions will be priceless in helping to shape your perspective.
To make sure that antennae remain up and willingness to change is embraced, it's impossible to overstate the importance of using executive influence to the utmost. Consider the example of former Ford CEO Alan Mulally, who managed to lead the company through a digital transformation that brought the company back from the brink.
He created a business plan and shared it with his executive team in a weekly meeting. That meeting was mirrored at every level of the organization, all the way down to front-line employees. Managers then closed the feedback loop by sharing employee insight with the executive team.
Ultimately, Mulally set the high-level agenda while also considering feedback from the entire organization. Your digital strategy could fail to get off the ground without executive support, but it may also have large organizational gaps without input from the right stakeholders. Finding the right balance is the key.
Those are the basics: simple individual steps in a continual cycle of listening, learning and acting on what we see and hear and sense. There can never be too many eyes and ears looking both inward and outward—and then be prepared to execute as rapidly as possible.
We're here to help by sharing with you what we're seeing, hearing and, most importantly, doing to help our customers manage their way through the transformation. Let's talk.