It’s all the rage at the moment, it’s hard to swallow, and the jury’s still out on how good it actually is for you. So, yes, you should be skeptical about the evangelism around digital transformation.
But unlike the latest food fad, I think digital transformation could be the only thing stopping an otherwise inevitable march into irrelevance for your business – or worse.
This is something I think about a lot, and often discuss with business leaders, so I’m going to take some time to set out my thoughts on the subject. Possibly over more than one post, if we get going. It’s a topic I’m keen to hear your thoughts on too. But first, let’s pin down what we actually mean by digital transformation in the first place.
What is digital transformation?
The basic issue is that relentless change has become the new normal. Something like 151 of the Fortune 500 from 2010 no longer exist, thanks to their inability to adopt and transform (according to Accenture). Surviving and thriving over any time frame is getting harder as the pace of change accelerates.
Digital transformation is what we’re supposed to do about this problem. It’s also a term that varies in meaning depending on who you talk to about it – even within the senior leadership teams of ‘transforming’ companies (which is a whole other problem in itself). I define it as changing an organisation to ensure:
- Ongoing customer relevance and engagement
- Ongoing operational efficiency,
- Continually evolving competitive advantage, all so companies can
- Ensure ongoing return (however you would like to define it) for stakeholders and shareholders
Sounds exhausting right?
Making money in the most conventional business can be tough enough, without even considering the endless uprooting of your business processes and the way you market yourself. To overwork the kale analogy we started with, it feels like the prospect of being on some permanent paleo diet, with no beer or fries forever.
The good news is, in my opinion, that’s not what’s needed. You DO need to digitally transform if you want your business to be around in ten years’ time, but like changing your diet, it’s important not to think of it as a destination, but rather a change in business lifestyle.
I also tell our clients that’s it crucial you protect the legacy parts of your business. Yes, use contemporary digital tools to extract more value from your current business model, but make sure to leave the fundamentals intact so you can continue funding the future-proofing of your business.
Yes, use contemporary digital tools to extract more value from your current business model, but make sure to leave the fundamentals intact so you can continue funding the future-proofing of your business.
Put like that, I don’t think that’s such a challenging proposition, even for businesses in as small an environment as New Zealand.
Of course there’s a lot more to be said on the topic, but I’ll leave that for another day. I’ll leave you with a few thought starters that you may find relevant for your own transformation journey.
Business transformation basics – things to think about
- Companies that thrive through the transformation journey are often those that accept change and disruption is a given. Remember that change won’t stop, even when the old becomes new again
- Beware of an approach built just on small incremental improvement. Incremental transformation and marketing – even if successful – does not guarantee survival.
- Strong vision and agenda alignment between business, technology, sales and marketing is important. Without it, costs can quickly spiral higher than immediate benefit making it difficult to demonstrate impact to stakeholders.
- Keep the planning simple. Fight complexity. Use data to test hypotheses and listen to the market and customers.
What do you think? How do you define digital transformation in your business?