It is a fascinating time to be working in the era of digital Darwinism, when technology and society are evolving faster than businesses can naturally adapt. With all of the technological changes over the last decade, software and data tools have evolved significantly. Many companies realize that the game has shifted, and they need a robust digital strategy to compete in the current business climate. However, trying to cope without a thorough understanding of the digital space and how it affects business can threaten even the most successful companies. All of the technological advancements, especially in the last 20 years, are changing the competitive dynamics across all industries. With business leaders recognizing the seismic shift in technology and sensing a new set of business rules, they fear falling behind their traditional competitors as well as new players entering their space. Companies are now scrambling to adapt their offerings, sometimes without clarity of what they need to do to evolve their current business model. These businesses are operating like a bike rider looking directly in front of their bike to avoid potholes while heading off a cliff. Although, these businesses need to avoid the potholes, they also need a clear, forward-looking vision to avoid the cliff ahead. This vision should be rooted in a deep understanding of the immense possibilities and designed for speed, so that the competition does not accelerate ahead.
The word “digital” has become an overused buzzword that is often thrown around with little to no meaning. Digital in a business context is the advancing of multiple technologies that work together empowering companies to rethink their products, manufacturing, and services in ways that were not previously possible. Over the last 20 years, there have been considerable advancements in many technologies, including software development tools, data collection and analysis, cloud computing, processing power, virtualization, telemetry, and artificial intelligence. Nothing listed is new; it is just these synergistic technologies have become more powerful and now add considerable value to business models. At the risk of sounding cliché, the sum is indeed far more than the parts. Where is this all heading? I doubt anyone knows for sure, but we can look to the past for clues.
The current buzz around digital reminds me of the scramble to become "web-enabled" in the mid to late 90s with the emergence of the World Wide Web. Many companies wanted to be "web-enabled" but had no idea what that meant to their business or products. They just knew they needed a "web presence." Companies that started as a web-based business often excelled when they had a combination of viable products or services, a suitable digital business model, and proper technologies. Amazon and Google in their early years had business models and embedded technologies that allowed them to be revolutionary, evolutionary, and scalable. Established companies struggled to adapt, and the more established, the harder it was to change. The rise of the internet was difficult for companies unwilling or unable to change like Tower Records, Blockbuster Video, Eastman Kodak, and The New York Times. The changes to businesses came hard, fast, and in many waves. Amazon started as an online bookstore, and now Amazon sells virtually everything through its AI-powered direct targeted marketing. Tools also evolved and were replaced by better technologies in rapid fashion, including relational databases, Object Oriented databases, HTML, Java, HTML5, just to name a few. Things were rapidly evolving, and if you were in a product development role, it felt like you were getting thrashed in the jet-wash of development tools. Much like today, it was challenging to choose technologies and tools that would not handcuff you later.
The many waves of digital tool advancement since the early days of the World Wide Web have driven technologies to change the way business is conducted. Digital technologies are far more cost effective and less risky than just ten years ago. Much like the business focus on web technologies, businesses are once again shifting focus to capitalize on the new digital revolution, or they are just trying to survive. This revived focus is a real renaissance. We all hear and read about companies investing in "digital" with varying results. Much like the early days of the World Wide Web, businesses are realizing the importance of this evolution, but many struggle to navigate the digital landscape. Established companies need to rethink their entire business model, along with their products and services. Startups need to develop a deep understanding of how their digital products address the current and future needs of their customers. Both startups and established companies can prepare for the waves of inevitable change by future-proofing their tools and methodologies. The coming decade will be full of new offerings that could easily get trapped in the jet-wash of evolving operating systems, development tools, and customers' changing needs.
This is an exciting time that will change the world of business. To prepare, businesses can position themselves to be leaders in this turbulent, rapidly evolving environment, like Amazon has successfully done. Many companies are not yet prepared for these changes because of the new approaches and capabilities required. Companies often struggle to form the right multidimensional team to develop and implement a successful digital strategy. Assembling a support network with well-rounded experience in business development and technology is a great foundation for digital transformation.
Setting up the multidimensional digital transformation team properly is crucial. It needs to be at the heart of the CEO’s agenda and not simply an I.T. project. The team should be deep and wide in terms of capabilities and drawn from across the company. Find external partners who are willing to dedicate themselves to the success of your entire transformational journey as well. Steve Jobs said, “Coming in and making recommendations and not owning the results, not owning the implementation I think is a fraction of the value and a fraction of the opportunity to learn and get better…And without the experience of actually doing it, you never get three dimensional.” Too often we see digital teams being “one-dimensional” because employees who are specialized in their area of expertise come into the project for a short-period of time while being forced to juggle their day jobs with the added responsibilities. Oftentimes, consultants are hired to fill the gaps but do not typically stick around long enough to see the transformation through critical milestones. With this tendency to have short-term participants, the digital transformation can become diluted compared to its intended impact. The organizations that will win in the digital transformation era will most likely be the organizations led by a multidimensional team that is committed to the entire transformation from beginning to end. These teams will inspire change in order to help their company adapt and succeed in the new digital era.
Developing an optimal digital transformation is critical to a company’s evolution. Approaching the digital transformation takes a much different approach than previous business transformations and requires a multidisciplinary team consisting of a variety of employees and external partners. Following Steve Job’s advice, look for external partners that are committed to the entire journey, not just a one- dimensional approach. Buckle up, it’s going to be a wild ride!