“We are a technology company that also does “xyz”” ~ It is the statement and mantra that you hear many CEOs say these days along with a focused strategy and approach to grow their business via digital means.
Digital has truly disrupted every business and is having small, medium, and large companies literally scramble to transform their businesses for the digital era.
Digital Transformation is easier said than done. It challenges the foundational ethos of every company and calls for a “rethink”. So how do business go about it? Below are the 5 key traits of every organization that is digitally transforming itself.
Agile Businesses drive speed and nimbleness in organizational model, operating model, and the outcomes. Agile businesses:
- Inspire a deep-rooted, purpose-driven, and passionate-execution structure
- Build partnerships, promote open innovation, and unite people both into small teams around outcomes
- Leadership fundamentally breaks down barriers, and lets the teams thrive
- All good ideas are evaluated, seeded by a deliberate board (capital allocation)
- Follow milestone driven innovation accounting principles
At the core of agile businesses are the people and the companies focus on leading with the insights they have about their people.
BUSINESS MODEL INNOVATION
Business Model Innovation is about how companies rethink the way they make money. For example, Uber at a market capitalization of $40 billion doesn’t own a car but provides transportation by connecting rides and anyone who signs up to be the ride with their personal cars. Its meteoric rise is a shining example of Social Economy that is built on solving supply-demand issues by connecting resources/people.Mature digitally savvy organizations adapt to the Business Model disruptions by:
- Leveraging intelligence, social, mobile, analytics, Internet of Things (IoT), and Cloud to drive new products and services
- Drive vertical integration by tightly managing and monetizing different parts of the wing-to-wing supply chain — procuring raw materials to manufacturing to retailing. In this process, enable newer businesses.
- Horizontal integration is the process of picking an area of supply chain and integrating across. For example, rethinking the entire manufacturing process from design to production.
- Get into adjacencies as a result of vertical, horizontal, and ISMAIC technologies.
Consumer is the new CEO goes the saying. The disruptions enabled by the new economy have provided unparalleled power in the hands of the consumer. Digitally savvy companies:
- Use data as a differentiator to lead customer-conversations
- Begin and end every conversation with the customer
- Continually learn and individualize for the customer
- Provide knowledge as value-add
- Build loyalty every single way especially by focusing on the adjacencies
DATA AS A DIFFERENTIATOR
Data and Insights is about how the business uses it as a differentiator. Be it knowing all about your employees to enable an agile business, gathering volumes of big data by applying business-model innovation, or tailoring services to demonstrate consumer-centricity. Digitally savvy organizations,
- Continually learn and individualize for the customers
- Be proactive to drive efficiency
- Make intelligent decisions
Ecosystem is about the entire community of products/people/services and their interplays. It starts with creation of software platforms or rethinking your business model as a platform. For example, Apple has created hardware, software, platform, and has slowly converted that platform into an ecosystem comprising of hardware, software, platform, services, and much more. For example, credit card companies could expand into bill-payments. Digitally savvy organizations, with ecosystems
- Rethink the business as a platform that helps both the vertical and horizontal integrations to thrive
- Create an ecosystem that enables others to build or innovate
- Own (or) tightly control the key elements of products, people, services, and their interplays
Agile businesses, Business Model Innovations, Consumer-Centricity, Data and Insights, and Ecosystem Plays are the key cornerstone pillars of being a digitally savvy company (or) in a very juvenile way the ABCDE of a digitally transformed/savvy company.
How is your organization undertaking this transformation? What do you believe are the key traits of a digitally transforming organization?