Introduction

Many thought leaders point out major theories and ideas as to how digital has impacted business, the economy, and society. That’s helpful, but this book will do that and more. It will show you “how to” transform or build a core business model that is ready for the digital age. This is not a book about chasing the latest technology, but instead it is a book on strategy, business models, and the art and science of creating your own digital transformation. Our goal is to help you change the game before it changes you, while providing you with the initial thought processes, guidance, and “how-to” so you can.

Digital is about immediacy—about getting the word out, and making changes. Oddly enough, the digital transformation process itself can take years—especially if you have a large company. Why? Because it’s not just your business model that may need to change. It’s also your people, your technology platforms, and your operational processes that also have to change. Conceiving a new business model and implementing a technology capable of disrupting your industry is only part of the challenge. It’s harder to create the teams, the processes and the change that the new technology and model requires. But we will show you how to do that too.

Today, companies are asking most often how to drive the kind of change that will get them noticed, that will put them ahead in their industry and that will make them the next great case study. Are you debating, embarking on a major transformation? Are you worried about whether the idea, or the risk of change will fly in your current company culture? Today, conservative and cautious can kill your long-term opportunities. If you do nothing else around digital transformation this year, read this book. At minimum, it should help you recognize digital disruptions that will be or are a threat to your business, similar to relatively recent examples outlined in Figure 0.1.

Figure 0.1 Digital disruptions

Your customers are in the driver’s seat because they know what they want or they’ve come to know what they want through researching on the Internet, and then go after those companies that deliver the user experiences they are seeking. That’s why upstarts have been able to raise billions on inflated valuations creating some of the most highly-valued private tech companies of all time.

What drove their success? Customers. Because the traditional model was ineffective, costly, and a bad customer experience, they flocked to these new startups when they came on the scene—not because of their app, but because of their unique business model, made possible by digital.

You don’t have to be an analyst, a statistician, an IT geek, a technology guru, or a social media master to take on a transformation initiative. You, however, have to understand the three key drivers of transformation:

1. Changing technologies

2. Competition

3. Changing customer demand for more technology that actually makes their lives better

But most companies aren’t moving as quickly as they probably should to leverage the power of digital, which is becoming more and more a necessity to stay competitive. This was evident in November 2011 when a three-year study conducted by the MIT Center for Digital Business and Capgemini Consulting concluded that globally, only one-third of companies had an effective digital transformation program in place.¹ Then in 2014 the Altimeter Group conducted a survey where participants were given a definition of digital transformation to read beforehand. Afterward, they were asked whether their company was undergoing a formal digital transformation that year. While 88 percent of executives and digital strategists stated that they were, only 25 percent of those claiming a transformation had actually mapped out their digital-customer journey—even after reading the definition.

¹ https://www.capgemini.com/resource-file-access/resource/pdf/The_Digital_Advantage__How_Digital_Leaders_Outperform_their_Peers_in_Every_Industry.pdf

Digital transformation is not just about data, numbers, studies, surveys, and technology. To better understand it, we need to look closely at the stories behind digital transformations and the companies that get affected, both positively and negatively. Companies overcome competition by creating better customer experiences. Other companies get challenged because they are not proactive. We will provide you with a primer to create, develop, and manage your own digital transformation effectively so you end up on the right side of all that digital has to offer.

This book will explore and illustrate how companies can change, engage, interact with, and disrupt the current digital ecosystem. For those of you who may have forgotten high-school biology, an ecosystem includes all the living things in a given area that interact with each other and their environment.

Many companies may include “new website design,” or “incorporating social media” into their websites and consider that “digital transformation.” Statements like, “We need to redesign our website, we need to build a mobile app” are not strategies, they are implementations of what should be delivering on a strong digital business strategy. These tactics can enhance or be the outcome of the transformation, but they are not the transformation.

What this book, and our entire philosophical approach, is about is that digital transformation is the tip of the spear of your future business model. It’s fundamental to your business and your business strategy. It has a seat at the boardroom table. It requires it’s own profit and loss (P&L). Digital transformation is the heartbeat, the mantra, the thread that runs through this book.

In spite of thousands of examples where businesses of all sizes have successfully transformed, almost every company facing transformation will experience some internal resistance.

You don’t have to be a marketing, branding, or business genius to realize what happens when your company doesn’t keep up with trends in customer desires, needs or expectations. Need an example in one word? Kodak. Kodak management’s inability to see digital photography as the future continued for decades. Even when the general public saw what was happening, Kodak’s management didn’t. As late as 2007, a few years before declaring bankruptcy, a Kodak marketing video told consumers that “Kodak is back” and that they weren’t going to play anymore with digital. Even when studies showed digital would overtake Kodak’s market, researchers there concluded it would “take at least 10 years” to do so.

Not everyone learned the lessons Kodak taught so many. Many companies still resist digital transformation the way Kodak resisted digital cameras. Even long-standing companies can transform themselves if they are willing to push past the internal resistance.

If you and your organization are ready to transform, what are the steps you can start to take? First, address the resistance. Stop talking about digital as if it’s something separate, or a channel of your business instead of at its core. Begin ingraining digital thinking into everything you do. Make it part of your culture, business strategy, and model. Make it a primary touchpoint of your business. Make digital transformation core to your business strategy.

For older and more traditional companies, digital is a separate shared-service unit. This is usually the right structure for companies with less digital maturity. Ultimately, digital will need to be a part of every part of the business, similar to how Amazon or Google may think about digital within their organization—where there is no separate digital team. Businesses won’t have “digital teams” because everything will have digital embedded in it.

Second, identify your company’s expertise, talent, and uniqueness. Digital transformation is not about simply implementing “best practices” or attempting to copy the digital pure-play companies that are already out there. It’s about understanding your digital DNA.

Third, create a digital transformation vision. Bill Gates had a vision when he started Microsoft. He envisioned that there would be a computer on every desk in every home long before many people knew what a computer was. Have a vision for the future of business whereby leverage is digital. Digital is the core of every business that operates more effectively with better integrity, and more transparency. They better serve their community and society, and the environment.

Fourth, have fun. Digital transformation shouldn’t be this big, heavy, change initiative. Make it fun and exciting for your employees to participate. It should be a challenging, fun, game changing initiative that gives your team purpose.

Fifth, create your own unique experience to get the edge in your market. Nike did it. Disney did it. Casper Sleep and Warby Parker did it.

This book will help show businesses of all sizes how to transform, how to become the digital leaders in their industry. Our hope is that you will stop talking about digital as if it’s something separate from your business. Instead it should be seen as the primary touchpoint that both customers and employees connect with daily, because they do already for many reasons. Digital should be a seamless component of your company.